The setting up of a banking industry working group on countering money laundering and terrorist financing issues shows Hong Kong's strong determination to guard against the abuse of its banking system, Monetary Authority Executive Director Simon Topping says.

In his latest Viewpoint article published today on the authority's website, Mr Topping said given the rising concern about international terrorist activities, including the possible proliferation of weapons of mass destruction, the focus on anti-money laundering and counter-terrorist financing has shifted towards terrorist financing.

Security upgrades

The techniques that money launderers and terrorists use to disguise their financial activities have also become more innovative and sophisticated, making it necessary for authorities and financial institutions to bolster their awareness of new methods for laundering money and upgrade their systems and controls.

To help deal with the difficult anti-money laundering and counter-terrorist financing issues from a practical perspective, and reflect business needs, the authority has recently co-ordinated the establishment of an industry working group, which includes representatives of 20 authorised institutions.

The group has met twice, and three user sub-groups have been formed to share experiences and consider the way forward in areas like the so-called "politically exposed people", terrorist financing, transaction monitoring systems and private banking issues.

More initiatives

The authority is also taking initiatives to reinforce the focus on anti-money laundering and counter-terrorist financing issues, including issuing circulars and guidance to authorised institutions on combating the financing of weapons of mass destruction, conducting in-depth examinations of institutions' controls, and setting out the practices expected in high-risk areas such as correspondent banking, private banking and remittances.

Noting such measures may occasionally cause inconvenience to bona-fide customers, Mr Topping said they are necessary to deter criminals, money launderers and terrorists - and to keep Hong Kong's banking system clean.