Financial Crime World

Penalties for Money Laundering and Terrorist Financing Crimes in Hong Kong: A Legal Perspective

Amidst the global fight against money laundering and terrorist financing, Hong Kong has enacted stringent legislations to curb the menace. In this article, we will discuss the penalties for two of the most significant offenses under Hong Kong law: money laundering and terrorist financing.

Money Laundering

According to sections 25(1) of the Drug Trafficking (Recovery of Proceeds) Ordinance (Cap. 405) and Organized and Serious Crimes Ordinance (Cap. 455), money laundering refers to dealings with property, including money, if a person has reasonable grounds to believe it is connected to proceeds of drug trafficking or an indictable offense. The maximum penalty for this offense is a HK$ 5,000,000 fine and 14-year imprisonment.

  • Money laundering is dealing with property connected to proceeds of drug trafficking or an indictable offense.
  • The maximum penalty for money laundering is a HK$ 5,000,000 fine and 14-year imprisonment.

Terrorist Financing

Under the United Nations (Anti-Terrorism Measures) Ordinance (Cap. 575), providing or collecting funds with the intention of using them for terrorist acts is considered an offense. The maximum penalty for this offense is a fine and 14-year imprisonment. The UNATMO Cap. 575 took effect on 1st January 2011. Any contravention of a notice under section 6(1) or evasion of a requirement under section 6(7) is also an offense.

  • Terrorist financing involves providing or collecting funds for terrorist acts.
  • The maximum penalty for terrorist financing is a fine and 14-year imprisonment.
  • The UNATMO Cap. 575 came into effect on 1st January 2011.

Suspicious Transaction Reporting

Individuals are required to report their knowledge or suspicion of property being proceeds of crime or terrorist property as soon as practicable to an authorized officer under sections 25A, 25A(2), 12 of the Drug Trafficking (Recovery of Proceeds) Ordinance (Cap. 405), Organized and Serious Crimes Ordinance (Cap. 455), and United Nations (Anti-Terrorism Measures) Ordinance (Cap. 575). Failing to report is an offense, which could result in a HK$ 50,000 fine and 3-month imprisonment.

  • Individuals are required to report their knowledge or suspicion of proceeds of crime or terrorist property to an authorized officer.
  • Failing to report is an offense, with a fine of HK$ 50,000 and 3-month imprisonment.

Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615)

The Anti-Money Laundering and Counter-Terrorist Financing Ordinance, Cap. 615, which enhances Hong Kong’s Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) regime, came into operation on 1 April, 2012, and has been further amended since 1 March 2018.

  • Cap. 615 enhances Hong Kong’s AML and CTF regime.
  • It came into operation on 1 April, 2012, and has been amended since 1 March 2018.

According to sections 25A(2), 25A(2A), 12(2), and 12(2A) of the Drug Trafficking (Recovery of Proceeds) Ordinance, Cap. 405, Organized and Serious Crimes Ordinance, Cap. 455, and sections 12(2) and 12(2A) of the United Nations (Anti-Terrorism Measures) Ordinance, Cap. 575, continuing to deal with property suspected to be proceeds of crime or terrorist property with consent from an authorized officer can be used as a defense under the respective ordinances. An authorized officer can be a police officer, a member of the Customs and Excise Service, a member of the Immigration Service, or an officer of the Independent Commission Against Corruption.

  • The Letter of No Consent (LNC) mechanism allows individuals to continue dealing with property suspected to be proceeds of crime or terrorist property with authorization.
  • Authorized officers include police officers, Customs and Excise Service members, Immigration Service members, and officers of the Independent Commission Against Corruption.
  • The considerations in issuing an LNC and the actions taken by the police after issuance include assessing the prospects of obtaining confiscation and restraint orders, civil injunctions, victims’ actions, and other relevant factors.
  • Each case is decided on its merits.