Wù u( ÕÔÍ ÏÔÏÔÍ ÛØÖÕÙËÙ · 2018-01-04 · 1. Money laundering is very serious offence 2. Elements of ‘money laundering’: whether the defendant dealt with the money

Joint Financial Intelligence Unit

Alfred CHOWDetective Senior Inspector of Police2013-Oct-02

Emerging Money Laundering Methods & Trends

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Contents

Definition Court Judgment Usual Money Laundering

Methods Emerging Trends




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Money Laundering Offence

• S.25 (1) of DTROP (Cap. 405) / OSCO (Cap. 455)– Knowing / Having reasonable grounds to believe

that– Any property represents any person’s proceeds of

drug trafficking / indictable offence– Deals with that property

• MAX PENALTY:– Fine of $5,000,000-HKD &– Imprisonment for 14 years




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Court JudgmentCAAR 6/2011




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Court Judgment1. Money laundering is very serious offence

2. Elements of ‘money laundering’: whether the defendant dealt with the money involved in the offence, and if he did, whether he had reasonable grounds to believe that the money was ‘illicit money’

3. But whether the money was actually ‘illicit money’ is the not the element of offence




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Court Judgment

The fact that the respondent ‘laundered illicit money’ when she was operating a remittance business increased the gravity of this case




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Court Judgment

The law compels people who are engaged in remittance business and those engaged in money changing business to verify the identifies of the clients and make records in the case of every transaction which is $8,000 or more in value




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Court Judgment

• In two years, dealt with $500,000,000• Did not bother to make enquiries about the

money origin• Follow instructions and transfer to others• Received monetary rewards

Sentenced to immediate imprisonment for four years




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Money Laundering Stages

Placement

LayeringIntegration

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Money Laundering StagesPlacement

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Smuggling cash

Business

Real Estate

Valuables

Currency

Securities

Banking System

Remittance




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Layering

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Multipletransactions

MultipletransfersDeposits




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Integration

- Use layered funds to purchase‘clean assets’

- Liquid assets- Fixed assets (e.g. real estate )- Business




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Money Laundering StagesIntegration

A/C Business Real Estate Valuables Currency Securities

The Gang

Integrate the assets for the criminals to use again




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Importance of MSOs in Anti-MLBusiness Characteristics

• One-off• Cash Transactions• Simple• Worldwide




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Emerging Trends

New Challenges

• High-tech and Internet driven• Complex financial products• Involving professions• Involving different countries




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Emerging Trends

Relationship with JFIU (fr Guideline)Compliance Officer & Money Laundering Reporting Officer

• Reporting numbers and disclosures to JFIU

• Review internal disclosures and reports

• Act as the main point of contact with JFIU




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Emerging Trends

Relationship with JFIU (fr Guideline)Timing of identification and verification of identity

• If cannot complete CDD, must not establish business relationship and assess whether need to report to JFIU




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Emerging Trends

Relationship with JFIU (fr Guideline)Ongoing Monitoring• Upon filling of report to JFIU, conduct review

of the business relationship• For cash transactions and not in accordance

with customer’s known practice, consider report to JFIU




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Thank You




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Documents

Wù u( ÕÔÍ ÏÔÏÔÍ ÛØÖÕÙËÙ · 2018-01-04 · 1. Money laundering is very serious offence 2. Elements of ‘money laundering’: whether the defendant dealt with the money