MSAR audit


The MSAR was not the only region to fall under the gaze of the Asia/Pacific Group (APG), an autonomous international organisation set up to combat money laundering, in its audit this year.
According to the group’s yearly report, published Tuesday, the MSAR joined Cambodia, Mongolia, Thailand and the United States in mutual evaluations to assess and improve compliance, with evaluations to be adopted after the group’s annual meeting.
Last year saw Bangladesh, Bhutan, Canada, Fiji and Singapore finalise their audits, while the MSAR played host to one of the group’s assessor training exercises.
The audit is the first to have taken place since 2007, when the group found that ‘drug crime, organised crime, kidnapping, bribery and illegal gambling are considered to be the major sources of illegal proceeds,’ relating to money laundering and financing of terrorism. It said that the ‘low number of convictions, considering STRs (suspicious money transactions) recorded and no comprehensive statistics existent under previous applicable money laundering legislation, provides some doubts on the effectiveness of previous regime’.
In addition, the 2007 report noted that ‘it is impossible to assess the effectiveness of the current legislation and other regulations,’ due to there being ‘no comprehensive statistical system in place under the new money laundering criminalisation regime’.
The timing of the first evaluation came just as new amendments were being made to the MSAR’s AML/CFT regulations, while last year’s audit occurred under similar circumstances.
Factors such as ‘no freezing provisions and procedures for money laundering activity […] no comprehensive special investigative techniques provisions in place so money laundering activities […] requests cannot be fully complied with,’ are being attempted to be resolved through the passing in generality of the bill on money laundering and terrorism financing activities in November of last year. The bill is currently under consideration by the 3rd standing committee of the Legislative Assembly.
The bill comes nearly 10 years after the long list of suggestions provided by the group, although local authorities’ response to the report at the time noted that it would ‘take some time to fully implement the control measures and allocate the necessary resources’.