The Hong Kong Monetary Authority released more guidance on how banks can comply with the national security law in the city, specifically with regards to reporting requirements.
The guidelines state that banks will be required to report transactions either confirmed or deemed suspicion, in according to the national security law (NSL), enacted in June this year.
«The obligation for reporting under the NSL will be triggered when an [authorized institution] (AI) «knows» or «suspects» that any property is offense-related property,» the HKMA said in the guidelines released in late September.
No Search Warrant Required for the «Exceptional»
Although the guidelines note that suspicious transaction reporting and law enforcement request will ordinarily fall in line with existing practice, there are some «exceptional» cases where this longstanding protocol will now change.
«Under exceptional circumstances where it would not be reasonably practicable to obtain such a search warrant, a police officer at or above the rank of Assistant Commissioner of Police may authorize the search,» the HKMA said.
«In such cases, a formal written document will be produced to the AI on spot, with the name and contact details of the authorized officer clearly stated.»
Top Risk Unaddressed
The top risk left unaddressed in the guidelines relates to the provision in the NSL which prohibits compliance with foreign sanctions – an issue, if enforced, is likely to reveal industrywide violations linked to Washington’s «Hong Kong Autonomy Act» including from Chinese banks.
«Global banks have always lived in contradictions,» said Saurabh Nagar, a director at risk compliance firm Accuity in a recent interview with finews.asia.
«As a global bank, you have to comply with so many regulations from different jurisdictions and they don’t always agree with each other.»
