National security law: Hong Kong banks told by HKMA to report suspicious transactions
21 Oct 2020

Banks operating in Hong Kong have been told to report financial transactions believed to violate the city’s controversial national security law (NSL) as they would suspected incidents of money laundering or terrorism financing, according to the city’s top financial regulator.

In a document posted on its website, the Hong Kong Monetary Authority (HKMA) advised banks to file suspicious transaction reports for dealings that may be related to violations of the national security law to the city’s Joint Financial Intelligence Unit, an investigative division of the Hong Kong Police Force and the Customs & Excise Department.

“The obligation for reporting under the NSL will be triggered when an [authorised institution] ‘knows’ or ‘suspects’ that any property is offence-related property,” the HKMA said in an updated frequently-asked-questions document on its website.

The advice, updated on September 30, encourages banks to report those transactions as they would for suspected violations of the city’s organised and serious crimes, drug trafficking, and anti-terrorism laws, according to the HKMA. The obligation would apply to both local and international banks in the city.

The HKMA, which also acts as the city’s de facto central bank, did not have an immediate comment when contacted on Tuesday.

The Hong Kong Association of Banks, which drafted the frequently asked questions advice alongside the HKMA, also did not respond to a request for comment on Tuesday.

The Financial Times reported the change earlier on Tuesday.

Beijing adopted the national security law for the city on June 30, the day before the 23rd anniversary of the handover of Hong Kong and an annual march by opposition activists.

The law targets acts of secession, subversion, terrorism and collusion with foreign forces and was adopted following months of anti-government protests in the city. Critics said the law infringes on freedoms guaranteed under the Basic Law, the citys’ mini-constitution.

The national security law is the latest flashpoint between Washington and Beijing as relations between the world’s two biggest economies become increasingly strained over a variety of issues, including technology and trade.

The United States sanctioned 11 Hong Kong and mainland officials over the law in August and has threatened to sanction financial institutions that engage in “significant transactions” with individuals identified by the US as undermining the city’s autonomy. China’s foreign ministry vowed last week to enact its own “countermeasures” in response.

Hong Kong chief executive Carrie Lam Cheng Yuet-ngor and other city leaders have argued the sweeping national security law is necessary and similar to efforts by other countries to fight terrorism. Lam is one of the officials sanctioned by the US over the law.

By Chad Bray, South China Morning Post, 20 October 2020

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