Financial Crimes on the Rise: How the Joint Financial Intelligence Unit in Hong Kong is Combating Overseas Fraud

The Joint Financial Intelligence Unit (JFIU) in Hong Kong has become a critical player in the fight against financial crimes. In an era where criminals are increasingly relying on the financial system, the JFIU is using advanced intelligence and international collaboration to tackle emerging threats.

Combating Overseas Fraud: An Example

One area of concern is overseas fraud, driven by profits. For instance, a student account holder made over 100 cash and transfer deposits, with ATM transfers and Stranded Traveler’s Checks (STR) made thereafter. Upon conviction, intelligence was shared with overseas police to assist in wider investigations.

Legal Framework and Protection

The JFIU operates under a legal obligation to report any transactions or activities that may be linked to the proceeds of an indictable offense. This includes knowledge or suspicion of money laundering or terrorist financing activities. The reporting offense is outlined in Section 25A(1) of the Organized and Serious Crimes Ordinance (OSCO).

JFIU officers are not only guarded by legal protection but also offered disclosure protection and offenses. The protection against suit and offenses to disclose the disclosure without authorization can ensure sensitive information remains confidential and doesn’t hinder an ongoing investigation.

Risk-Based Approach: SAFE

The JFIU employs a risk-based approach, called SAFE, to screen for suspicious activity indicators and evaluate the transactions. This approach requires financial institutions to establish and implement a risk management system to mitigate potential money laundering risks.

Prevalent Forms of Overseas Fraud

Two common forms of overseas fraud in Hong Kong are telephone deception and loan sharking.

Telephone Deception

In telephone deception cases, fraudsters often impersonate law enforcement officers to trick account holders into providing sensitive financial information.

Loan Sharking

In loan sharking, excessive interest rates are charged for loans, and frequent low cash value deposits are made.

International Collaboration

As part of the international efforts to combat financial crimes, the JFIU actively collaborates with local and overseas law enforcement agencies, intelligence agencies, and regulatory bodies. By sharing information and intelligence, they strengthen their ability to identify, investigate, and prevent financial crimes.

Reporting and Contact

When in doubt, it is essential to consult the JFIU for guidance. The JFIU’s website (www.jfiu.gov.hk) provides resources for making a report, ensuring the security of your information, and offering feedback. In addition, the JFIU’s telephonic reporting system can be reached at 2866 3366.

Conclusion

By working together, we can protect our financial system from criminals and safeguard the interests of account holders.