Speech by SJ at plenary session of 15th China-ASEAN Prosecutors-General Conference (English just) (with image)
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Following is the speech by the Secretary for Justice, Mr Paul Lam, SC, at the plenary session of the 15th China-ASEAN Prosecutors-General Conference today (September 23):
Your Excellencies, identified delegates, women and gentlemen,
Hong Kong is among the least corrupt locations worldwide. Cash laundering stays a severe problem since of other types of monetary criminal offenses such as deceptiveness. The profits of monetary criminal activities, whatever they are, end up being the topic of cash laundering. In 2024, there was a 2.3-fold boost in the variety of individuals prosecuted for the offense of cash laundering compared to 2023, and 648 people were founded guilty of cash laundering offenses. We made an application for court orders to limit over HK$ 360 countless thought severe criminal activity profits under authorities examination. Our anti-corruption firm, the Independent Commission Against Corruption, likewise used to limit over HK$ 400 countless believed criminal activity earnings under examination. By the end of 2024, around HK$ 2 billion stayed restrained.
To avoid and fight cash laundering successfully would need the co-ordination and co-operation amongst the public, the banks, the police and regulative bodies, the prosecution and likewise the judiciary. Even more, while cash laundering typically and generally includes funds in checking account, virtual possessions are now being utilized for such functions. I want to highlight current Hong Kong advancements in 4 locations, which pertain to “Combatting Money Laundering and Corruption, and Recovering Assets in the Technological Age”
Hindering members of public from functioning as cash mules
Making use of “mule accounts” prevails in cash laundering. “Mule accounts” describe accounts presumed of being offered or rented for laundering criminal activity profits, and cash mule is somebody who moves unlawful cash on behalf of others. The function of utilizing mule accounts is to make it harder to trace the funds, and to recognize and prosecute the real lawbreakers devoting the underlying offenses. We utilize 2 primary methods to prevent individuals from functioning as cash mules.
Public education. In April 2025, it was revealed that the Hong Kong Monetary Authority (HKMA), the Hong Kong Police Force (HKPF) and the banking market will enhance promotion and education efforts to distribute messages to clients concerning “Don’t Lend/Sell Your Account” consisting of outreach activities to targeted sectors, and improve market co-ordination through the development of the Anti-fraud Education Taskforce by the Hong Kong Association of Banks (HKAB) consisting of 18 significant banks. The function is to advise and caution individuals that they must not be lured by fast cash and provide or offer their savings account to anybody laundering cash; otherwise, they risk of being founded guilty of cash laundering offenses.
Second, much heavier charges. The HKPF would use to the Court for improved sentencing, particularly, to enforce a more serious charge, in cash laundering cases in order to produce a more powerful deterrent impact. By early April 2025, the sentences of 95 mule account holders had actually been increased by 13 percent to 33 percent, with sentences varying from 21 to 75 months of jail time. In a really current District Court case, HKSAR v Luo Jiayou [2025] HKDC 1334, chose August 5, 2025, the cash mule opened 3 checking account for his good friend and got RMB4,000 as a benefit; the overall amount gotten by the 3 savings account was HK$ 9 million odd. The prosecution made an application for an improved sentence pursuant to particular arrangements in the Organized and Serious Crimes Ordinance (Cap.455). The Court held that: initially, there is clear and sound proof that cash laundering utilizing savings account opened by “ML Stooges” is still prevalent and frequently being practiced in Hong Kong today; 2nd, what real crooks require are gullible scapegoats like the offender because case who would answer for them when the police does something about it; 3rd, the court should send out a clear message to the public that individuals who play the function of “ML Stooge” will get serious penalty, so that there is a deterrent result; and when there are less or no ready “ML Stooges”the criminal activities which depend on their checking account would stop working. At the end, the Judge increased the initial sentence of 40 months by 25 percent to 50 months.
Needing and empowering bank and other organizations to spot and after that report suspicious deals
Banks are on the frontline of worldwide efforts versus cash laundering. This is always so due to the fact that the targeted funds travel through their hands and usually just banks are placed to find and scrutinise suspicious deals. Just they know their consumers and their banking activities. Appropriately, our statutory and regulative guidelines (for instance, the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615)) need banks to have in location a working system to perform consumer due diligence; to preserve constant tracking of client accounts; to examine suspicious deals; to stop handling the account holders and to freeze the funds where suspicions are unsolved; and to report suspicions to the Police. There are 4 points I want to make worrying our efforts to guarantee compliance of these commitments on the part of the pertinent organizations and to boost their abilities to do so.
(i) Strict enforcement of legal and regulative tasks
In case of conflict of the pertinent legal and regulative responsibilities, apart from possible criminal liabilities, the bank in concern might go through disciplinary actions leading to reputational damage. As an example, on July 22, 2025, the HKMA revealed that it had actually taken disciplinary actions versus 3 banks under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance: the charges consisted of a reprimand; an order to carry out a look-back evaluation of previous deals, and establish and execute a therapeutic strategy to deal with the breaches; and budgeting charges. These are extremely extraordinary cases since banks in Hong Kong take compliance concerns seriously. In the very first 8 months of 2025, over 120 000 suspicious deals were flagged by the monetary sector and experts.
(ii) Use of expert system
On September 9, 2024, the HKMA released a circular on using Artificial Intelligence for Monitoring of Suspicious Activities. It is taking numerous efforts to more assistance and speed up using expert system in suspicious activity tracking: to provide 2 examples, initially, sharing experience and success stories of AI by arranging experience sharing online forums with speakers from the market and innovation companies; and, 2nd, offering targeted assistance and assistance by a devoted group with an external expert.
(iii) Enabling details sharing amongst banks
Among the difficulties of fighting money-laundering is the “information gap” made use of by lawbreakers to quickly move and hide illegal funds through the banking system, due to the fact that banks that discover illegal activities can not signal other banks owing to legal and typical law privacy commitments and statutory information personal privacy requirements. In June 2023, the HKMA, the HKPF and the HKAB collectively introduced the Financial Intelligence Evaluation Tool to enable quick sharing of details on business accounts amongst 10 taking part monetary organizations. About 90 per cent of mule accounts included in fraud-related cash laundering activities are in fact specific accounts, rather than business accounts.
To plug this loophole, on June 4 this year, the Banking (Amendment) Ordinance 2025 was passed, and it will enter impact on a date later on this year to be revealed. The brand-new law supplies authorised banks with a voluntary sharing system to demand or divulge info on the detection or avoidance of criminal activities whether the account holders worried are business or specific. The law makes safe harbour arrangements for organizations revealing details under the voluntary system or utilizing details so divulged by other organizations so that they will be immune from prospective prosecution or civil liability for breach of self-confidence.
(iv) Extending legal and regulative requirements to virtual possessions
A brand-new licensing routine for Virtual Asset Trading Platforms (VATPs) worked back on June 1, 2023, that included the entering into impact of the Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Ordinance 2022 (Cap. 615). Among the functions of the statutory change was to use client due diligence and record-keeping requirements to virtual property company. Pursuant to the statutory change, the Securities and Futures Commission (SFC), accountable for monitoring the VATPS, has actually released the Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (For Licensed Corporations and SFC-licensed Virtual Asset Service Providers).
Stopping dissipation of funds in cash laundering
Upon detection of presumed cash laundering, the crucial thing is to stop the funds or residential or commercial property in concern from additional dissipation as quickly as practicable. This is vital in order to allow the victims to recuperate the possessions upon the conclusion of the appropriate legal procedures. In Hong Kong, where a bank has actually determined believed deals, it is required to send a Suspicious Transaction Report to the Joint Financial Intelligence Unit (JFIU), which is run mostly by the HKPF and the Customs and Excise Department. At the exact same time, the bank will freeze the account provisionally. The JFIU will choose within 2 working days whether the bank need to get grant handle the funds in concern. If authorization is offered due to unverified suspicion, the JFIU will release a Consent Letter to the bank which will allow it to deal legally with the funds.
If there are excellent factors for suspicion needing more examination, the JFIU will provide a Letter of No Consent (LNC) to the bank, which usually will continue to freeze the account. The LNC is normally legitimate for 6 months. When the LNC is in force, the JFIU will utilize its finest endeavours to acquire a restraint order from the Court under the Organized and Serious Crimes Ordinance or acquire the victim to look for an injunction from the Court to officially freeze the funds in the bank. It is most considerable that, on April 10, 2024, the Court of Final Appeal of HKSAR in Tam Sze Leung and others v Commissioner of Police [2024] HKCFA 8 verified that the plan of releasing LNCs is legal and constitutional and does not infringe the right to residential or commercial property and other rights secured by our Basic Law.
It needs to be kept in mind that LNCs have actually been provided not just versus funds in savings account however likewise virtual properties. In a case chose back in 2021, Yan Yu Ying v Leung Wing Hei [2021] HKCFI 3160, the HKPF had actually provided LNC to virtual property company to avoid the dissipation of 999 Bitcoins. In a more current case HKSAR v. Tam Lai Yin [2025] HKCFI 2116, the Police took or froze the tainted cryptocurrency with a cold wallet to avoid dissipation.
It is similarly crucial to keep in mind that the victim might likewise obtain injunctions in civil actions to limit the more dissipation of the pertinent funds. This is especially helpful when, for whatever factors, the Police is not able, or no longer able, to freeze the funds in concern. In such occasion, the Police would normally notify the victim and recommend him to take civil procedures to secure his position. As an example, in a current case picked August 28, 2025, Shan Jau Chan and another v. Yuloong Trading Co Ltd and others [2025] HKCFI 3888, upon an application by the victim of a cyber-fraud, the Court gave an interim injunction to limit dissipation of the funds in concern when the Police showed that they might no longer keep the LNC upon legal suggestions.
The Court has actually embraced numerous ingenious procedures, most likely to be amongst the very first worldwide, in helping victims when the home included cryptocurrencies. As example, in a current case chose in April 2025, BP SG Investment Holding Limited v. Chen Shanxian and others (HCA 533/2025), the scammer moved possessions of the victim into non-custodial cryptocurrency wallets. Non-custodial wallets are confidential, decentralised and non-regulated; and for that reason, it is nearly difficult to recognize the individuals behind such wallets who committed the appropriate deceptive deals. This likewise makes it challenging to perform efficient service of the court files on the offenders, such as an injunction order, which is typically necessary in civil procedures. To fix this useful trouble, the Court allowed the injunction order to be served to start with, through a tokenised injunction order, second of all, through a messaging platform in between virtual property wallets, and third, through airdropping a non-fungible token (typically referred to as NFT) including a link to the court order. Putting aside the technicalities included, these techniques of service efficiently “taint” the appropriate wallets in the sense that all subsequent deals that follow the service can be traced to the blockchain and the presence of the injunction can be seen, efficiently preventing others from negotiating with these wallets. The Court purchased the transfer of the presumed scams profits to a custodial wallet to be held in escrow by a cryptocurrency custodian pending the last result of the case. These plans guaranteed the reliable conservation of virtual properties.
Enhancing prosecution’s ability to manage technological criminal offenses
Enhancing our prosecutorial ability to handle technological criminal activities is, naturally, essential. To this end, in 2023, the Department of Justice established the Technology Crime Sub-division under the Prosecutions Division. This department makes up counsel with specialised understanding and built-up experience in prosecuting advanced and syndicated innovation criminal activity cases. Their tasks likewise consist of supplying legal suggestions to police, active participation in brand-new legislation on cybersecurity and innovation criminal activities, and exchange of understanding and experience in fighting innovation criminal offenses with police and other stakeholders.
What I stated above are simply examples and highlights, however I think they act as sound proof that Hong Kong will undoubtedly spare no effort in avoiding and fighting cash laundering and corruption, and recuperating properties in the technological age. We likewise eagerly anticipate enhancing our partnerships with other jurisdictions, including naturally member states of ASEAN, in this regard. Thank you quite.