Hong Kong Country Summary
Sanctions
Medium Concern
FATF AML Deficient List
Low Concern
Terrorism
Low Concern
Corruption
Low Concern
US State ML Assessment
High Concern
Criminal Markets (GI Index)
Medium Concern
EU Tax Blacklist
Low Concern
Offshore Finance Center
High Concern
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 imposed by the United Nations, which aim to maintain international peace and security through various measures. Since 1966, the UN Security Council has established 31 sanctions regimes, which include economic sanctions, arms embargoes, and travel bans, with a focus on protecting the rights of those targeted.
Currently, there are no international sanctions against Hong Kong, but the US has suspended preferential treatment due to national security concerns. The UK has imposed an arms embargo on Hong Kong, extending restrictions on military items in response to the National Security Law.
Criminality
Rating |
0 (bad) - 100 (good) |
|---|---|
| Transparency International Corruption Index | 74 |
| World Bank: Control of Corruption Percentile Rank | 93 |
Mainland China ratified the United Nations Convention Against Corruption in 2006, which also applies to Hong Kong, where the Independent Commission Against Corruption (ICAC) plays a key role in combating corruption. The ICAC is involved in international anti-corruption efforts and has established the Hong Kong International Academy Against Corruption to provide training. U.S. firms do not view corruption as a barrier to foreign direct investment, and bribery is strictly penalized under the law.
Economy
Hong Kong is a highly open economy characterized by a free market philosophy, with the service sector contributing over 90 percent to its GDP in 2023. Despite facing challenges such as the imposition of the National Security Law, which has introduced uncertainty for businesses, Hong Kong remains an attractive destination for foreign investment, particularly in sectors like financial services, logistics, and technology. The region's regulatory environment is generally favorable, allowing for equal treatment of foreign and local investments, although recent legal changes have raised concerns about judicial independence and the overall business climate.
Hong Kong maintains a highly open investment climate, welcoming foreign direct investment (FDI) without discrimination against foreign investors. However, recent legislative changes, particularly the imposition of the National Security Law and the Safeguarding National Security Ordinance, have introduced significant uncertainties and risks for businesses, affecting their operations and the overall investment environment. Despite these challenges, Hong Kong continues to be a major hub for international business, supported by its advanced regulatory systems and competitive sectors.
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- Risk Analysis
- Corruption
- Economy
- Sanctions
- Narcotics
- Executive Summaries
- Investment Climates
- FATF Status
- Compliance
- Key Findings