The rapid technological development is often thought to be a double-edged sword. Utilizing new technologies and the fast-changing internet landscape, evolving fraudulent tactics have become increasingly difficult to guard against. The number of fraud cases in Hong Kong surged from 19,249 in 2021 to 44,480 last year. In 2024, 1,484 individuals were charged with money laundering, about 70 percent of whom were holders of “mule accounts”.
The escalating crime wave poses a serious threat to the security of personal property. To step up the effort in effectively combating fraud, it is of great importance for the Hong Kong Special Administrative Region government to scrutinize the relevant legal framework, particularly those governing bank accounts, in addition to strengthening law enforcement and enhancing public awareness through anti-scam campaigns.
To be specific, law enforcement agencies currently face a high prosecution threshold when tackling fraud and money laundering crimes. Under the Organized and Serious Crimes Ordinance (Cap.455), prosecutors must prove “mule account” holders knew or had reasonable grounds to believe that the funds were proceeds of an indictable offense, thereby meeting the standard of an “irresistible inference”. This burden and standard of proof forces law enforcement to expend significant resources investigating fund flows, suspects’ intent and financial backgrounds. As such, the high legal threshold in turn delays investigations and often fails to secure convictions.
Nonetheless, the government has recently achieved a breakthrough in enhancing measures for the detection and interception of illicit funds. On April 2, the Banking (Amendment) Bill 2025 was formally introduced to the Legislative Council for its first reading. The amendment introduces a voluntary mechanism to expand the scope of the interbank information-sharing platform — the Financial Intelligence Evaluation Sharing Tool (FINEST) — from corporate accounts to personal accounts, allowing banks to exchange personal-account information for crime prevention and detection.
According to government estimates, as of October, about 90 percent of accounts used for fraud-related money laundering were held by individuals. The core significance of the amendment thus lies in precisely targeting this vulnerability, as financial institutions could not effectively share information when illicit funds were rapidly transferred among multiple banks before the proposed amendment. Upon detecting suspicious activities, banks have to follow standard procedures by reporting to the police and awaiting instructions (namely, “consent” or “no consent”), often resulting in prolonged delays in tracing funds and missing the critical window to freeze accounts and intercept funds. Following the proposed amendment, personal accounts will also be covered under FINEST, enabling banks to take on a more proactive stance in preventing crime.
Expedite further legislation to crack down on ‘mule accounts’
Despite the government’s decision to adopt a “ready one, launch one” approach following the author’s persistent appeals in Legislative Council and Financial Affairs panel meetings, there is still room for Hong Kong to level up its crackdown on “mule accounts” through further legislation. Prominent examples are the Chinese mainland and Singapore, which have adopted more direct and pragmatic approaches. Under laws on the mainland, “lending/renting out a bank account and receiving at least 3,000 yuan ($411) in fraudulent funds” constitutes a crime. Meanwhile, under laws in Singapore, a person can be held liable when the value of the property he or she dealt with is disproportionate to his or her sources of income; or when he or she allowed another person or people to access, operate, or control his or her account without seeking the purpose of such arrangement; or he or she received or transferred money without seeking the source or destination of the money.
These jurisdictions provide good reference for Hong Kong’s legislation. For this purpose, the author strongly urges the government to expedite study on this legislative approach to further combat bank account fraud.
On April 10, the Hong Kong Monetary Authority, the Hong Kong Police Force, and the Hong Kong Association of Banks jointly announced five measures to strengthen the response to fraud and money laundering, with enabling “bank-to-bank information sharing” being listed as a major measure to reinforce protection for customers. It is, therefore, of great anticipation that the proposed amendment to the Banking Ordinance will be passed swiftly to step up the anti-fraud legislative effort. Upon the amendment, the voluntary mechanism encourages more banks to collectively accelerate Hong Kong’s development of a modern, end-to-end anti-fraud framework covering “prevention, detection, interception, enforcement, and punishment” to better safeguard personal property.
The author is a member of the Legislative Council from the Election Committee Constituency.
The views do not necessarily reflect those of China Daily.
