Hong Kong. Photo: VCG

Hong Kong's framework for fighting money laundering and its specific anti-money laundering efforts are in compliance with international standards, a spokesperson with the Hong Kong Monetary Authority (HKMA) said on Monday, after local police revealed ex-lawmaker Ted Hui Chi-fung is being investigated for money laundering.

The roles of HKMA and law enforcement agencies in combating money laundering are clearly defined, and their practices are in line with those in other international financial hubs, the HKMA spokesperson told the Global Times. 

Law enforcement agencies are tasked with criminal investigations, tracing, restricting and confiscating related money or assets, according to laws and rules, while HKMA supervises banks' legal and regulatory compliance in regards to customer due diligence and keeping of records, according to the spokesperson.

The authority's remarks came after the Hong Kong Police Force (HKPF) confirmed to the Global Times on Sunday that Hui is suspected of embezzling crowdfunding money from his relatives' accounts, and is being investigated for money laundering. 

The former Hong Kong opposition figure is also suspected of colluding with a foreign power to endanger national security, and the HKPF ordered the funds in his account, about HK$850,000 ($109,700), frozen.

Hui, who fled to the UK on Friday after a visit to Denmark while on bail, claimed Saturday that at least five accounts at HSBC, Hang Seng Bank and Bank of China (Hong Kong) containing millions of Hong Kong dollars, belonging to him and his family members, have "apparently been frozen." 

He took to Facebook to complain on Sunday that the freezing of his bank accounts severely undermines the credibility of Hong Kong's banking and financial system. 

The freezing of money or assets related to local or overseas criminal investigations is done in accordance with laws and regulations by law enforcement agencies including Hong Kong police, customs, and the Independent Commission Against Corruption, along with the city's Department of Justice, while financial institutions are required to coordinate with the law enforcement agencies, the HKMA spokesperson noted. 

"Hong Kong's status as an international financial center indeed depends on its long-established and effective anti-money laundering regime," Wu Yingpeng, a Hong Kong-based lawyer told the Global Times on Monday.

If a bank account is used in the commission of a crime or used to deposit criminal proceeds, law enforcement agencies such as the Joint Financial Intelligence Unit are authorized by law to freeze the account and conduct a criminal investigation, according to the lawyer. 

"If the person whose account has been frozen believes that the police action to freeze the account is wrong, he or she can apply for an unfreezing or judicial review," Wu said.

The monetary authority doesn't get involved in criminal investigations and doesn't have the power to freeze money or assets, and did not provide guidance regarding freezing customers' bank accounts, according to HKMA.

Declining to comment on issues involving individual bank accounts, the HKMA spokesperson said, "we have taken note that banks have previously clarified that there's a discrepancy between relevant reports, rumors and the truth."

"We apologize we cannot comment on matters regarding individual accounts. As a regulated authorized institution, we have to abide by the laws of the jurisdiction in which we operate," a spokesperson for Hang Seng Bank told the Global Times on Monday.

An HSBC spokesperson said Sunday the bank must abide by the laws of its jurisdictions. "Generally speaking, when banks are made aware of negative news in the market, they will enhance due diligence on the relevant accounts as part of their responsibility."

Bank of China (Hong Kong) didn't respond to a request for comment as of press time.