Hong Kong became the first Asian economy to be judged in overall compliance and effectiveness in meeting the anti-money laundering and counter-terrorist financing requirements of the Financial Action Task Force. The June 20 decision followed a lengthy review by other members of the leading global body tackling those and other illicit financial activities.
The city was commended for its strong legal foundation and effective system for combating money laundering and terrorist financing, with the report recognizing Hong Kong's particular effectiveness in risk identification, law enforcement, asset recovery, counter-terrorist financing and international co-operation, the Hong Kong government said in a statement.
Before Hong Kong, only five out of 23 assessed jurisdictions have been rated overall compliant by FATF: Greece, Italy, Portugal, Spain, and the UK.
FATF comprises 39 major economies, conducting regular peer reviews of member jurisdictions to assess their compliance with the international AML/CTF standards. Lasting for over a year, the mutual evaluation was undertaken by an assessment team of 10 experts from FATF. The group's report was examined by the full FATF membership at its June Plenary held in the US. The Report is expected to be published in September.
Hong Kong also held onto its place as the world’s third-largest recipient of foreign direct investment last year, according to the recently released World Investment Report from the United Nations Conference on Trade & Development. Fourth-placed Singapore received only two-thirds as much with US$78 billion.
On the flipside, Hong Kong outflows also remained substantial at US$85 billion in 2018, down US$2 billion from a year earlier. That pushed the SAR into fourth spot globally, from sixth in 2017, the report showed.
Hong Kong concluded a comprehensive double taxation treaty with Cambodia on June 26, the 41st of such agreements, seen as a key driver of bilateral trade and a vital component in the city’s competitiveness as a global shipping and logistics hub. Negotiations with 14 more tax jurisdictions are ongoing, according to Hong Kong’s Inland Revenue Department.
The accord also incorporated an article on exchange of information, helping Hong Kong to meet its international obligations on enhancing tax transparency and combating tax evasion.