HONG KONG: Some remittance agents and money changers agree that authorities should step up scrutiny of their transactions in principle but they fear losing customers who will balk at being asked to hand over personal data and verify their identities.

Mak Ping-sang, who runs the Sang Sang Money Exchange in Sha Tin, said he is afraid some customers may refuse to give personal particulars despite the new rules and turn to other shops instead.

He predicted that tightening controls on remittance agents and money changers will have little effect on combating money laundering and terrorist financing, since crooks have other ways to launder their money.

The government proposed to empower authorities to enter the premises of remittance agents and money changers to carry out routine inspections, checking books and records.

Mak contended the records are private and he questioned whether he should have to disclose all information to inspectors.

He also added that if firms become liable to prosecution because they have failed to record some transactions, many business owners will feel squeezed.

"Hong Kong will lose all its edge," he said. "It won't fit Hong Kong's status as an international city."

He also worried that some rules may be too stringent to be followed, said Mak.

An owner of a chain of nine remittance and foreign exchange stores, who wishes to remain anonymous, said the proposed law will put her under enormous stress as she may face prosecution if she fails to keep all relevant transaction records for a specified period.

She also fears that some clients may decline to give their personal data and turn away from money changing windows, she said.

"My company's business has already slumped around 60 to 70 percent during the economic downturn. It will be even harder for us to survive if more rules are imposed. I hope authorities can be more compassionate," she said.

She expected her firm's administration costs will go up if the new law is introduced.

She urged the government to do more to promote the new rules so as to raise public awareness if changes are made.

She added that measures are also needed to protect the privacy of clients.

Edwin Shiu Man-chak, the chairman of the Hong Kong Money Changers and Remittance Association, said he backs the government's proposal in principle but stressed the need for authorities to communicate well with the trade when introducing a licensing system.

The first-round public consultation on the proposed anti-money-laundering bill will run until October 8.

(HK Edition 07/10/2009 page1)