Anti Money Laundering (AML) in Hong Kong Special Administrative Region

Money laundering in Hong Kong is a considerable problem due to the vulnerability created by low taxes, a simplified tax system and a sophisticated banking system. The primary sources of laundered funds are narcotics trafficking (particularly heroin, methamphetamine and ecstasy), tax evasion, fraud, illegal gambling, and commercial crimes. Laundering channels include Hong Kong’s banking system, and its legitimate and underground remittance and money transfer networks.

The Monetary Authority issued the Anti Money Laundering Guidelines, which reflect the revised Financial Action Task Force’s Forty Recommendations on Money Laundering. The guidelines are used by financial institutions to monitor compliance through on-site inspections and other means. Hong Kong law enforcement agencies also provide training and feedback on suspicious transaction reporting.

Financial institutions are required to know and record the identities of their customers and maintain those records for five to seven years.

The Economy of Hong Kong Special Administrative Region

Hong Kong has a free market economy highly dependent on international trade and finance, which has left it heavily exposed to the global economic slowdown that began in 2008. The region has become increasingly integrated with mainland China over the past few years through trade, tourism and financial links.

During the past decade, as Hong Kong's manufacturing industry moved to the mainland, its service industry has grown rapidly and now accounts for 92% of the territory's GDP. Hong Kong's natural resources are limited, and food and raw materials must be imported. Hong Kong continues to link its currency closely to the US dollar, maintaining an arrangement established in 1983.

Hong Kong is the world's fifth largest banking center. The country has constituted itself as a major international trade and financial center with proper economic fundamentals.

Banking in Hong Kong Special Administrative Region

The Hong Kong Monetary Authority is the Central Bank of Hong Kong. Its main functions and responsibilities include maintaining the monetary and banking stability which are governed by the Exchange Fund Ordinance and the Banking Ordinance. The Central Bank reports to the Financial Secretary.

Hong Kong Special Administrative Region's Currency

The currency in Hong Kong is the dollar (often abbreviated HKD or HK$), which is generally accepted in the southern region of the Chinese territory. Banknotes appear in denominations of $20, $50, $100, $500 and $1,000. Coins appear in denominations of 10, 20 and 50 cents, and $1, $2, $5 and $10.

Other Key Statistics of Hong Kong Special Administrative Region

Time Zone: UTC+8 (13 hours ahead of Washington, DC during Standard Time).

Location: Eastern Asia, bordering the South China Sea and China.

Population: 7,018,636 (July 2008 est.).

Labor Force: Approximately 6.5% work in manufacturing, 2.1% in construction, 43.3% in wholesale and retail trade, restaurants and hotels, 20.7% in financing, insurance, and real estate, 7.8% in transport and communications, and 19.5% in community and social services.* The unemployment rate is 4%. NOTE: The data above excludes the public sector.

Languages Spoken: Chinese – Cantonese dialect (official), other Chinese dialects, English (official).

Trade Organizations: Hong Kong is a member of the World Trade Organization (WTO).