Plans by the Hong Kong authorities to chill out public disclosure necessities for corporations working within the metropolis have sparked considerations over transparency and money-laundering, in addition to dwindling press freedom.
Hong Kong chief government Carrie Lam has beforehand instructed the town’s Legislative Council (LegCo) that the federal government will regulate authorized necessities to make it more durable to hold out a web-based Corporations Registry search.
The Hong Kong Journalists’ Affiliation (HKJA) mentioned final month that this can be very involved concerning the measures and their impression on the power of journalists to hold out investigations into company exercise.
Property brokers have additionally expressed considerations that they will not be capable of perform sufficient due diligence to stop property scams, as required by regulation.
At the moment, it’s potential to hold out a web-based search of the Corporations Registry and discover the residential addresses and ID card numbers of administrators of Hong Kong corporations. Related data is obtainable for firm secretaries and liquidators known as in to wind up a enterprise.
The federal government is planning to make sure that solely correspondence addresses and partial ID numbers will likely be accessible in future, in a bid to guard administrators’ privateness.
Below new guidelines being carried out by the Bureau of Monetary Companies and the Treasury, corporations can refuse to permit public entry to the administrators’ typical residential addresses and the entire ID numbers of the administrators and firm secretaries.
By subsequent 12 months, corporations might withhold registration paperwork bearing the standard residential addresses and ID numbers of their officers, they usually might withdraw such paperwork from the registry totally in 2023.
The brand new guidelines are extremely prone to move in a LegCo that’s managed by pro-Beijing lawmakers.
Hong Kong has beforehand had a wonderful worldwide fame for transparency that underpins its former standing as a world buying and selling metropolis with a separate administration from China.
As late as 2017, the monetary companies bureau had adopted suggestions from the Monetary Motion Activity Drive, making certain public entry to proprietor data for registered corporations.
Hong Kong has been a member of the duty pressure, which works to fight cash laundering and terrorism financing, since 1991, earlier than the 1997 handover to China.
Hong Kong’s Corporations Registry web site nonetheless has a particular web page devoted to explaining the way it complies with FATF rules.
“Detrimental impression may very well be very massive’
Simon Lee of the Chinese language College of Hong Kong (CUHK) enterprise faculty mentioned many different individuals and organizations must conduct Corporations Registry searches as a part of due diligence.
“I feel the chief government is taking an excessively simplistic view of this,” Lee instructed RFA. “This is not nearly journalism; it includes the safety of an amazing many belongings and is important to the fundamental operations of the monetary markets.”
“It must be dealt with with care, in any other case the detrimental impression may very well be very massive.”
He cited the instance of actual property brokers who’re required to hold out background analysis on corporations concerned in property offers.
He mentioned the brand new restrictions may appeal to worldwide organized crime teams to arrange within the metropolis to hold out cash laundering, and would do nothing to enhance the town’s fame as a tax evasion hub.
Distinguished financial Legislation Ka-chung mentioned the transfer would undermine the general public’s proper to entry data.
“Hong Kong banks may very well need prospects to volunteer firm registration data in future, as they tackle the work of stopping money-laundering,” he mentioned.
Actual property brokers expressed considerations on Tuesday that new legal guidelines will stop them checking the backgrounds of property homeowners and probably stopping scams, The Customary newspaper reported on March 31.
Centaline Property Company mentioned the restriction makes it tough for brokers to fulfill regulatory necessities, the paper mentioned.
A spokesperson for the Monetary Companies and Treasury Bureau mentioned in a press release issued late on Wednesday that each one searchers, together with journalists, would proceed to have entry to Corporations Registry data, however solely to correspondence addresses relatively than most important residences of firm administrators, and solely to a truncated model of their ID card quantity.
“There are not any new restrictions on different presently obtainable data,” the spokesperson mentioned.
But it surely made no remark concerning the second and third phases of the proposed rule adjustments, which can start curbing public entry to corporations registered after October 2022, and permit corporations till December 2023 to use to the Corporations Registry to take away present data from public view.
Reported by Gigi Lee and Chan Yun Nam for RFA’s Cantonese Service. Translated and edited by Luisetta Mudie.