Discrepancies point to increasing TBML activity in China-Hong Kong trades

Over- and under-invoicing is most likely widening an already yawning gap between trade data released by Hong Kong and China.

This kind of trade-based money laundering has apparently been precipitated by efforts by Chinese individuals and entities to transfer of funds out of China.

Stark contrast

China’s customs data showed imports from Hong Kong grew more than 242 per cent year-on-year in May.

But data from Hong Kong’s statistics department showed that exports to China grew just 0.9 per cent during the period.

Causes

The widening discrepancy is widely believed to be a product of extensive under-invoicing of exports from China and over-invoicing of imports into the mainland.

China has taken steps to ease downward pressure on its currency, but it appears there is a groundswell of opinion on the mainland that favours investing money offshore.



Categories: Trade Based Financial crimes News