Hong Kong Country Summary
Sanctions
No
FATF AML Deficient List
No
Terrorism
Corruption
US State ML Assessment
Criminal Markets (GI Index)
EU Tax Blacklist
Offshore Finance Center
Please note that although the below Summary will give a general outline of the AML risks associated with the jurisdiction, if you are a Regulated entity then you may need to demonstrate that your Jurisdictional AML risk assessment has included a full assessment of the risk elements that have been identified as underpinning overall Country AML risk. To satisfy these requirements, we would recommend that you use our Subscription area.
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Anti Money Laundering
FATF Status
Hong Kong is not on the FATF List of Countries that have been identified as having strategic AML deficiencies
Compliance with FATF Recommendations
The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Hong Kong was undertaken in 2023. According to that Evaluation, Hong Kong was deemed Compliant for 11 and Largely Compliant for 25 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 6 of the Effectiveness & Technical Compliance ratings.
Sanctions
Hong Kong, as a UN member, must adhere to sanctions measures established by the United Nations to maintain international peace and security. The UN Security Council has implemented 31 sanctions regimes since 1966, which include economic sanctions and targeted measures like arms embargoes and travel bans. Currently, there are 15 ongoing sanctions regimes focusing on political conflicts, nuclear non-proliferation, and counter-terrorism, all managed by a sanctions committee.
While there are no international sanctions against Hong Kong, the US has suspended preferential treatment due to national security concerns. The UK has enforced an embargo on military items to mainland China since 1989 and extended this embargo to Hong Kong in July 2020, particularly in response to the National Security Law.
Bribery & Corruption
| Rating | 0 (bad) - 100 (good) |
|---|---|
| Transparency International Corruption Index | 75 |
| World Bank: Control of Corruption Percentile Rank | 92 |
Mainland China and Hong Kong have ratified the United Nations Convention Against Corruption, with Hong Kong's Independent Commission Against Corruption (ICAC) playing a key role in combating corruption and fostering an international anti-corruption community. The ICAC has also launched the Hong Kong International Academy Against Corruption to provide training for anti-corruption efforts globally. Notably, U.S. firms do not perceive corruption as a barrier to foreign direct investment, as bribery is criminalized and subject to severe penalties.
Economy
Hong Kong is a highly open economy with a strong emphasis on free market principles, characterized by a significant service sector that accounted for over 90% of its GDP in 2023. Despite its advanced regulatory systems and competitive sectors such as financial services and logistics, the imposition of the National Security Law has introduced uncertainties that have affected foreign direct investment and the operational environment for businesses. The U.S. has noted a decline in its foreign direct investment in Hong Kong, highlighting concerns over the erosion of autonomy and the potential risks for companies operating in the region.
Hong Kong maintains a highly open investment climate, characterized by a lack of discrimination against foreign investors and no restrictions on foreign ownership. However, recent legal changes, particularly the imposition of the National Security Law and the Safeguarding National Security Ordinance, have introduced significant uncertainties that may affect business operations and deter foreign investment. Despite these challenges, Hong Kong continues to be a major recipient of foreign direct investment, supported by its competitive sectors and favorable tax regime.
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- Risk Analysis
- Corruption
- Economy
- Sanctions
- Narcotics
- Executive Summaries
- Investment Climates
- FATF Status
- Compliance
- Key Findings
