June 2009

16/06/2009 – Hong Kong to table in new Anti-Money Laundering Legislation.

Hong Kong is to witness a new reform to its current anti-money laundering guidelines, according to the South China Morning Post. Hong Kong’s Financial Services and the Treasury Bureau, a governmental department which co-ordinates overall compliance with the Financial Action Task Force’s 40+9 Recommendations within Hong Kong, have submitted new anti-money laundering legislation.

The Bill was submitted before the Legislative Council early this month and is expected to be tabled in front of the Council next June.

The Bill is understood to authorise the Financial Regulators, such as the Securities and Futures Commission, with more authority to target money laundering. The regulators will be able to issue harsher sanctions on non-compliant institutions.

In the proposal submitted to the Legislative council, the Financial Services and the Treasury Bureau said any institutions subjected to AML, such as banks, securities and futures brokerages, and insurance institutions, which breached the AML law could be charged with a criminal offence and could be faced with a fine or jail sentence. Currently lawyers are covered by Section 25 of the Drug Trafficking (Recovery of Proceeds) Ordinance.

Sources:

Complinet: 05 June 2009
Hong Kong Legal News: 04 June 2009
South China Morning Post: 05 June 2009

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04/06/2009 – Andorra, Liechtenstein and Monaco are removed from the OECD list of Unco-operative Tax Havens.

Andorra, Liechtenstein and Monaco are no longer listed as unco-operative Tax havens. The Organisation for Economic Co-Operation and Development (OECD) announced at the end of May that its Committee on Fiscal Affairs had decided to remove all three jurisdictions from the so-called black list. These jurisdictions have committed to the internationally agreed tax standard and are to implement them by the end of 2009.

The list, originally drawn up in the late 1990s, highlighted the jurisdictions most likely to draw opportunities for money laundering and tax evasion. Different countries were categorised in accordance to their compliance with the OECD standards of transparency. Those fully compliant are on the white list, those partially compliant on the grey list and those not complaint on the black list.

In 2002 seven jurisdictions were identified as tax havens as they did not make commitments to transparency and exchange of information. Today, with the removal of Monaco, Andorra and Liechtenstein, no jurisdiction is currently listed as an unco-operative tax haven by the Committee.

This will be a welcome step for most international organisations that are trying to combat money laundering. The OECD has stated that there are substantial similarities between the techniques used to launder the proceeds of crimes and to commit tax crimes. Tax and anti-money laundering officials have regularly shared experiences on some practices to enhance combating of tax evasion and money laundering. The OECD and the Financial Action Task Force have also established a dialogue in order to improve co-operation between tax and anti-money laundering authorities.

With the fall on the number of jurisdictions associated as tax havens, it is hoped that there will be a fall in money laundering crimes. This will pave the way for stronger Anti-Money Laundering legislation and policies to be passed, as international bodies show that those presently enforced are working and enhancing the growing trend for international co-operation.

However, despite the progress in relation to the crack down of tax evasion and surveillance of money laundering, new regions nevertheless emerge to counteract the efforts. The OECD has recently said that it had identified at least four other tax jurisdictions as possible new tax havens. These include Jamaica, Qatar, Botswana and Ghana. Clearly, these will be watched and pressurised to adopt new anti-money laundering bills.


Wealth Bulletin: 29 May 2009
The Organisation for Economic Co-operation and Development:

• Tax Crimes and Money Laundering;
  
• Andorra, Liechtenstein and Monaco Removed From OECD List of Unco-operative Tax Havens;
  
• OECD Welcomes Monaco Pledge on Exchange of Information in Tax Matters;
  
• List of Unco-operative Tax Havens.
  

 
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