Financial Crime World

Title: Hong Kong’s Financial Sector Braces for Zero Tolerance on Bribery and Corruption: ICAC’s Guide for Authorised Institutions

Introduction

In the intricate world of finance, maintaining a zero-tolerance policy towards bribery and corruption is a non-negotiable requirement for businesses operating in Hong Kong. The Independent Commission Against Corruption (ICAC) has recently collaborated with the Hong Kong Monetary Authority (HKMA) and the banking industry to publish a guide aimed at helping Authorised Institutions (AIs) reinforce their anti-corruption capabilities.

Hong Kong’s Anti-Corruption Efforts

According to the Transparency International Corruption Perceptions Index 2022, Hong Kong ranks 12th as the least corrupt nation, with a score of 76 out of 100. Hong Kong’s persistent dedication towards combating corruption and bribery, reinforced by ICAC’s relentless enforcement, has led to this remarkable ranking.

Understanding the Prevention of Bribery Ordinance (POBO) and Its Definitions

  • The Prevention of Bribery Ordinance (Cap. 201): serves as the primary anti-bribery legislation in Hong Kong
  • ICAC’s enforcement: of the POBO, which prohibits bribery in both public and private sectors and is not limited to monetary forms

Gifts, Entertainment, and Hospitality: Redefining the Lines

  • Non-monetary advantages: can constitute bribes under specific circumstances, offering, soliciting, or accepting such an advantage with an illegitimate purpose is prohibited
  • Gifts: defined separately and do not violate the POBO if provided on specific occasions and conditions, firms should establish clear policies for acceptance
  • Hospitality: considered an advantage and falls under the purview of the guide’s recommendations

Key Points to Remember

  • Bribes: can be any “advantage”, and any offering, soliciting, or acceptance of such an advantage may be considered a bribe, regardless of value or threshold
  • Lawful authority or a reasonable excuse: required for gifts, entertainment, and hospitality that may not be considered bribes

Adopting Clear Corporate Policies

  • Robust policies: necessary to prevent conflicts of interest and bribery, firms should closely monitor transactions and activities
  • Guiding principles: firms should clearly define acceptable and unacceptable gifts, entertainment, and hospitality, establish centralised registers, and set up procedures for declaring items

Technological Advancements in the Fight Against Corruption

  • RegTech solutions: like MCO’s Gifts, Entertainment, and Hospitality (GEH) module help firms stay compliant and reduce reputational and financial risks

Employing a “Rules-Based Approach”

  • Transparency and communication: key to identifying potential bribery risks, firms should promote a culture of transparency and build trust with clients, investors, and communities

Consequences of Failure

  • High-profile cases: serve as cautionary tales of the financial, reputational, and personal risks faced by organizations failing to uphold strong anti-corruption policies

Conclusion

By adhering to ICAC’s Anti-Corruption Guide for the Banking Industry, financial institutions can stay ahead of potential risks and maintain their reputation, protect their clients, and uphold Hong Kong’s standing as a global leader in probity and transparency in the international financial scene.