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Hong Kong introduces Boarder Currency Controls (Finally)

In Anti-Money Laundering, News by Parvesh ShamdasaniLeave a Comment

Its about time. One of the most basic ways of laundering money is to simply carry it from one jurisdiction to another so boarder currency controls are the norm for all FATF members. Hong Kong finally adhered to the FATF commitment we signed up for back in 1991 but did not really care about until 2008 (when they released a damning report on us). Its been a long journey so let me give you a quick recap.

Even though Hong Kong has been a FATF member since 1991, we were not concerned about implementing many anti-money laundering policies until their Mutual Evaluation Report on our standards in 2008, which was anything but positive. FATF stopped by in 2012 and released its 4th Follow Up Report, and was supposed to stop by 4 years later in 2016 to investigate our progress, but this is when things got weird. From 2016 it got delayed to 2017, and then to 2018.

I don’t mean to sound like a conspiracy theorist but when the currency control measures got shot down in Legco (the Legislative Council) back in 2015, I thought with FATF stopping by in 2016 things would be awkward. Then we heard rumors their follow-up was delayed to 2017, after which white noise followed. In 2017 came the first and second reading of the “Cross-bounder Movement of Currency and Bearer Negotiable Instruments Bill” in Legco. This time lawmakers got together to discuss the bill and it was not shot down. In June 2017 at the 3rd reading of the legislative council, the bill was overwhelming passed. Soon rumours surfaced that FATF was going to stop by next year in 2018.

For those interested in the bill the PDF version is available here, and for those who realised the bill was missing “Ocean Terminal” as an access point, you can get the amendment issued here. What this means is anyone carrying currency and bearer negotiable instruments totaling more than HK$120,000 will have to declare to customs from July 16th onwards.

  • This includes a note, or coin, that is legal tender in Hong Kong or a place outside Hong Kong; or
  • A negotiable instrument that is—
    • in bearer form;
    • endorsed without any restriction;
    • made out to a fictitious payee;
    • in a form under which the title of it passes on
      delivery; or
    • signed but does not state a payee’s name;

Examples of bearer negotiable instruments are bearer cheques (cheques payable to the person who is in possession of the cheque), promissory note, bearer bond, traveller’s cheque, money order and postal order.

Just keep in mind if a “young person” is in possession of CBNIs (cash and bearer negotiable instruments) over the threshold, it is the accompanying adult’s responsibility to make the declaration on his/her behalf. The disclosures are to be made on arrival and on exit from Hong Kong via the red customs channel. All shipments containing CBNIs in and out of Hong Kong above the threshold will also have to be declared beforehand. False declarations and failure to comply can lead to HK$500,000 fine and 2 years imprisonment. If any questions feel free to get in touch.

Business and compliance enthusiast, problem solver, road warrior, police ID check magnet, and half geek whose exploits have taken him around the United States, United Kingdom, Caribbean, India, deep into Southeast Asia and West Africa. Entered the anti-money laundering and high risk field to help develop understanding, contribute research, improve standards, prevent profiteering at the expensive of SMEs, and to protect interests of the average person.
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