Extradition law: Hong Kong tycoons start moving assets offshore

09 April 2019

Extradition law: Hong Kong tycoons start moving assets offshore

Hong Kong: Some Hong Kong tycoons have started moving personal wealth offshore as concern deepens over a local government plan to allow extraditions of suspects to face trial in China for the first time, according to financial advisers, bankers and lawyers familiar with such transactions.

One tycoon, who considers himself potentially politically exposed, has started shifting more than $100 million from a local Citybank account to a Citibank account in Singapore, according to an adviser involved in the transactions. “It’s started. We’re hearing others are doing it, too, but no one is going to go on parade that they are leaving,” the adviser said. “The fear is that the bar is coming right down on Beijing’s ability to get your assets in Hong Kong. Singapore is the favoured destination.”

Hong Kong and Singapore compete fiercely to be considered Asia’s premier financial centre . The riches held by Hong Kong’s tycoons have until now made the city the larger base for private wealth, boasting 853 individuals worth more than $100 million—just over double the number in Singapore-—according to a 2018 report from Credit Suisse

Professor Simon Young of the University of Hong Kong’s law school told Reuters that it was understandable that some Hong Kong residents might be considering moving assets out of the city given the little-noticed financial reach of the Bill.

Singapore Shift The head of a private banking operations of an international bank in Hong Kong said clients have been moving money out of Hong Kong to Singapore. “These aren’t mainland Chinese clients who might be politically exposed, but wealthy Hong Kong clients,” the banker said. “The situation in Hong Kong is out of control.”

The amendments seek to simplify case-by-case extraditions to jurisdictions, including mainland China , beyond the 20 with which Hong Kong already has extradition treaties.

As well as removing an explicit block on extraditions to mainland China in the current Fugitive Offenders Ordinance, the amendments also remove the restrictions on the mainland from the Mutual Legal Assistance in Criminal Matters Ordinance, known as the MLAO.

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