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Laundering, terrorism bill to be gazetted

February 22, 2017

A bill seeking to align Hong Kong's anti-money laundering and counter-financing of terrorism regime with prevailing international standards as prescribed by the Financial Action Task Force will be gazetted on February 24.

 

The Cross-boundary Movement of Physical Currency & Bearer Negotiable Instruments Bill will establish a declaration and disclosure system to detect the movement of large quantities of physical currency and bearer negotiable instruments into and out of Hong Kong.

 

The R32 system envisaged in the bill aims to stop and restrain such currency and instruments suspected to be crime proceeds or terrorist property.

 

In a public consultation exercise conducted recently on the proposal, the Security Bureau received 28 written responses and met with over 40 parties including chambers of the commerce and trade sectors.

 

Most respondents acknowledged the need to introduce the R32 System, the bureau said, adding that many of them supported the Government's affirmation that it would not be any form of currency control and should not affect the freedom of movement, the free flow of capital and the free trade policy.

 

Under the system, passengers arriving via specified control points in possession of currency and instruments valued over $120,000 have to make a written declaration to the Customs & Excise Department, using the Red Channel under the prevailing Red & Green Channel System.

 

Those arriving not via specified control points and about to leave will be required to disclose, upon Customs’ request, whether they possess currency and instruments valued over $120,000, and if so, they should make a written declaration.

 

The maximum penalty for violation is a fine of $500,000 and two years’ jail.

 

The bill will be tabled at the Legislative Council on March 1 so preparations can be made for the practical operation of the system before the Financial Action Task Force's coming mutual evaluation of Hong Kong scheduled in 2018.



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