Hong Kong Battles Money Laundering

Due to ever changing technology and its effect on money laundering, a Hong Kong based non-government organization (NGO) recently announced plans to form an alliance to regulate the financial technology across Asia in an effort to combat money laundering.  Representatives from Asian countries such as China, the Philippines, Thailand and Cambodia met to discuss the difficulties in regulating new technologies and following illicit money transactions.  Efforts have even been made in Macau, a known gambling hub in Asia, that include the introduction of facial recognition technology at ATMs in order to reduce the outflow of illicit cash from mainland China .

These efforts have been momentous in combating the illegal withdrawals so much so that the number of withdrawals has dropped by more than half compared to what they were previously.  Prior to the use of facial recognition technology, monthly withdrawals from ATMs were at a high of HK$10 billion.  “ATM cash withdrawals has dropped as a result of the KYC measures because it has effectively stopped this cross border illegal cash withdrawal activity,” said Anselmo Teng, former head of the Macau Monetary Authority and co-chair of the Alliance for Financial Stability with Information Technology.

On the other hand, because of the anti-money laundering (AML) efforts in Macau, withdrawals in Hong Kong have adversely skyrocketed.  Media reports have even reported instances of mainland Chinese individuals withdrawing hundreds of thousands of dollars from ATMs using up to 50 cards at a time.  The Hong Kong Monetary Authority (HKMA) puts the total amount of monthly cash withdrawals using mainland bank cards between HK$2 billion and HK$6 billion in 2017 alone.

According to Claire Lo, the co-chair of the Alliance and former Deputy Secretary of the Hong Kong government’s Financial Services and Treasury Bureau, “Things like the experience from Macau will be very useful and beneficial for other jurisdictions around Asia which does not have this technology or knowhow to do so.”  The effectiveness seen in Macau of using facial recognition technology in ATMs could impact the AML efforts of, not only China, but other countries suffering from money laundering as well..


For the full article, click here.