Interdicting tainted wealth ‐ the perspective from Hong Kong

Date01 July 2004
Published date01 July 2004
AuthorD. G. Saw
Subject MatterAccounting & finance
Interdicting Tainted Wealth Ð The Perspective from
Hong Kong
D. G. Saw
The need to maintain public con®dence in the
integrity of ®nancial systems and to ®ght crime by
removing the incentives to commit crimes are para-
mount considerations for the administration of
Hong Kong. As an active member of the Financial
Action Task Force (FATF), and as its President from
2001 to 2002, Hong Kong has coordinated global
eorts to combat not only traditional forms of
money laundering but also terrorist ®nancing. The
movement of funds from place to place must be
clean, open and properly regulated, and in this,
Hong Kong has acted decisively. It is on the alert in
all areas, and has in place machinery to combat those
who seek to launder illicit money through the ®nan-
cial system. Hong Kong recognises that information
kept by ®nancial institutions in relation to the holding
and transfer of money is critical to the investigation
of money laundering. That is why it has placed a
premium upon vigilance and cooperation between
the public and private sectors. As a prosecutor the
author believes that in the combat of organised
crime in whatever guise it is paramount that Hong
Kong is in a position to identify, restrain and con®scate
the proceeds of crime.
Cooperation at the international level between
prosecutors, investigators and ®nancial institutions is
integral to this task. Hong Kong is committed to
working with others to identify and restrain any
form of tainted wealth and to prosecute those who
would bene®t from it. It is determined not only to
protect its own ®nancial system, but also to assist
others to safeguard theirs. That is why in Hong
Kong contributions at all levels are being made in
the combat against international criminal activity.
Recently, at the International Association of Pro-
secutors Conference in London, Rosalind Wright,
the Director of the Serious Fraud Oce in London,
de®ned tracking in money as follows:
`Money laundering is the process whereby crim-
inals conceal move and legitimise the money they
make from crime. The ultimate aim of major crim-
inals is to make money. To use that money, its ille-
gitimate provenance has to be concealed and the
money washed so that it can be fed into the wider
®nancial system, spent on valuable assets or a
lavish lifestyle, or, as usually happens, used to
fund further criminal activities, paying o associ-
ates, and increasing the power and in¯uence of the
crooks themselves and their gangs.'
Those observations apply with equal force to con®sca-
tion of the assets acquired with this freshly laundered
largesse. Inherent in Wright's observations is the pre-
mise that concerted eorts are required to strike at
what motivates the crooks. What is required are eec-
tive means by which the acquisition of assets or the
funding of a lifestyle from the proceeds of crime
becomes less attractive, even counter-productive. If
the valuable assets and the lavish lifestyle are targeted
by law enforcement agencies and become the basis
of the downfall of the criminal, then the incentive to
engage in criminal activities diminishes. The unex-
plained lifestyle and assets must become the Achilles'
heel of the criminal classes.
Over the years, Hong Kong has built up an eective
and comprehensive regime to counter money laun-
dering and the con®scation of tainted wealth through
legislation, law enforcement, close cooperation with
the ®nancial sector, publicity, education and inter-
national cooperation. Hong Kong has continuously
strengthened and updated its legislation and provided
guidance and assistance to the ®nancial sector.
Hong Kong enacted its ®rst drugs-related money
laundering legislation in December 1989, the Drug
Tracking (Recovery of Proceeds) Ordinance,
Chapter 405 (DTROP). It contains powers for the
restraint and con®scation of proceeds of drug traf-
®cking, and creates an oence of money laundering
Page 275
Journal of Money Laundering Control Ð Vol. 7 No. 3
Journalof Money Laundering Control
Vol.7, No. 3, 2004, pp. 275± 280
#HenryStewart Publications

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