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Hong Kong and Macao ‘vulnerable to money laundering’

Thursday, 6 March, 2014

More than a third of Hong Kong and Macao firms have experienced money laundering in some form – three times more than regional and global averages, according to a survey by PricewaterhouseCoopers (PwC).

The survey polled 201 executives in mainland China, Hong Kong and Macao. Some 28 per cent of respondents did not perform risk assessments, while 48 per cent did not know what these involved.

Many organisations in the region were failing to use statistical techniques to aid their anti-money laundering efforts and their overall compliance programmes.

About 27 per cent of respondents in mainland China and 16 per cent in Hong Kong and Macao reported suffering economic crime during the past 24 months. This is actually less than the worldwide average of 37 per cent. However, inside jobs were far more common in the Asian centres than anywhere else, even Russia. The companies' own employees had perpetrated almost four out of five of the financial crimes reported.

Bribery and corruption is a persistent risk in mainland China, where nearly 40 per cent of participants had experienced graft.

John Donker, PwC's Asia-Pacific Forensics Services Leader in Hong Kong, said the two international financial centres were likely to be a future focus of regulatory activity, given Hong Kong's immense financial services businesses and Macao's large gaming sector. He said financial institutions and corporations had to deal with the ‘prevailing lack of organisational transparency in Greater China’.


Sources