Security and Investigations News

Security and Investigations News

Veriton Security

Veriton Security is a small but efficient organization based in Hong Kong specializing in Research & Investigations, Due Diligence, Personnel Screening and Security. We have a compact, motivated, multicultural and experienced team of the highest integrity and professionalism. Our top investigative team members have in excess of 120 years involvement in law enforcement, investigations, intelligence and analysis in Hong Kong and other parts of SE Asia. Apart from Hong Kong, we work with a network of professionals in China, Macau, Indonesia, Singapore and Vietnam.

Contact: Chris Wilson PMSM
Tel: +852 248 999 48

Politically Exposed Persons: When the Watchdog Gets it Wrong

Hong KongPosted by Chris Wilson Wed, June 17, 2015 16:04:36

If the Hong Kong Monetary Authority (HKMA) does not follow basic Due Diligence or Know Your Customer (KYC) practice, how can it set the standards for the rest of Hong Kong?

Earlier this month, the South China Morning Post (SCMP) reported on Hong Kong’s involvement in the FIFA debacle when it was alleged that Costas Takkas – a senior FIFA official – moved US$1.2M of bribes through an HSBC bank account using a Hong Kong registered company. According to the SCMP, “sources confirmed that officials from soccer's governing bodies, such as FIFA, were not considered what are known as ‘politically exposed persons [PEPs]’ under Hong Kong Monetary Authority guidelines”.

The Financial Action Task Force (FATF) issues guidelines on the definition of PEPs, the most recent being published in 2013. Included in the FATF list of PEP definitions is International Organisation PEPs namely “persons who are or have been entrusted with a prominent function by an international organisation [with specific reference] to members of senior management or individuals who have been entrusted with equivalent functions, i.e. directors, deputy directors and members of the board or equivalent functions.”

The real question is why the HKMA did not pick up that senior FIFA officials are PEPs especially given the number of scandals involving FIFA corruption over recent years? The HKMA website states its main functions are: “…helping to maintain Hong Kong's status as an international financial centre”. If the city and its banking watchdog are seen not to be upholding anti-money laundering procedures, then things can only go downhill.

Any research organization worth its salt that specialises in Due Diligence or KYC would have undoubtedly flagged a senior FIFA official whose name turned up in a bank application. Perhaps HSBC needed to pick up where the HKMA left off?

The full SCMP article, referenced above, was published on 05 JUN 2015.

  • Comments(2)//