Tag financial institution

Hong Kong a playground for money launderers?

By in Hong Kong Tag , ,
money launderers
The city has very strict AML controls, this doesn’t facilitate, less to say, the work of Financial Institutions and services providers. The compliance process to open and maintain an account is time consuming and the Hong Kong banks are showing low business & risks appetite.
Hong Kong in contrary to Singapore is not allowing bank account opening at distance and the impact after months of COVID is really bad.

Quarantine in Hong Kong is 21 days, the Chinese border is closed but in the same time next to my Sheung Wan office new foreign exchange shops are opening.

  • 65 million of visitors are not coming anymore to Hong Kong.
  • The possibility to travel to Hong Kong without 14 to 21 days quarantine is quasi-NIL for the next six months.
  • Existing foreign exchanges shops are empty.
  • The proposed services are very well rendered by Financial Institution and Fintech.
  • Because of the crazy Hong Kong property market this means that each shop has minimum monthly costs of 15,000 USD so the possibility to make it successful taking into consideration all the above constraints is very low.

In a city where you nearly need a DNA sample from your grandma to open a bank account how come that nobody is questioning these multiples openings ???

This leads to serious questions:

  1. Why Financial Institutions are accepting new Foreign Exchanges companies in the current economic environment, what about their risk management?
  2. Why financial Institutions are accepting high risks clients when in the same time they are rejecting lower risks clients? Why do they accept companies in direct competition with their services?
  3. Why Financial Institution are accepting that some of their clients are withdrawing cash to turn it to another currency and sometimes to remit to their suppliers and services providers?
  4. How everybody could justify the increase of monitoring impacted by low traceability of transfers?
  5. Last but not least every compliance officer with little to no training will understand that an operation should be logic, what is the logic behind all this?

I see two possibilities:

  1. it would consist of willful blindness from the regulators
  2. it would be a sting operation to identify in the clients of theses mysterious shops the criminals using their services.

Is it necessary to infantilize compliance officers?

By in Corporate Services Tag , ,
Compliance

Should we continue to train compliance officers by mentioning unreachable goals, by inflating the importance of their actions and erecting them as the ultimate line of defense which will protect the society against criminals and terrorists?

Or should we be more pragmatic and told them that only 0.2 % of the proceeds of crime are seized, that most of their actions will disturb and inconvenience the work of legitimate business owners and that their job description is above all to protect their financial institution?

Are the compliance officers kids to be motivated or adults to be respected for the efficiency of their actions?

With 99% of criminal proceeds being injected without being noticed in the financial institutions, maybe the training should be focused on criminal activities, on criminal personalities and on the right, provocatively the obligation, to go FAST to the next potential case.

The current tick-in-the box system isn’t working as it should, compliance officers are losing their energy by over-working on cases that they should close FAST if any wrong doing isn’t detected.

With the obligation to protect their employers, by adding multiples layers of useless information as their employers should demonstrate the efficiency of their AML organization, everything is getting SLOW, everything but the criminals.

To compensate for the routine of a very administrative job description the training sessions are going over the top in describing the importance of the work, infantilizing the compliance officers.

We need to show more respect:

  1. To the compliance officers, by allowing them to go faster to the next suspicion
  2. To legitimate business owners, by stopping the inconveniences    
  3. To the public, by changing the system and so increasing the efficiency

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