Hong Kong’s financial crime framework is predominantly statutory. The key offences applicable to companies and their directors and officers are as follows.

Fraud and dishonesty. Fraud contrary to section 16A of the Theft Ordinance (Cap. 210) (“TO”) carries a maximum of 14 years’ imprisonment. False accounting contrary to section 19 of the TO is punishable by up to 10 years’ imprisonment on conviction on indictment. Conspiracy to defraud is a common law offence, with a maximum penalty of 14 years’ imprisonment under section 159C(6) of the Crimes Ordinance (Cap. 200).

Money laundering. Dealing with property known or believed to represent the proceeds of an indictable offence is an offence under section 25 of the Organized and Serious Crimes Ordinance (Cap. 455) (“OSCO”). It carries a maximum fine of HK$5 million and 14 years’ imprisonment upon indictment. The OSCO also imposes a duty to disclose knowledge or suspicion of property representing proceeds of an indictable offence (section 25A(1)) and criminalises “tipping off” ( section 25A(5)).

Corruption. The Prevention of Bribery Ordinance (Cap. 201) (“POBO”) is enforced by the Independent Commission Against Corruption (“ICAC”). Section 4 targets bribery of public servants, section 8 the offering of advantages to public servants by persons having dealings of any kind with government departments or public bodies, and section 9 bribery in the private sector (advantages offered to or solicited by an “agent”, which includes an employee or director). The maximum penalty for offences under sections 4, 8 and 9 is a fine of HK$500,000 and 7 years’ imprisonment.

Market misconduct. The Securities and Futures Ordinance (Cap. 571) (“SFO”) prohibits insider dealing, false trading, price rigging, disclosure of information about prohibited transactions, disclosure of false or misleading information inducing transactions, and stock market manipulation. The regime allows for dual-track enforcement: civil proceedings before the Market Misconduct Tribunal (“MMT”) or criminal prosecution, in which case the offences carry a maximum fine of HK$10 million and 10 years’ imprisonment on conviction on indictment.

Tax evasion. Willful evasion of tax under section 82 of the Inland Revenue Ordinance (Cap. 112) (“IRO”) is punishable on indictment by a fine of HK$50,000, a further fine of three times the amount of tax evaded, and three years’ imprisonment. The Inland Revenue Department (“IRD”) may also impose substantial additional tax administratively.

Sanctions. United Nations Security Council sanctions are implemented through the United Nations Sanctions Ordinance (Cap. 537) and regulations made thereunder, the penalties for which vary by regulation. Terrorist financing is criminalised by the United Nations (Anti-Terrorism Measures) Ordinance (Cap. 575), which carries a maximum penalty of a fine and 14 years’ imprisonment on conviction on indictment.

Most of these offences apply to companies and individuals alike, with corporate liability determined by the rules of attribution described in Question 2. Certain offences are personal in nature (for example, section 9 of the POBO is directed at individual agents, although a company may be implicated as a principal or through its officers).

Yes. Companies in Hong Kong can be held criminally liable, but attribution of liability is generally determined by the common law identification doctrine rather than any statutory code of corporate fault.

A company is criminally responsible for the acts and mental state of the natural persons who represent its “directing mind and will”, ordinarily the board of directors, the managing director, or other senior officers who exercise governing authority on the company’s behalf. The leading authority, Tesco Supermarkets Ltd v Nattrass [1972] AC 153, is applied in Hong Kong: the acts of subordinate employees are not automatically attributed to the company, and the question in each case is whether the individual in question exercised the powers of management entrusted to him, so that his act and mind can be treated as the act and mind of the company itself.

The Privy Council’s decision in Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500 refined the analysis. Attribution is not governed by a single universal rule. Instead, the court asks whose act (or knowledge) is, as a matter of interpretation of the particular rule imposing liability, to count as the act of the company. For statutory offences, the answer depends on the construction and purpose of the legislation. Many statutes expressly impose liability on corporations, and provisions commonly extend liability to officers who consented to, connived in, or neglected the commission of the offence.

Two practical consequences follow. First, Hong Kong has no “failure to prevent” style corporate offence of the kind found in section 7 of the United Kingdom’s Bribery Act 2010, and no equivalent of the UK’s corporate failure to prevent fraud offence. Second, because the attribution under the identification doctrine is difficult to satisfy in large organisations whose culpable conduct is dispersed among middle management, prosecutions of companies for offences requiring mens rea are comparatively less common and enforcement tends to target individuals. Where a company is convicted, it is liable to a fine, and may also face confiscation and restraint proceedings, regulatory discipline, and civil claims.

Directors and officers face personal criminal liability across several statutes.

Under section 9 of the POBO, a director or employee is an “agent” who commits an offence by soliciting or accepting an advantage in connection with the principal’s affairs or business without lawful authority or reasonable excuse. The offering of an advantage to an agent is separately criminalised under section 9(2) of the POBO. This is one of the most commonly prosecuted corruption offences in the private sector and has been applied to directors, managers, procurement staff and bank employees and others.

Under section 19 of the TO, an officer who dishonestly falsifies, destroies, defaces or conceals accounts or documents with a view to gain for himself or another, or with intent to deceive, commits false accounting, punishable by up to 10 years’ imprisonment. Under section 20 of the TO, a director, manager, secretary or other similar officer may also be personally liable where an offence committed by a body corporate under section 19 is proved to have been committed with his or her consent or connivance. Directors are therefore frequently charged with this offence alongside fraud (section 16A) or common law conspiracy to defraud.

Under section 275 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32), in the course of a winding up, officers who are knowingly parties to carrying on the company’s business with intent to defraud creditors commit fraudulent trading, which carries an unlimited fine and five years’ imprisonment on conviction on indictment by virtue of the Twelfth Schedule.

Directors and officers of listed corporations are exposed to criminal liability under the SFO for insider dealing, false trading, price rigging and related market misconduct (maximum fine of HK$10 million and ten years’ imprisonment), and for giving false or misleading information to the Securities and Futures Commission (“SFC”), with the maximum fine of HK$1 million and 2 years’ imprisonment. Officers of banks and other regulated institutions may additionally face criminal sanctions under the Banking Ordinance (Cap. 155) (“BO”) and the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) (“AMLO”).

Beyond imprisonment and fines, personal consequences include confiscation orders under the OSCO, potential civil liability for breach of statutory duties under the Companies Ordinance (Cap. 622) (“CO”), and disqualification from acting as a director for up to 15 years under sections 168D and 168H of Cap. 32. For those employed in the public sector, the common law offence of misconduct in public office is also relevant.

The Department of Justice (“DOJ”) is the principal authority responsible for the prosecution of criminal offences in Hong Kong, a position protected by Article 63 of the Basic Law. The DOJ’s Prosecutions Division makes charging decisions and conducts trials; the Secretary for Justice acts independently. Investigation, however, is carried out by a number of specialist agencies.

The ICAC investigates corruption and related offences under the POBO and the ICAC Ordinance (Cap. 204), covering both the public and private sectors. It has extensive powers of arrest, search and compulsory production, and receives complaints from the general public.

The SFC investigates market misconduct, breaches by intermediaries, and corporate misconduct affecting the securities and futures markets. It may refer indictable offences to the DOJ, prosecute certain offences summarily before a magistrate, bring civil proceedings before the MMT, and institute disqualification and restitution proceedings in the High Court.

The Hong Kong Monetary Authority (“HKMA”) supervises authorised institutions’ compliance with AMLO and the HKMA’s Anti-Money Laundering and Counter-Financing of Terrorism Guideline (“AML/CFT Guideline”). The AML/CFT Guideline sets out the AML/CFT requirements and standards expected of authorised institutions, including requirements concerning risk assessment, customer due diligence, ongoing transaction monitoring, suspicious transaction reporting, sanctions screening, internal controls and senior management oversight. Compliance is enforced through the AMLO and the BO, and authorised institutions may face disciplinary or other regulatory action (e.g., public reprimands and pecuniary penalties) for non-compliance. In determining the appropriate disciplinary action, the HKMA considers the relevant circumstances of the case, including but not limited to the seriousness of the investigation findings, the need for deterrence, the institution’s cooperation, remedial measures and its previous disciplinary record. For example, the HKMA took disciplinary action against Fubon Bank (Hong Kong) Limited in November 2024 and imposed a HK$4 million pecuniary penalty under section 21(2)(c) of the AMLO. The deficiencies included failures concerning customer due diligence, transaction monitoring and the ongoing monitoring of customer relationships.

The Joint Financial Intelligence Unit (“JFIU”), run jointly by the Hong Kong Police Force and the Customs and Excise Department, receives and analyses suspicious transaction reports and disseminates them to appropriate law enforcement agencies or financial intelligence units for investigations. The Police investigate fraud through specialist units including the Regional Crime Squads and the Anti-Deception Coordination Centre; the Customs investigates trade-based money laundering and enforces the AMLO requirements for money service operators and dealers in precious metals and stones.

The IRD investigates tax evasion. The Accounting and Financial Reporting Council (“AFRC”), since 2022, regulates and disciplines auditors of public interest entities under the AFRC Ordinance (Cap. 588). The Companies Registry handles certain offences under the CO. The Financial Services and the Treasury Bureau (“FSTB”) sets AML/CFT policy and coordinates Hong Kong’s engagement with the Financial Action Task Force (“FATF”).

The Commercial Crime Bureau (“CCB”) of the Police investigates complex commercial fraud, corporate asset stripping, and serious white-collar crime. It targets high-impact offences, such as listed company fraud, market manipulation, and investment schemes, using forensic accounting and digital analysis. The CCB collaborates closely with regulators like the SFC and the HKMA, international partners like INTERPOL, and the banking sector (via initiatives like the FINEST information-sharing platform) to track illicit fund flows, dismantle transnational fraud syndicates, and disrupt mule account networks.

Criminal cases in Hong Kong are heard at three levels of court, and the forum is determined by the gravity of the offence.

All criminal proceedings commence in the Magistrates’ Courts, which deal with summary offences and the early stages of indictable cases. Magistrates sit alone (there is no jury) and sentencing jurisdiction is generally limited to two years’ imprisonment for a single offence (three years for two or more indictable offences) and prescribed fines.

Indictable offences of intermediate gravity are tried in the District Court, where a judge sits alone and may impose up to seven years’ imprisonment. Many serious financial crime prosecutions, including money laundering and fraud cases, are heard at this level.

The most serious cases are tried in the Court of First Instance of the High Court before a judge and jury. The jury normally comprises seven jurors (which may be increased to nine in long or complex trials), and verdicts are reached by a majority of at least five to two. Jury trial is therefore confined to the CFI; neither the District Court nor the Magistrates’ Courts uses juries.

Market misconduct may alternatively be pursued through the MMT, a civil tribunal chaired by a judge or former judge of the High Court sitting with two members who are prominent members of Hong Kong’s business and professional community. The MMT applies the civil standard of proof and imposes sanctions (such as disgorgement of profits, disqualification orders, cease-and-desist orders and costs) rather than imprisonment. The SFC may refer matters for criminal prosecution or institute proceedings before the MMT.

Appeals from the Magistrates’ Courts lie to the CFI; appeals from the District Court and the CFI lie to the Court of Appeal and, ultimately, the Court of Final Appeal. The MMT determinations may be appealed to the Court of Appeal on questions of law, and with the leave of the Court of Appeal, on questions of fact.

Investigations are typically initiated following complaints (the ICAC’s principal intake), referrals from other authorities, exchanges, auditors or listed companies, suspicious transaction reports received by the JFIU, or the authority’s own surveillance of markets and intelligence work. Formal initiation does not require judicial approval, but the principal coercive powers do.

Dawn raids are an established investigative tool in serious financial crime cases. The ICAC, the SFC, the Police and the Customs all execute search warrants issued by magistrates or judges. Under section 191 of the SFO, for example, a magistrate may issue a warrant authorising the SFC to enter premises, search for and seize records and documents, and search persons found on the premises. Warrants are commonly executed at company offices, auditors’ premises and private residences, and seizures frequently include computers and mobile devices.

Compulsory production powers are equally important. Section 4 of the OSCO empowers a judge of the Court of First Instance to order the production of material reasonably believed to be relevant to a money laundering investigation. Sections 179 and 183 of the SFO enable the SFC to require the production of records and documents, written answers, and assistance. The ICAC Ordinance (sections 13 and 14) confers comparable powers on the ICAC in corruption investigations. Non-compliance with production notices and orders is itself a criminal offence.

Authorities also deploy asset-freezing measures at an early stage. Under the “letter of no consent” regime in section 25A of the OSCO, the withholding of consent to deal with suspected proceeds operates as a de facto freeze on bank accounts. The DOJ may apply to the CFI for restraint orders over realisable property under the OSCO to preserve assets pending confiscation. Interception of communications in serious cases requires judicial authorisation under the Interception of Communications and Surveillance Ordinance (Cap. 589).

The position differs between the ICAC, SFC and the Police.ICAC. Under section 13 of the ICAC Ordinance and section 14 of the POBO, the ICAC may require persons suspected of corruption offences, and persons believed to have relevant information, to attend for interview and to provide information. Suspects are interviewed under caution. The ICAC’s published guidance confirms that a suspect may seek legal advice, that consultations with a lawyer take place without ICAC officers present, and that a suspect may request to be interviewed in the presence of his lawyer. Interviews are recorded and a copy of the record is normally provided to the person interviewed. Under section 17A of the POBO, the Commissioner of ICAC may, on ex parte application to the magistrate, require a person who is the subject of an ICAC investigation of an offence under that Ordinance to surrender any travel document in his possession.

SFC. Under section 183 of the SFO, an investigator appointed under section 182 may require any person to attend at a specified time and place to answer questions, to produce records or documents, and to give all reasonable assistance. Failure to attend or to answer without reasonable excuse is a criminal offence under section 184 of the SFO. There is no right to silence in SFC interviews: the statutory duty to answer overrides it. However, the privilege against self-incrimination is preserved in modified form under section 187 of the SFO — an interviewee must answer, but may claim that the answer may incriminate him, in which case the answer is not admissible against him in subsequent criminal proceedings (except for offences of giving false evidence or making false statements). Derivative evidence obtained as a result of the answer remains admissible. In practice, the SFC permits interviewees to consult with and be accompanied by legal advisers, and interview notices state the subject matter of the investigation only at a high level.

Police. Suspects interviewed by the Police are cautioned and retain the common law right to silence; statements are given voluntarily and interviews are video-recorded or recorded in written statements in accordance with the Secretary for Justice’s guidelines and the Rules and Directions on the Questioning of Suspects and the Taking of Statements.

The position varies by authority.

Legal representation. The ICAC suspects may consult privately with a lawyer and may request that the interview be conducted in the lawyer’s presence. SFC interviewees may in practice consult with and be accompanied by legal counsel during interviews; while not framed as an absolute statutory right, the SFC routinely accommodates legal attendance, subject to its power to control the process. Persons interviewed by the Police are entitled to consult a lawyer, and a person in police detention is entitled to seek legal advice.

Right to silence. Suspects interviewed by the Police or the ICAC enjoy the common law right to silence; adverse inferences from silence at trial are restricted. In SFC interviews under section 183 of the SFO, by contrast, there is no right to refuse to answer. The protection instead takes the form of the privilege against self-incrimination: the interviewee must answer but may claim the privilege, and a claimed answer is inadmissible against him in criminal proceedings, save for offences of giving false evidence or making false statements. The privilege does not protect pre-existing documents, which must be produced, and it does not extend to disciplinary proceedings before the MMT or to civil proceedings.

Pre-interview disclosure. There is no general right to pre-interview disclosure in criminal investigations. SFC interview notices identify the subject of the investigation at a high level but need not disclose the evidence. In practice, the SFC may supply some documents to facilitate the interview.

Recording. The ICAC and the Police interviews are recorded (audio or video), and a copy of the interview record is normally provided to the interviewee or his lawyer. SFC interviews are likewise recorded and transcribed; interviewees are entitled to obtain a copy of the record.

Corporate interviewees. Where a company is under investigation, its officers and employees may be interviewed in their personal capacity. The company itself cannot invoke the privilege against self-incrimination, and individuals cannot refuse to answer on the ground that the answer may incriminate the company.

Hong Kong’s criminal jurisdiction is primarily territorial, but several key financial crime statutes have significant extraterritorial reach.

Under section 4 of the POBO, bribery of Hong Kong public servants may be prosecuted even where the advantage is offered outside Hong Kong, and the conduct of a public servant employed in Hong Kong is deemed to occur in Hong Kong even if he acts outside the territory. Section 9 private-sector bribery applies where the agent acts in relation to his principal’s affairs in Hong Kong.

Under the OSCO, a person who deals with property in Hong Kong commits money laundering regardless of where the underlying conduct occurred, provided the conduct would constitute an indictable offence had it taken place in Hong Kong (section 25(4)). This provision routinely catches money laundering in Hong Kong of the proceeds of overseas frauds.

Market misconduct provisions of the SFO may apply to conduct whether engaged in within or outside Hong Kong, so long as the conduct relates to securities listed on a Hong Kong market or participants in the Hong Kong market. Insider dealing by directors and insiders of listed corporations is likewise prosecuted irrespective of where the dealing decisions are made.

The AMLO applies to financial institutions, including licensed corporations and virtual asset service providers carrying on business in Hong Kong. The United Nations (Anti-Terrorism Measures) Ordinance (Cap. 575) extends to conduct by Hong Kong permanent residents or a body incorporated or constituted under the law of Hong Kong outside the territory in certain respects under section 3. Where an agreement to defraud is made in Hong Kong, conspiracy to defraud is triable here even if the intended fraud is to be executed overseas.

By contrast, the IRO is strictly territorial (only Hong Kong-sourced income is chargeable), and fraud and theft offences require the relevant conduct to occur in Hong Kong. There is no Hong Kong equivalent of the broad nationality-based jurisdiction exercised by United States authorities.

Yes. International cooperation is a well-established feature of Hong Kong’s financial crime enforcement, operating through both treaty-based and informal channels.

Mutual legal assistance in criminal matters is governed by the Mutual Legal Assistance in Criminal Matters Ordinance (Cap. 525), which gives effect to Hong Kong’s bilateral mutual legal assistance agreements and provides a statutory mechanism for case-by-case assistance even in the absence of an agreement. Assistance extends to the taking of evidence, search and seizure, production of records, restraint and confiscation of proceeds of crime, and the transfer of persons in custody to give evidence. Requests are handled by the DOJ’s International Law Division.

Surrender of fugitive offenders is governed by the Fugitive Offenders Ordinance (Cap. 503) and Hong Kong’s bilateral surrender agreements (approximately 10 agreements are currently in force). There is no surrender agreement, and no mutual legal assistance agreement, with the Chinese Mainland — a long-standing gap given the volume of cross-border activity.

Regulatory cooperation is extensive. The JFIU exchanges financial intelligence with overseas financial intelligence units through the Egmont Group and bilateral memoranda of understanding. The SFC is a signatory to the IOSCO Multilateral Memorandum of Understanding and cooperates with overseas securities regulators on investigations, including with the China Securities Regulatory Commission under a bilateral memorandum. The HKMA cooperates with home and host supervisors of international banks. The ICAC maintains cooperation arrangements with anti-corruption agencies worldwide, and the Customs cooperates through the World Customs Organization framework.

Hong Kong’s fourth-round mutual evaluation by the FATF (published 4 September 2019) found that Hong Kong has a strong legal foundation and effective system, with particular strengths in law enforcement and asset recovery; a fifth-round evaluation is currently in progress.

Legal professional privilege (“LPP”) in Hong Kong comprises legal advice privilege and litigation privilege. It is a fundamental common law right, recognised by Article 35 of the Basic Law (which guarantees the right to confidential legal advice), and the courts generally afford it a high degree of protection, yielding only to express statutory abrogation (which is rare) or the crime-fraud exception.

The leading modern authority is CITIC Pacific Ltd v Secretary for Justice and Commissioner of Police [2015] HKCA 571, in which the Court of Appeal simplified and clarified the law. The court rejected the restrictive English approach in Three Rivers District Bank and Trustee Co Ltd v Governor and Company of the Bank of England (No 5) [2003] QB 1556, holding that for a corporation the “client” is simply the company itself; the practical question is which employees were authorised to act for the company in obtaining legal advice. The court adopted the “dominant purpose” test in relation to legal advice privilege: a document is privileged if it was created for the dominant purpose of obtaining legal advice, and the same rationale applies to litigation privilege. LPP extends to communications with in-house lawyers acting in their legal capacity.

In the financial crime context, LPP protects confidential lawyer-client communications and materials prepared for the dominant purpose of litigation or obtaining legal advice from production and seizure. Compulsory production powers under the SFO, the OSCO and the ICAC Ordinance are generally subject to LPP: a legal adviser cannot be compelled to disclose privileged communications, and privileged material seized in a search may not be used by the authority. In practice, disputes over seized material are resolved by sealing the disputed items for determination by the court, often with an independent lawyer appointed to screen them.

The privilege does not, however, extend to the following. Pre-existing documents do not acquire privilege merely because they are handed to a lawyer. The crime-fraud exception removes protection where legal advice is sought to facilitate an offence. Such privilege belongs to the client (the company), not to individual officers, so a company may waive it even where the waiver disadvantages its directors.

The Personal Data (Privacy) Ordinance (Cap. 486) (“PDPO”) and its six Data Protection Principles regulate the collection, use and retention of personal data, including by public authorities. In a financial crime investigation, however, privacy rights are substantially qualified.

Section 58 of the PDPO provides that personal data held for the purposes of the prevention or detection of crime, the apprehension, prosecution or detention of offenders, or the assessment or collection of tax are exempt from the use restrictions in Data Protection Principle 3 (use of data for new purpose) and Principle 6 (data access and correction) where the relevant use would be likely to prejudice those purposes. The exemption is broad enough to permit the use and sharing of investigatory material among the Police, the DOJ, the ICAC and the SFC, and to limit the data subject’s rights of access and correction during a live investigation. A data subject whose access request is refused on this ground may complain to the Privacy Commissioner for Personal Data, whose powers in such cases are limited to investigation and reporting.

Surveillance measures carry additional safeguards. Interception of communications and covert surveillance by law enforcement agencies require authorisation by a judge or panel judge under the Interception of Communications and Surveillance Ordinance (Cap. 589), with oversight by the Commissioner on Interception of Communications and Surveillance.

For companies under investigation, however, preservation notices, production orders and search warrants may require the company to collect and surrender employee and customer data, and data protection obligations do not furnish a defence to lawful compulsory process. Regulated institutions must also manage confidentiality obligations owed to customers (the duty of secrecy under the Banking Ordinance yields to lawful compulsion, and the AMLO reporting regime provides statutory protection for disclosing institutions). There is currently no general statutory restriction on cross-border data transfers in force, despite the mechanism under section 33 of the PDPO never having been brought into force and the SFC and HKMA’s expectation on intermediaries and banks to address data governance and overseas access issues in their systems of control.

Hong Kong has no general doctrine of successor criminal liability. Criminal liability attaches to the legal person that committed the offence, and it is not transferred merely by a change of ownership or control.

On a share acquisition, the target company remains the same legal person. Its existing criminal liability, including any ongoing investigation and prosecution, remains with the target. The purchaser therefore acquires the target together with its existing exposure, and in practice, the standard protections are forensic due diligence, representations and warranties, and indemnities in the transaction documents. On an asset acquisition, the purchaser generally does not assume the seller’s criminal liability merely by acquiring its assets — subject to the risk of being drawn into the investigation as a recipient of tainted assets, with attendant money laundering and restraint issues.

The court-free amalgamation regime in Part 13 of the CO provides that on amalgamation, the property, rights and liabilities of the amalgamating companies vest in the amalgamated company by operation of law, and pending proceedings may continue by or against it, and prior convictions or orders remain enforceable. This vesting provision is understood to address civil rights and liabilities; whether it extends to criminal liability or enables a prosecution to be started afresh against the amalgamated company for the predecessor’s offences has not been judicially determined and remains uncertain in the absence of express provision.

Regulatory consequences should also be considered. Changes in substantial shareholders of SFC-licensed corporations require prior approval, and the SFC assesses the fitness and propriety of the new controllers; similarly, HKMA approval is required for acquisitions of banks. These are not criminal liability mechanisms, but they give regulators a practical say in the consequences of mergers for past misconduct.

Charging decisions are made by the DOJ in accordance with the Prosecution Code, issued by the Secretary for Justice in 2013. The Code applies a two-stage test.

First, the evidence stage: prosecutors must be satisfied that there is sufficient admissible evidence to justify instituting or continuing proceedings, assessed by reference to whether there is a reasonable prospect of conviction. This is an objective evaluation of how a properly directed court or jury, applying the criminal standard, would be likely to view the evidence — including the credibility of witnesses and the availability of any defence. Where the evidence falls short, proceedings must not be started or continued, however serious the offence.

Second, the public interest stage: where the evidential threshold is met, the general public interest must require the prosecution to act. The Code lists factors including the gravity of the offence; the circumstances of the offence and the culpability, age, intelligence and physical or mental condition of the suspect; delay; criminal history; remorse, reparation and cooperation; the position of victims and witnesses; the likely outcome and the availability of adequate alternatives to prosecution; and the need for deterrence.

The Secretary for Justice acts independently in prosecutions under Article 63 of the Basic Law; the ICAC, the SFC and other agencies may refer cases to the DOJ but do not make charging decisions for indictable offences. The Code also addresses plea decisions and offers of immunity to accomplice witnesses, which require the Director of Public Prosecutions’ approval and are granted only where necessary in the interests of justice.

The prosecution must prove the guilt of the defendant beyond reasonable doubt. The burden of proof rests on the prosecution throughout and the defendant is presumed innocent until proved guilty (Article 87 of the Basic Law; Article 11 of the Hong Kong Bill of Rights). Where the legal burden is placed on the defendant, typically for a statutory defence or exception, that burden is generally discharged on the balance of probabilities.

At the prosecutorial stage, the applicable standard is lower but related. Paragraph 5.5 of the Prosecution Code provides that the prosecution must be satisfied that the evidence demonstrates a “reasonable prospect of conviction”. In applying this test, prosecutors consider, among other things, the evidence available, the admissibility and reliability of the evidence, the availability, competence and credibility of witnesses with their likely assessment by the court, any reasonably anticipated contrary evidence, likely defences, and how a properly instructed tribunal of fact is likely to act on the evidence and arguments.

Where market misconduct is pursued before the MMT, the position is different. Such proceedings are civil and inquisitorial in nature, and the standard of proof is one that applicable to civil proceedings, i.e., the balance of probabilities (section 252(7) of the SFO). These principles were also affirmed by Cheng Chak Ngok v Securities and Futures Commission [2019] HKCFA 17.

There is no statute of limitations for prosecuting indictable offences in Hong Kong. Indictable offences such as fraud, money laundering, certain corruption offences, and criminal market misconduct offences under the SFO may, in principle, be prosecuted regardless of how long ago the alleged conduct occurred, subject to any specific limitation period prescribed by the legislation creating the offence.

For offences other than indictable offences, an information must generally be laid within six months from the time when the matter of such complaint or information respectively arose (section 26 of the Magistrates Ordinance (Cap. 227) (“MO”)), unless the legislation creating the offence prescribes a different period.

Accordingly, the applicable limitation period depends on the nature of the particular offence and any specific statutory provision governing its prosecution. In the case of continuing offences or conspiracies alleged to have continued over a period of time, the relevant date for limitation purposes may be the date on which the continuing conduct or conspiratorial agreement ended, rather than the date of the first act.

Hong Kong has no deferred prosecution agreements or non-prosecution agreements, and there is no statutory civil recovery regime of the kind found in the United Kingdom. Hong Kong does, however, have a number of civil and regulatory mechanisms that may be used to address financial misconduct without criminal prosecution.

Market Misconduct Tribunal proceedings. Market misconduct may be pursued civilly before the MMT. If misconduct is established to the civil standard, the MMT may make orders pursuant to SFO section 257 including disgorgement of profits gained or losses avoided, disqualification from acting as a director or participating in management of listed companies or prohibition from dealing in the securities market for up to 5 years, cease-and-desist orders, and payment of costs and expenses . No separate court approval is required for the MMT to make such orders, although its determinations and orders are subject to appeal.

Civil proceedings by the SFC. Under sections 213 and 214 of the SFO, the SFC may seek injunctions, asset preservation orders and restoration orders before the Court of First Instance, and may seek disqualification of directors for up to 15 years and compensation orders. These proceedings are court-supervised throughout.

Regulatory discipline. The HKMA disciplines authorised institutions for AML/CFT failings (reprimands and substantial fines); the SFC disciplines licensed corporations and individuals (fines, licence revocation, industry bans); and the AFRC disciplines auditors. These outcomes may provide an alternative regulatory response to matters that do not warrant criminal prosecution.

Restraint and confiscation. Restraint and confiscation orders are available under the OSCO, pursuant to paragraph 9.1 of the Prosecution Code. Restraint orders may be obtained to preserve assets during an investigation, while confiscation orders may be made following conviction to prevent an offender from benefiting from the proceeds of crime. The Prosecution Code requires prosecutors to consider such orders proactively in appropriate cases.

Civil recovery by victims. Victims may also pursue private civil remedies, including Mareva injunctions, proprietary claims, and recovery orders, where the circumstances permit. The courts have, for example, ordered the return of misappropriated crypto-assets to fraud victims.

Relevant factors in deciding whether to pursue prosecution or an alternative route include the strength of the evidence, the public interest, cooperation, remediation and disgorgement. Cooperation of this kind may also be taken into account in sentencing and in deciding whether to prosecute.

Hong Kong has no formal plea bargaining regime and no equivalent of United States-style cooperation agreements. Several related practices nonetheless operate.

First, charge negotiation: the prosecution may accept a plea to a lesser or alternative charge, or to a reduced number of counts. Paragraph 8.1 of the Prosecution Code requires that the charges adequately reflect the criminality alleged and that the number of charges be kept as low as reasonably possible. Any such arrangement must therefore be justified by the evidence and the public interest; charges must not be dropped merely to secure a plea, and the remaining charges must fairly reflect the criminality.

Second, sentence discount for guilty pleas: an offender who pleads guilty may receive a discount of up to one-third of the sentence that would otherwise have been imposed following a trial. The full one-third discount is generally available where the plea is entered at an early stage. The discount diminishes as the plea comes later in the process. This reflects the utilitarian value of an early plea in saving court’s time and resources and avoiding the need for witnesses to give evidence.

Third, cooperation: a defendant who gives evidence against co-defendant or assists the authorities may receive a further discount in sentence, and cooperation before charge may influence the decision whether to prosecute at all. In serious multi-handed frauds and corruption cases, accomplice witnesses may be granted immunity from prosecution with the Director of Public Prosecutions’ approval, on condition of truthful testimony.

Fourth, bind over: Under section 61 of the Magistrates Ordinance (Cap. 227), Hong Kong courts may order a defendant to enter into a recognizance to be of good behaviour or keep the peace. This provides a discretionary alternative to conviction for comparatively minor offences or technical breaches. Courts apply the procedure sparingly, balancing proportionality and public interest. While it can divert first‑time offenders from a criminal conviction, serious fraud, corruption, or money‑laundering cases would generally not be suitable, given the seriousness of the offending and the need for deterrence and accountability.

Unlike some other jurisdictions, there is no formal judicial approval process for charge arrangements, and the court’s role is principally to determine the appropriate sentence on the basis of the pleaded facts, with the prosecution and defence presenting an agreed or contested basis of plea.

There is no general obligation on a person to report every criminal conduct they discover. However, specific reporting obligations apply in certain sectors and circumstances as set out below.

Reporting suspicious transaction. A person who knows or suspects that property represents the proceeds of an indictable offence must make a disclosure to an authorised officer as soon as it is reasonable to do so (section 25A(1) of the OSCO). In practice, suspicious transactions reports are made to the JFIU, largely through the Suspicious Transaction Report and Management System 2 (STREAMS 2) electronic system. Financial institutions, licensed corporations and designated non-financial businesses are among the principal reporters; the JFIU processed and analysed over 190,000 suspicious transaction reports in 2025. Pursuant to section 25A(2) of the OSCO, a person who makes the requisite disclosure may have a statutory defence where the disclosure is made before the relevant act and the act is done with the consent of an authorised officer, or where the disclosure is made afterwards on the person’s own initiative and as soon as it is reasonable to do so. Dealing with the property without the requisite consent may otherwise constitute an offence, and “tipping off” the person under suspicion is itself criminalised under section 25A(5) of the OSCO.

Regulated persons. Licensed or registered persons are subject to notification obligations under the SFC’s Code of Conduct for Persons Licensed by or Registered with the SFC, including any material or suspected breaches of applicable laws, rules, regulations and codes such as market misconduct provisions. Listed companies must disclose inside information, including significant investigations affecting the company or its directors, under Part XIVA of the SFO and the Listing Rules.

Reporting corruption. Corruption may be reported to the ICAC through its Report Centre, regional offices, 24-hour hotline or by post. The ICAC publishes guidance on the available reporting channels.

Benefits of voluntary disclosure. Voluntary reporting and cooperation may be taken into account as mitigation factors at sentencing and weigh in favour of the suspect in the public interest assessment when deciding whether to prosecute; where the evidence is marginal, early cooperation and remediation may tip the balance against prosecution.

Hong Kong does not have a codified system of sentencing guidelines. Sentences are determined by reference to the statutory maximum penalty for the offence, applicable sentencing principles, and where established, the tariff or guidelines developed in decided cases, all of which are applied to the facts and circumstances of each individual case. The classical principles for sentencing are retribution, deterrence, prevention and rehabilitation, with deterrence generally carrying particular weight in serious financial crime.

For instance, in the case of money laundering, the maximum penalty is a fine of HK$5 million and imprisonment for 14 years on conviction on indictment. As a general rule, even first offenders convicted of money laundering should receive an immediate term of imprisonment. However, there is no tariff for sentencing such offences (HKSAR v Lam Ka Sin [2021] HKCA 180). In HKSAR v A Male known as Boma Amaso [2012] 2 HKLRD 33, the Court of Appeal explained that the highly variable circumstances in which money laundering may be committed made it difficult and undesirable to formulate a fixed sentencing guideline. While the amount of “black money” laundered is generally a significant consideration in determining the sentence, the court will consider the circumstances of the individual case. The Court of Appeal in Boma identified a number of significant considerations, including (a) the nature of the predicate offence, (b) the offender’s state of knowledge, (c) any international dimension, (d) the sophistication and degree of planning, (e) whether organised criminality was involved, (f) whether there was one transaction or many and the length of time over which the offence was committed, (g) whether the offender continued to launder funds after discovering the criminal nature of the funds, and (h) the offender’s role and the acts performed.

Leniency and discount policies operate in three main ways. First, the guilty plea discount: a timely guilty plea will generally attract a discount of up to one-third off the post-trial sentence, with the discount diminishing as the plea is entered later in the proceedings. Second, cooperation with the authorities, including assistance in investigations, giving evidence against co-defendants, and voluntary disclosure, may attract a further discount depending on the nature and extent of the assistance. Third, restitution and remediation: genuine efforts to make good the loss are significant mitigating factors, particularly where the defendant is a first offender of good character.

Meanwhile, enhanced sentences may be granted by the Court upon the prosecution’s application under Section 27 of OSCO in cases involving dummy bank accounts, for the purposes of deterring the illicit use of dummy bank accounts. These applications by the prosecution typically result in sentence increases ranging from 13% to 33% (or roughly 2 to 18 months extra) for individuals who lend, rent, or sell their bank accounts to syndicate fraudsters.

The usual sentencing options include imprisonment, fines, as well as suspended sentences, community service orders and probation where appropriate. Ancillary orders such as confiscation orders under section 8 of the OSCO (with a default term in lieu of payment), compensation orders, and director disqualification orders may also be made. For corporate offenders, a fine may be imposed by the court. Regulatory disciplinary action may also follow in parallel where the offender is subject to a regulatory regime.

Hong Kong has no general statutory defence of “adequate procedures” and no failure-to-prevent offence. The existence of  a compliance programme does not, in itself, prevent criminal liability. Compliance nevertheless remains relevant at different stages of the enforcement process.

At the charging stage, the public interest assessment under paragraph 5.9 of the Prosecution Code permits prosecutors to take into account various factors including but not limited to the nature and circumstances of the offence. The conduct of the company and its response to the offending may therefore be relevant. A genuine pre-existing compliance culture, prompt remediation and cooperation with the authorities may support a decision not to prosecute. At sentencing, compliance efforts, cooperation and remediation may also be taken into account as mitigating factors. At the regulatory stage, the adequacy of compliance systems is particularly important. The HKMA assesses authorised institutions’ AML/CFT systems under the AMLO and the AML/CFT Guideline, including areas such as governance, customer due diligence, transaction monitoring and suspicious transaction reporting. The SFC evaluates licensed or registered persons against its regulatory requirements, including the Code of Conduct and the Management, Supervision and Internal Control Guidelines for Persons Licensed by Or Registered with the SFC.

Businesses can best protect themselves by adopting a risk-based programme proportionate to the nature, scale and complexity of their business and the risks to which they are exposed. Key elements include: clear tone at the top and defined accountability (designated compliance officer or money laundering reporting officer with direct board access); appropriate written policies and procedures covering bribery, fraud, AML/CFT and conflicts; customer and counterparty due diligence; transaction monitoring calibrated to risk; secure and accessible whistleblowing channels with protection against retaliation; regular, role-specific training; periodic independent review and testing. Where misconduct is identified, businesses should also have appropriate procedures for incident response, including early legal advice, evidence preservation, and assessment of disclosure duties under section 25A of the OSCO and the SFC reporting regime. In practice, the existence of an effective compliance framework, together with the manner in which a business responds when misconduct is identified, may be important in determining the regulatory or prosecutorial response. It is therefore important not only to have appropriate controls in place, but also to be able to demonstrate that those controls were properly implemented, monitored and enforced.

For individuals, sentences for the principal offences often depends on the nature and circumstances of the offence and without concrete sentencing guidelines. Money laundering under section 25 of the OSCO attracts at most 14 years’ imprisonment and a fine of HK$5 million on indictment without a clear tariff on sentencing (HKSAR v Lam Ka Sin [2021] HKCA 180). As explained in HKSAR v A Male known as Boma Amaso [2012] 2 HKLRD 33, the courts take into account a range of factors, including but not limited to the amount of money laundered, the nature of the predicate offence, and whether the operation involved an international dimension.

Fraud under section 16A of the TO is similarly punishable by a maximum of 14 years’ imprisonment, with the sentence generally reflecting the circumstances and seriousness of the offending, including the amount of loss caused by the fraud.

Corruption offences under the POBO are also subject to different maximum penalties depending on the particular offence. For example, bribery of public servants under section 4, the offering of advantages to public servants by persons having dealings of any kind with government departments or public bodies under section 8, and bribery in the private sector under section 9, are punishable on indictment by a fine of HK$500,000 and imprisonment for up to seven years. There is no fixed sentencing tariff for these offences (HKSAR v Nguyen Van To (CACC 353/2006, 11 December 2007, unreported)), and imprisonment is generally the norm. Relevant considerations include the amount or value of the advantage involved, the offender’s role, the duration and extent of the corrupt conduct, any breach of trust and the impact of the corruption on the public interest.

In the Ching Lee Holdings false-trading case in 2024, where the 3 ringleaders received 4 years and 4 months, 6 years and 8 months of imprisonment respectively. The SFC described these as the heaviest prison terms imposed in market manipulation cases to date since the SFO came into force in 2003. Tax evasion under section 82 of the IRO is punishable by fine (plus treble the tax evaded or undercharged) and, in serious cases, imprisonment of up to three years on indictment.

For corporates, fines are the principal criminal sanction and can be substantial. Confiscation orders may also be made against companies as against individuals. In practice, parallel regulatory disciplinary action frequently gives rise to significant financial penalties. For example, the SFC, in collaboration with the HKMA, fined EFG Bank AG HK$10.85 million for AML/CFT failings in December 2025, while the SFC’s disciplinary actions in 2024-25 resulted in total fines of HK$96.7 million against 7 corporations and 17 individuals, including a HK$66.4 million fine against Hang Seng Bank for regulatory failures relating to the sale of investment products.

Other ancillary consequences include compensation orders, director disqualification of up to 15 years, licence revocation, industry bans and costs orders. In the case of listed companies, reputational and listing consequences (including trading suspensions) may further compound the penal outcome.

A defendant convicted in the Magistrates’ Court may appeal to the Court of First Instance against conviction, sentence or both under section 113 of the MO. Questions of law may instead be raised by way of case stated under section 105 of the MO. A defendant may also apply to the Magistrate for a review of the decision under section 104 of the MO, although a review is not a prerequisite to an appeal.

Convictions and sentences imposed by the District Court and the Court of First Instance may be appealed to the Court of Appeal — as of right on a point of law under section 81 of the Criminal Procedure Ordinance (Cap. 221) (“CPO”), and otherwise with leave (which is required for appeals against sentence and against conviction on factual grounds under sections 82 and 83G of the CPO). A further appeal may lie to the Court of Final Appeal from a final decision of the Court of Appeal or in limited circumstances directly from the Court of First Instance, with leave under sections 31 and 32 of the Hong Kong Court of Final Appeal Ordinance (Cap. 484). Leave may be granted where the case involves a point of law of great general or public importance in the decision or it is shown that substantial and grave injustice has been done.

The prosecution’s position is more constrained. Similar to the defendant, the prosecution may apply to the Magistrate for a review of the decision under section 104 of the MO. However, the prosecution may only appeal (i) from the Magistrates’ Court to the Court of First Instance and (ii) from the District Court to the Court of Appeal by way of case stated, on the ground that the decision is erroneous in point of law or in excess of jurisdiction, under section 105 of the MO and section 84G of the District Court Ordinance (Cap. 336) respectively. The Secretary for Justice may, in addition, apply to the Court of Appeal for a review of sentence on the ground that a sentence is not authorized by law, is wrong in principle or is manifestly excessive or manifestly inadequate (section 81A of the CPO). Following an acquittal on indictment, the Secretary for Justice may also refer a question of law to the Court of Appeal under section 81D of the CPO, although such a reference does not affect the acquittal.

MMT determinations may be appealed to the Court of Appeal on a point of law, or on a question of fact with leave of the Court of Appeal under section 266 of the SFO. Regulatory disciplinary decisions of the SFC and the HKMA may be reviewed by the Securities and Futures Appeals Tribunal, with judicial review also available in appropriate cases (Tam Sze Leung & Ors v Secretary for Justice and Securities and Futures Commission [2022] HKCFI 2330).

The Hong Kong authorities remain active in tackling financial crime, with substantial enforcement and supervisory activity across the principal agencies. The clearest measure is that the volume of suspicious transaction reports received by the JFIU increased substantially, from 97,577 in 2023, 147,660 in 2024, and 190,636 in 2025, representing year-on-year increases of 51% and 29.1% respectively, with approximately 121,118 received as at 31 July 2026. This growth is driven principally by the expanding use of bank reporting channels in combating money laundering and fraud.

The ICAC continues to investigate corruption across both the public and private sectors. It received 1,780 corruption complaints in 2025, with private-sector complaints accounting for approximately 70% of the total. The ICAC’s Operations Department continues to conduct regular investigations across a range of sectors including banking, construction, property management and public bodies.

The SFC also maintains an active enforcement programme. In 2024-25, it took disciplinary action against seven corporations and 17 individuals, resulting in total fines of HK$96.7 million. It initiated 41 inquiries under section 179 of the SFO and commenced 40 investigations under section 182 of the SFO. Four individuals were charged with offences involving suspected market misconduct and money laundering. The SFC has also continued to pursue civil proceedings, including disgorgement orders and disqualification orders of up to 10 years under section 214 of the SFO.

The Police treat deception (including fraud) as the largest single category of crime by volume and operate the Anti-Deception Coordination Centre under the CCB. The ADCC works closely with other government agencies and stakeholders, including the banking and securities industries, in combating fraud and deception. The Financial Intelligence and Investigation Bureau also facilitates cooperation in combating money laundering and terrorist financing through the Financial Intelligence and Investigation Taskforce, which brings together the Hong Kong Monetary Authority, the Hong Kong Association of Banks and a number of banks.  The HKMA continues to take disciplinary action against banks and other authorised institutions for AML/CFT failures, and the AFRC has begun to impose disciplinary sanctions in audit-related misconduct cases. The overall picture is therefore of an enforcement community that is well-resourced, increasingly coordinated across agencies, and increasingly willing to pursue both individuals and institutions.

Due to the large volume of cases handled by the court, it is difficult to estimate the specific duration. From the commencement of the authorities’ investigation to the sentencing of the court, the whole procedure may take several years. If the defendant pleads guilty, the duration of the litigation will be shortened.

Five trends stand out.

Fraud at scale. Telephone and online investment fraud has grown into a dominant category of crime in Hong Kong. In 2025, deception cases accounted for 48.5% of all reported crimes, while online investment fraud accounted for the highest monetary loss, involving approximately HK$3.58 billion.The Police response has been coordinated through the ADCC, and enforcement has increasingly focused on the money movers — the syndicates laundering the proceeds through bank accounts, money changers and crypto assets.

Virtual assets. The JPEX collapse, involving approximately HK$1.6 billion reported losses and Hong Kong’s largest financial fraud in recent years, accelerated the regulation of virtual asset service providers. The regulatory framework for virtual asset trading platforms under the AMLO licensing regime was introduced in 2023, followed by the Stablecoins Ordinance (Cap. 656) enacted in 2025. Enforcement against unlicensed platforms promoted through social media “finfluencers” is now a standing priority for the SFC and the Police.

Money laundering enforcement. Suspicious transaction reports have increased substantially, from 147,660 in 2024, 190,636 in 2025 and 121,118 as at July 2026. The “Letter of No Consent” account-freeze regime is deployed extensively to prevent the dissipation of suspected proceeds of crime, and its legality was affirmed by the Court of Final Appeal in Tam Sze Leung v Commissioner of Police [2024] HKCFA 8. Money laundering charges are also frequently pursued alongside underlying fraud and other financial crime offences.

Market integrity. The SFC and the ICAC have conducted joint operations targeting suspected bribery and insider dealing in the securities sector, while the courts have imposed the heaviest market manipulation sentences to date. The SFC has also continued to make use of its civil enforcement powers under section 214 of the SFO, including disqualification and compensation orders, in appropriate cases involving directors and senior management of listed companies.

Corporate governance and audit quality. Since 2022, the AFRC has been responsible for the regulation of auditors of public interest entities. The SFC and the AFRC have jointly targeted “dubious loans” by listed companies, including arrangements involving funds channeled to related parties. Auditor discipline has consequently become an increasingly visible strand of enforcement. Sanctions screening and compliance have also received increased attention in the banking sector.

Stablecoin licensing. The Stablecoins Ordinance came into effect on 1 August 2025, establishing Hong Kong’s licensing regime for issuers of fiat-referenced stablecoins. The HKMA began accepting licence applications in August 2025 and 36 entities applied for licences by the initial application deadline of 30 September 2025. In April 2026, the HKMA granted the first two stablecoin issuer licences, to Anchorpoint Financial Limited and to The Hong Kong and Shanghai Banking Corporation Limited,  with further licences expected in the course of 2026. The HKMA has described the regime as laying the foundation for the development of the stablecoin and broader digital asset ecosystem.

JPEX prosecution. The prosecution arising from the JPEX crypto-exchange collapse has continued to advance. Total arrests reached around 80 persons during 2025, and 26 defendants stand charged with conspiracy to defraud and related offences, including fraud and money laundering, in respect of losses exceeding HK$1.6 billion. The case remains one of Hong Kong’s largest financial fraud investigations to date.

AML discipline. In December 2025, the SFC reprimanded and fined EFG Bank AG HK$10.85 million for AML/CFT control failings, continuing the HKMA and SFC pattern of disciplinary action against banks and brokers for systemic compliance deficiencies.

Virtual asset regulation. Regulatory development has continued beyond the licensing of stablecoin issuers. In December 2025, the FSTB and the SFC published consultation conclusions on legislative proposals to regulate virtual asset dealing and custodian services. In May 2026, the FSTB and the SFC further published consultation conclusions on legislative proposals to regulate virtual asset advisory service providers and virtual asset management service providers. In June 2026, the Legislative Council Panel on Financial Affairs considered proposals for the regulatory regime for providers of virtual asset dealing, custodian, advisory and management services. The discussion covered, among other matters, qualification requirements for professional investors and the regulation and development of digital asset-related products and services.

ICAC enforcement. The ICAC has continued to pursue corruption and related fraud in the banking sector. In August 2026, two former bank managers were sentenced to 3 years’ imprisonment in connection with an investment fraud syndicate that allegedly deceived Japanese investors into investing more than JPY400 million in various companies falsely claiming to be involved in investment projects in Africa and to hold assets exceeding HK$37 billion in their bank accounts.

Enforcement against unlicensed financial influencers. The SFC has also taken enforcement action against the growing use of social media to provide unlicensed investment advice. The concern is that failure to meet the SFC’s standards of conduct and accountability may expose general public investors to significant risks and harm. In November 2025, the Eastern Magistrates’ Court convicted a financial influencer of carrying on a business in advising on securities without a licence, through a Telegram investment-advice group. The finfluencer charged subscribers USD200 per month and circulated commentaries, recommendations and target prices on various securities. He was convicted and sentenced to 6 weeks’ imprisonment, making this the SFC’s first custodial sentence against a finfluencer for such conduct.

The main pending or proposed changes concern virtual assets. The FSTB and the SFC have concluded consultations on proposed licensing regimes for virtual asset dealing and custodian services, as well as for virtual asset advisory and management services. In June 2026, the Legislative Council Panel on Financial Affairs considered the proposed regulatory regimes for providers of virtual asset dealing, custodian, advisory and management services. The FSTB and the SFC have indicated that they intend to finalise the legislative proposals and introduce a bill into the Legislative Council in 2026. The Stablecoins Ordinance regime is also being phased into full operation through 2026. The HKMA began accepting licence applications following the commencement of the regime in August 2025 and granted the first two stablecoin issuer licences in April 2026. Further licences may be issued as the HKMA continues to assess applications.

At the policy level, Hong Kong’s fifth-round mutual evaluation by the FATF is in progress. The latest FATF follow-up report published in 2023 identified certain areas in which Hong Kong had been assessed as only “partially compliant”, including on “politically exposed persons”, “new technologies”, “customer due diligence in Designated Non-Financial Businesses and Professions”, and “transparency and beneficial ownership of legal arrangements”.

Other possible reforms, including the introduction of deferred prosecution agreements for corporate offenders and reform of the rules governing corporate criminal attribution, remain matters of policy discussion rather than enacted legislation. Similarly, while the HKMA continues to encourage whistleblowing channels within banks through supervisory guidance, no statutory whistleblower protection regime has been enacted.

There are several areas of the Hong Kong framework that may be regarded as areas for further development.

Corporate liability. Hong Kong generally relies on the common law identification doctrine for attributing the acts and state of mind of individuals to a company in offences requiring mens rea. This makes it more difficult to attribute fault to large and decentralised organisations where responsibility for decision-making is dispersed, while Hong Kong has no “failure to prevent” offence. The practical result is that corporate criminal prosecutions are rare comparative to individual prosecutions, and corporate attribution may therefore be regarded as an area for further consideration

Resolution mechanisms. The absence of deferred prosecution agreements in Hong Kong limits the options available for resolving corporate criminal misconduct efficiently, and can discourage early cooperation and remediation. There is likewise no civil recovery or unexplained wealth order regime equivalent to those available in some other common-law jurisdictions. The existing framework is principally centered on confiscation and restraint which are tied to the criminal process.

The letter-of-no-consent regime. Although the regime was upheld by the Court of Final Appeal in Tam Sze Leung [2024] HKCFA 8, the regime does not prescribe a fixed time limit for restrictions imposed on funds, nor does it provide a specific statutory review mechanism following the issuance of a letter of no consent. This may give rise to concerns where accounts remain subject to restrictions for a prolonged period. Businesses and individuals affected have long pressed for statutory time limits and a review mechanism.

Cross-border arrangements. The cross-border nature of fraud, money laundering and other financial crime continues to create practical challenges. Limited extraterritorial reach beyond the specific statutory extensions also constrains enforcement against overseas actors.

Whistleblower protection. There is no statutory protection for whistleblowers in connection with financial crime in Hong Kong, which is widely regarded as a brake on the detection of corporate misconduct. Strengthening protection for persons who report suspected corporate misconduct could potentially facilitate earlier detection and reporting. FATF’s 2023 follow-up report noted that Hong Kong remained only partially complaint in respect of certain technical-compliance recommendations.