Hong Kong stock and real estate markets have recently soared simultaneously. Experts believe it was caused by an influx of “hot money” from mainland China, and worry that it will lead to economic bubbles.
"Hot money" refers to funds that are controlled by investors who actively seek short-term returns. Often, hot money is laundered to “cool” it down, or make it appear legitimate.
The luxury housing market in Hong Kong has risen to as high as 712,800 Hong Kong dollars (US$91,930) per square meter. According to statistics from an intermediary organization, prices for luxury housing in Hong Kong this year have been restored to the level before the financial crisis, and have even exceeded the peak price before the 1997 Asian financial crisis.
An influx of hot money is one of the reasons causing high real estate prices, according to associate Professor Li Kui-Wai from the Department of Economics and Finance of the City University of Hong Kong.
”Many people say that the money came into Hong Kong from mainland China,” Li said. “Though China imposes control over foreign currency, many people are able to bring money [with them] when they come to Hong Kong. Some people say they basically bring money in bags. When someone buys a luxury house, they do not even need to consider a mortgage from a bank, as they would pay in full, in cash.”
Joseph Y.S. Cheng, a professor of political science at the City University of Hong Kong says a significant amount of the money comes from “disgraceful” sources.
“Hence, they want to seek a way out, and hope to transfer money out of China,” he said. “Under such circumstances, we see the wealthiest class in China sending their families to reside abroad, and then try to get a foreign passport, even multiple foreign passports. They also purchase real estate abroad as a way of retreat, and a kind of insurance.”
Cheng also described it as money laundering; “transferring money to somewhere where the Chinese regime does not have jurisdiction.”
“So we have indeed seen such people come to buy luxury housing in Hong Kong,” he said. “Their way of purchase is mostly paying by cash, or paying in one lump sum, unlike ordinary residents, who would buy through a long-term, ten- or twenty-year mortgage.”
The latest data shows that since the beginning of the financial crisis, the total amount of money flowing into Hong Kong has reached 532.6 billion Hong Kong dollars (US$68.69 billion), and is mostly traced to mainland China.
Sung Lap-kung, a program coordinator of the School of Continuing and Professional Education at the City University of Hong Kong, said that much of this hot money has entered Hong Kong from the Pearl River Delta area.
“Much of the hot money is from the 4,000 billion yuan (US$ 585.82 billion) stimulus fund, handed out from the Chinese government, at the end of last year and the beginning of this year,” Sung said. “Much of it has been released from the banks.”
Financial expert Lew Mon-hung said that mainland China’s total credit provided this year is close to 10 trillion yuan (US$1.46 trillion)—more than double the target set by the authorities.
“Some large state-owned enterprises are not short of money,” Lew said. “However, in order to fulfill their credit quota, the banks give many large state-owned corporations excessive amounts of money. They then invest them into the real estate market and the stock market; hence the inflow of hot money.”
Lew suggested that this sudden influx of hot money into Hong Kong is mainly due to distrust of the communist dictatorship.
“Though they used many capitalist ways to develop the economy, it is still under the banner of Marxism,” Lew said. “So people have concerns about this. Mainland China has a market economy that is distorted by power, particularly from the perspective of rule of law. Its law and rule of law do not match international standards.”
Lew said corruption was also a big problem. “Many links provide opportunities for these corrupt officials,” Lew said. “That is, they are eager for high credit quota, the higher the better for them. So as far as the politics is concerned: the GDP has increased; as far as individuals are concerned: they have more opportunities to seek money.”
“Of course there will be money laundering, which is a method of covering up one’s own economic crime,” Lew added.
Many financial experts and scholars are concerned whether such soaring prices in the real estate market will cause an economic bubble.
Once a large-scale outflow of capital occurs, it will impact Hong Kong's dollar interest rate and exchange rate, and the real estate price will drop accordingly. It is estimated that the pressure for lowering the real estate price will be greater and greater after December.
Source: The Epoch Times
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Minggu, 17 Juni 2012
Selasa, 05 Juni 2012
Ghana fingered in Australia massive identity fraud
Ghana has been named as one of the countries whose citizens are stealing the identities of Australians.
News out in the Australian media say the theft which is in a large scale involves spies, drug dealers, illegal immigrants and people engaged in money laundering.
The report say passport details of five people emailed to a travel agent for travel for people from Ghana has been found.
One report by the Herald Sun citing documents from the country’s Department of Foreign Affairs and trade says the illegal practice of forging passports of living Australians is widespread.
According to the report, a fake or doctored Australian passport has been found, on average, once a week in the past three years.
Fake passports were detected at ports in countries including Britain, Dubai, Ghana, Thailand, Hong Kong, Indonesia, Malaysia, Egypt, Turkey, and Peru, the report indicated.
According to the report, some of the passports were in the hands of spies, smugglers and thieves.
Australian passports were used in 525 frauds in the last financial year, and many people were caught lying to get a passport, it said.
Source: Citifmonline
Senin, 28 Mei 2012
Anti-corruption head: Macao SAR ex-secretary's corruption cases "won't drag on indefinitely"
The legal cases involving former policy secretary of Macao Special Administration Region (SAR), Ao Man Long, "won't drag on indefinitely" and "hopefully will be completed before too long", the SAR's Commissioner against Corruption, Cheong U, said at a press conference held here on Monday.
Cheong said that the SAR government has taken legal actions to reclaim Ao's ill-gotten wealth in Hong Kong and other places, but "its progress is not under our control".
Ao Man Long, the disgraced former secretary for transport and public works of the SAR, was sentenced by the SAR's Court of Final Appeal to 27 years in prison on 57 counts of corruption, money laundering, abuse of power and false declaration of assets. Ao is the highest-ranking SAR official ever convicted after the return of Macao to China.
Hong Kong media previously reported that Ao's ill-gotten proceeds and assets were worth 637 million HK dollars (81.7 million U.S. dollars) in 39 Hong Kong bank accounts and two safe deposit boxes, and 92 overseas bank accounts which were opened in the name of Ao, his father, fugitive wife, brother and sister-in-law.
Parts of the cases involving Ao was still under investigation and the total of Ao's ill-gotten wealth amounted to more or less 800 million patacas (103 million U.S. dollars), said the Commissioner. But he refused to disclose the details of these cases, saying he had to respect the confidential obligations of ongoing legal cases.
Last month, Ao's absconded wife was sentenced to 23 years on charges of money laundering and unjustified wealth. His younger brother, Ao Man Fu, was jailed for 18 years, while his brother's wife, Ao Chan Wa Choi, was given 13 years, both on money laundering charges. Ao's father, Ao Veng Kong, got 10 years for money laundering.
"Honestly, even one case like this is already too much for us and Macao," said the Commissioner, referring to the legal cases resulting from Ao's corruption scandal.
He also pointed out that it is high time that the SAR government and the local communities reflected on the cause of Ao's corruption scandal in the wake of his record long sentence.
Editor: Wang Hongjiang
Source: Xinhua
Cheong said that the SAR government has taken legal actions to reclaim Ao's ill-gotten wealth in Hong Kong and other places, but "its progress is not under our control".
Ao Man Long, the disgraced former secretary for transport and public works of the SAR, was sentenced by the SAR's Court of Final Appeal to 27 years in prison on 57 counts of corruption, money laundering, abuse of power and false declaration of assets. Ao is the highest-ranking SAR official ever convicted after the return of Macao to China.
Hong Kong media previously reported that Ao's ill-gotten proceeds and assets were worth 637 million HK dollars (81.7 million U.S. dollars) in 39 Hong Kong bank accounts and two safe deposit boxes, and 92 overseas bank accounts which were opened in the name of Ao, his father, fugitive wife, brother and sister-in-law.
Parts of the cases involving Ao was still under investigation and the total of Ao's ill-gotten wealth amounted to more or less 800 million patacas (103 million U.S. dollars), said the Commissioner. But he refused to disclose the details of these cases, saying he had to respect the confidential obligations of ongoing legal cases.
Last month, Ao's absconded wife was sentenced to 23 years on charges of money laundering and unjustified wealth. His younger brother, Ao Man Fu, was jailed for 18 years, while his brother's wife, Ao Chan Wa Choi, was given 13 years, both on money laundering charges. Ao's father, Ao Veng Kong, got 10 years for money laundering.
"Honestly, even one case like this is already too much for us and Macao," said the Commissioner, referring to the legal cases resulting from Ao's corruption scandal.
He also pointed out that it is high time that the SAR government and the local communities reflected on the cause of Ao's corruption scandal in the wake of his record long sentence.
Editor: Wang Hongjiang
Source: Xinhua
Rabu, 23 Mei 2012
FATF considers Hong Kong's measures to be effective
Financial Action Task Force considers Hong Kong's measures to be effective, but could improve
While Hong Kong has a good legal structure to combat money laundering (ML) and terrorist financing (TF), measures taken to prevent such cases form occurring could be improved, according to a report by the Financial Action Task Force (FATF).
The FATF completed an assessment on the SAR last month, of the implementation of anti-money laundering and counter-terrorist financing (AML/CFT) standards in Hong Kong, coming to several conclusions about the city's ability to protect itself against underhanded monetary practices.
Amongst their findings, the FATF state that “Hong Kong has a good legal structure to combat money laundering (ML) and terrorist financing (TF)” with a broad offence that almost meets the FATF's requirements. They add that “it is well prosecuted with a satisfactory conviction rate.”
Yet, they point out that the TF does not “cover provision/collection for an individual terrorist or terrorist organisation” nor does the offence apply to non-financial assets or “extend to terrorism directed towards international organisations.”
Nevertheless, terrorist funds have not been detected in Hong Kong and there have been no prosecutions for TF.
And while Hong Kong “has a fairly comprehensive criminal confiscation regime,” this doesn't extend to all cases such as predicate offences. In addition, “legislative provisions enacted for confiscation of the proceeds of TF are not yet in force,” according to the statement.
Meanwhile, Hong Kong’s financial intelligence unit, the Joint Financial Intelligence Unit (JFIU), is considered effective.
Prevention takes the form of customer identification which applies to a range of financial institutions and some designated non-financial businesses and professions (DNFBPs) but is limited for non-core financial institutions.
According to the statement, “the preventive system for some non-core financial institutions does not incorporate adequate customer due diligence requirements with respect to politically exposed persons.”
And while the number of suspicious transaction reports (STRs) has increased, the submission of these reports by the DNFBPs could be improved.
Finally, Hong Kong's extradition regime is considered uncomplicated and “not subject to unreasonable grounds for refusal.”
Additionally, authorities are seen to provide a great deal of international cooperation as well as the facilitates to exchange “prompt and constructive exchange of information.”
Source: Macau Daily Times
While Hong Kong has a good legal structure to combat money laundering (ML) and terrorist financing (TF), measures taken to prevent such cases form occurring could be improved, according to a report by the Financial Action Task Force (FATF).
The FATF completed an assessment on the SAR last month, of the implementation of anti-money laundering and counter-terrorist financing (AML/CFT) standards in Hong Kong, coming to several conclusions about the city's ability to protect itself against underhanded monetary practices.
Amongst their findings, the FATF state that “Hong Kong has a good legal structure to combat money laundering (ML) and terrorist financing (TF)” with a broad offence that almost meets the FATF's requirements. They add that “it is well prosecuted with a satisfactory conviction rate.”
Yet, they point out that the TF does not “cover provision/collection for an individual terrorist or terrorist organisation” nor does the offence apply to non-financial assets or “extend to terrorism directed towards international organisations.”
Nevertheless, terrorist funds have not been detected in Hong Kong and there have been no prosecutions for TF.
And while Hong Kong “has a fairly comprehensive criminal confiscation regime,” this doesn't extend to all cases such as predicate offences. In addition, “legislative provisions enacted for confiscation of the proceeds of TF are not yet in force,” according to the statement.
Meanwhile, Hong Kong’s financial intelligence unit, the Joint Financial Intelligence Unit (JFIU), is considered effective.
Prevention takes the form of customer identification which applies to a range of financial institutions and some designated non-financial businesses and professions (DNFBPs) but is limited for non-core financial institutions.
According to the statement, “the preventive system for some non-core financial institutions does not incorporate adequate customer due diligence requirements with respect to politically exposed persons.”
And while the number of suspicious transaction reports (STRs) has increased, the submission of these reports by the DNFBPs could be improved.
Finally, Hong Kong's extradition regime is considered uncomplicated and “not subject to unreasonable grounds for refusal.”
Additionally, authorities are seen to provide a great deal of international cooperation as well as the facilitates to exchange “prompt and constructive exchange of information.”
Source: Macau Daily Times
Senin, 21 Mei 2012
HK's anti-money laundering efforts hailed
International anti-money laundering groups have praised Hong Kong's work against the crime and counter terrorist-financing regimes.
The comments were made in an evaluation report published today by the Financial Action Task Force on Money Laundering, and the Asia-Pacific Group on Money Laundering.
The report commended Hong Kong for its good legal structure and conviction rate for money laundering offences, clear and broad obligations for reporting suspicious transactions and strong law enforcement.
It said the city's supervisory regime over the banking, securities and insurance sectors is effective with comprehensive obligations and a broad range of sanctions, along with proactive and effective outreach to the private sector and international co-operation.
Hong Kong's formation of the Central Co-ordinating Committee on Anti-Money Laundering & Counter Financing of Terrorism chaired by the Financial Secretary was also a welcome development, it said.
On the report's suggestions for further improvements, the Security Bureau said it will formulate legislative proposals, enhance law enforcement in regulating remittance agents and moneychangers, and consult the industry.
As a taskforce member, Hong Kong is obliged to adopt the 40 recommendations for fighting money laundering and the nine special recommendations for combating financing of terrorism.
Source: Law & Order News
The comments were made in an evaluation report published today by the Financial Action Task Force on Money Laundering, and the Asia-Pacific Group on Money Laundering.
The report commended Hong Kong for its good legal structure and conviction rate for money laundering offences, clear and broad obligations for reporting suspicious transactions and strong law enforcement.
It said the city's supervisory regime over the banking, securities and insurance sectors is effective with comprehensive obligations and a broad range of sanctions, along with proactive and effective outreach to the private sector and international co-operation.
Hong Kong's formation of the Central Co-ordinating Committee on Anti-Money Laundering & Counter Financing of Terrorism chaired by the Financial Secretary was also a welcome development, it said.
On the report's suggestions for further improvements, the Security Bureau said it will formulate legislative proposals, enhance law enforcement in regulating remittance agents and moneychangers, and consult the industry.
As a taskforce member, Hong Kong is obliged to adopt the 40 recommendations for fighting money laundering and the nine special recommendations for combating financing of terrorism.
Source: Law & Order News
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