https://www.cnbc.com/2018/05/16/money-laundering-hong-kong-regulations-combat-financial-crime.html

The city, long an oasis of good government and transparent finance in a region that often struggles with corruption and illicit money dealings, is well aware of its reputation and wants to keep it.

In a report released at the end of April, Hong Kong rates its ability to fight dirty money flows as "medium-high," citing its strong legal system, political commitment to the issue, and cooperation between the public and private sectors.

But the very strengths that give the city economic dynamism — such as openness to financial flows and the sheer size of the banking system — can also be weaknesses.

The government's Hong Kong Money Laundering and Terrorist Financing Risk Assessment Report rated Hong Kong's overall money laundering risk, threat and vulnerability as "medium-high," though it said the banking sector specifically faces a "high" risk.

"We are alert to the fact that Hong Kong's competitive advantages … could also make it attractive for criminals seeking to hide or move funds," Paul Chan, financial secretary of Hong Kong, said in the report.

Illustrating the importance of finance to Hong Kong, nearly 200 banking institutions had assets of HK$22.7 trillion ($2.89 trillion) at the end of 2017 — an amount almost equivalent to nine times the size of its economy, according to the assessment.

Keith Williamson, managing director and head of disputes and investigations in Hong Kong and China for turnaround firm Alvarez & Marsal, said that authorities must balance the need for openness and accessibility with regulation that's tight enough to deter money launderers.

"It's a difficult balancing act to perform," Williamson, an expert in forensic and investigative accounting, told CNBC.

So-called suspicious transaction reports have nearly tripled in the five years to 2017, partly due to stepped-up monitoring and better compliance since the 2012 implementation of a local ordinance against money laundering and terrorist financing.