Transcript Suspicious Transaction Reporting

聯 合 財 富 情 報 組
Joint Financial Intelligence Unit
AML/CFT Seminars for DNFBPs
Joint Financial Intelligence Unit
(JFIU)
Bonnie Cheung
Senior Inspector
Customs and Excise Department
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聯 合 財 富 情 報 組
Joint Financial Intelligence Unit
Outline of Presentation
1. Joint Financial Intelligence Unit
2. Legislation
3. Suspicious Transactions Report
4. Case Sharing
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Joint Financial Intelligence Unit
JFIU

Established in 1989

Jointly operated by Police and Customs

Housed within Police Headquarters

Primary function is to receive, analyze
and disseminate STR
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Joint Financial Intelligence Unit
AML Legislation
s.25(1) of OSCO/DTROP*:
Dealing with property known or
believed to represent proceeds
of an indictable offence
Penalty: 14-year Imprisonment
& $ 5 Million Fine
* Organized and Serious Crimes Ordinance, Cap.455 (OSCO)
* Drug Trafficking (Recovery of Proceeds) Ordinance, Cap.405 (DTROP)
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CFT Legislation
s.7 of UNATMO*
Provides or collects funds, with
intention or knowing that funds
will be used to commit terrorist
act(s)
(whether or not the funds are actually so used)
Penalty: 14-year Imprisonment
& Fine
* United Nations (Anti-Terrorism Measures) Ordinance, Cap.575 (UNATMO)
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Suspicious Transaction Reports
s.25A of DTROP / OSCO
s.12 of UNATMO
Any person who knows or suspects any
property represents the proceeds of crime or
terrorist property shall make a report to an
authorized officer.
Penalty: 3-month Imprisonment & $50,000 fine
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"authorized officer"
s.2 of DTROP / OSCO
(a)
(b)
(c)
HKP officers;
C&E officers; or
any other person authorized by the S for J
s.2 of UNATMO
(a)
(b)
(c)
(d)
HKP officers;
C&E officers;
ImmD officers; or
ICAC officers
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Suspicious Transaction Reports

DISCLOSURE is SUSPICION based

NO Threshold Reporting

PROSECUTION is based on
REASONABLE KNOWLEDGE
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Joint Financial Intelligence Unit
Benefits of Making an STR?
Immunity from Prosecution for
Dealing in the Property
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Joint Financial Intelligence Unit
Benefits of Making an STR?
s.25A(2) DTROP/OSCO
s.12(2) UNATMO
If a person deals with property & STR relates to
that act, that person has a defence to ML/TF,
provided:(i)
STR made before act & act done with the
consent of an authorized officer; or
(ii)
STR made
- after the act
- on his own initiative
- as soon as reasonably practicable
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Exemption of Liability
s.25A(3) of DTROP/OSCO
s.12(3) of UNATMO
(a)
shall NOT be treated as a breach of any
restriction upon the disclosure of information imposed
by contract or by any enactment, rule of conduct or
other provision;
(b)
shall NOT render the person who made it liable
in damages for any loss arising out of-
(i)
(ii)
the disclosure;
any act done or omitted to be done in
relation to the property concerned in
consequence of the disclosure.
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Tipping Off
s.25A(5) of DTROP/OSCO
s.12(5) of UNATMO
A person commits an offence if, knowing or
suspecting that a disclosure has been made,
he discloses to any other person any matter
which is likely to prejudice any investigation
which might be conducted following that firstmentioned disclosure
Penalty: 3-year Imprisonment & $500,000 Fine.
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Restriction on Revealing STR
s.26(1) of DTROP/OSCO
NO witness in any civil or criminal proceedings shall
be obliged(a)
to reveal that a disclosure was made;
(b)
to reveal the identity of any person as the
person making the disclosure; or
(c)
to answer any question if the answer would
lead, or would tend to lead, to the revealing of
any fact or matter referred to in paragraph (a)
or (b).
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Sharing STR Info. with LEAs
s.25A(9) of DTROP/OSCO and s.12(6) of UNATMO
STR may be disclosed by any authorized officer to(a)
DoJ, HKP, C&ED, ImmD, and ICAC; and
(b)
the overseas LEAs or FIUs,
for the purpose of combating crime/preventing and
suppressing the financing of terrorist acts
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JFIU Operation
Financial
Institutions
LEAs
STR
Intelligence
Feedback
Feedback
JFIU
LEAs
Comm.
Gov’t
Bodies
Overseas
FIUs
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Case Example (1)
Trust Service Provider operating
a Trust Company “L”
Mr. A
Clients
“Pure Trust
Organizations” (PTO)
Placed
their life
savings
into PTO
•Asset Protection
Defraud
•Funds beyond the reach
of US Govt’ and creditors
Pure Trust
Organizations
Wired large sum to 51 different US
and offshore banks
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Significance
• Use of trusts to divert the money flow
• Use of trusts and corporations to conceal
identity of clients
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Case Example (2)
Defraud clients ~ USD $8 million
Client D
Deposited to Bank Y
&K
A/C in
Bank Z
TCSP A in
Two A/Cs were set
up in Liechtenstein
A/C in
Bank Y
Trust A
(in USA)
D & K gave a Power of
Attorney to A
California
A/C in
Liechtenstein
Held by A
Over USD $2 millions were
withdrawn and transferred out
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Significance
• Use of trusts to conceal identity of clients
• Use of trusts to divert the money flow
• Use of offshore bank account
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Thank you!
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