Or if I may put this another way, do we even have a consistent view on what “success” in AML work would or should look like? Before I even try to address that, let’s be clear that I do not proclaim to have all the answers here, and I do believe that many of you are better qualified that I am in analysing and addressing these questions about effectiveness of AML efforts. 8. Furthermore, while we work to the same standards in the region, our systems are all evolving, and we have to admit that this evolution is happening at different pace in our respective markets and to address differing risks. And therefore the priorities in different markets will understandably differ, thereby making arriving at a consistent view on the question of “effectiveness” extremely challenging. I would also note that the Financial Action Task Force will do that job for Hong Kong later this year when they conduct the mutual evaluation exercise, while in roughly the same period, they and the IMF also assess other jurisdictions in the region. 9. Despite the fact that I do not have all the answers to the “effectiveness” questions, I think that it may be helpful to talk about some of the issues that arise out of those questions and try to relate them to the agenda for the conference. I hope this would help you to start thinking about some of the complex issues that you would be debating throughout this Conference. 10.
Hong Kong, as an international financial centre with a highly externally-oriented economy, does face high ML/TF risks. Our competitive advantages here – namely, free flows of capital, people, goods and information; well-established legal system; sophisticated market infrastructure; and advanced professional services – also make our market attractive for criminals seeking to hide or move funds or evade financial sanctions. With such a risk profile, Hong Kong has a key role in that fight against attempts to abuse our systems, along with our regional partners who share many of these characteristics and fund flows. So this Conference – focusing on the regional response - is timely and very relevant. 11. Over the years, the regulatory landscape has changed. Since we started this line of work in the 90’s, we have seen a steady increase in the regulatory requirements and expectations we place on our financial institutions to combat ML/TF. More recently, the number of sectors and institutions which come within the regulatory remit also continues to grow. These are far from simple requirements however you look at them, particularly given the risk-based approach, a view which is supported by the experience of many financial institutions who have struggled getting it right. 12. The world of banking and finance has also changed significantly in the same period we have been applying these requirements. For example, technology has created new and significant opportunities for the development of the global economy, which has been good news for financial centres such as Hong Kong.