Asia Insurance Forum 2019

(繁體) 亞洲保險論壇 2019

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Question on “Policies on Retirement Protection”

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Council Meetings (Questions): Foreign companies’ regional headquarters and offices in Hong Kong (2021.02.24)

Question: In a survey conducted in 2020, the Census and Statistics Department successfully surveyed 9 025 regional headquarters (RHQs), regional offices (ROs) and local offices (LOs) in Hong Kong the parent companies of which were located outside Hong Kong (collectively known as foreign companies), and around 400 foreign companies did not respond. Among the foreign […]

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Council Meetings (Questions): Foreign companies’ regional headquarters and offices in Hong Kong (2021.02.24)

Question:

In a survey conducted in 2020, the Census and Statistics Department successfully surveyed 9 025 regional headquarters (RHQs), regional offices (ROs) and local offices (LOs) in Hong Kong the parent companies of which were located outside Hong Kong (collectively known as foreign companies), and around 400 foreign companies did not respond. Among the foreign companies successfully surveyed, the number of RHQs and ROs totalled 3 980, which is 48 less than the figure in the 2019 survey. Besides, among the foreign companies surveyed, four per cent of them planned to phase out or relocate outside Hong Kong part or all of their business in Hong Kong, while another 21 per cent of them were uncertain about their business plans in Hong Kong. Some members of the business sector worry that the situation will deteriorate. In this connection, will the Government inform this Council:

(1) of the number of RHQs/ROs which were not enumerated in the 2020 survey but had been enumerated in the previous year; whether it knows (i) the locations of the parent companies of such RHQs/ROs, (ii) the trades in which such RHQs/ROs were engaged, and (iii) if such RHQs/ROs have terminated their business in Hong Kong (if so, of the reasons for that);

(2) whether it will proactively implement measures to retain those foreign companies which are planning or may plan to terminate their business in Hong Kong; if so, of the details; and

(3) whether it will roll out new measures to attract multinational companies to set up RHQs in Hong Kong; if so, of the details?

Reply:

President:

My reply to the three parts of the question is as follows:

(1) The Annual Survey of Companies in Hong Kong with Parent Companies Located outside Hong Kong is jointly conducted by Invest Hong Kong (InvestHK) and the Census and Statistics Department. The 2020 survey enumerated a total number of 9 025 companies, while around 400 did not respond. This rate has been about the same as previous years.

These 400 companies which participated in the 2019 survey had either declined to take part in the 2020 survey or could not be reached during the survey period. The Government is unable to identify from companies which could not be reached the number which might have ceased operation in Hong Kong. Indeed, the failure to reach these companies may be due to a change of addresses.

Among the some 400 companies, 135 were enumerated as regional headquarters or regional offices in the 2019 survey. According to the information collected from the 2019 survey, the parent companies of these 135 companies were located in various countries, including France, Germany, Japan, Mainland China, the United Kingdom and the United States of America. As for the line of business in Hong Kong of these 135 companies, they were mainly in the financing and banking sector, the import/export trade, wholesale and retail sector and the professional, business and education services sector.

(2) As an important part of its investment promotion work, InvestHK provides aftercare services to companies which it has previously assisted; as well as other major overseas and Mainland companies which have set up operations in Hong Kong, so as to keep track of their development and help them seize opportunities to grow, expand and create jobs in Hong Kong.

InvestHK has a dedicated team to enhance the provision of aftercare services for overseas and Mainland companies in Hong Kong. The team has developed a programme to reach out to companies in a structured and systematic manner. The programme includes holding strategic discussions with key personnel to help them consider and evaluate new areas and opportunities for growth, particularly those arising from the Guangdong-Hong Kong-Macao Greater Bay Area (Greater Bay Area) development, the Belt and Road Initiative and innovation and technology development.

InvestHK’s aftercare programme also extends to meetings with the headquarters of its client companies. Such meetings affirm Hong Kong’s commitment to supporting investors from outside Hong Kong and to give the senior management of the companies concerned the confidence to continue doing business in Hong Kong.

Despite the travel restrictions arising from the COVID-19 pandemic, InvestHK continues to hold conferences and round-tables via virtual platforms with senior business leaders round the world to update them on Hong Kong’s business environment and Government policies. These help to retain foreign companies’ interest and confidence in Hong Kong as a place for investment and doing business.

(3) InvestHK is committed to promoting Hong Kong as a prime investment destination and encouraging overseas and Mainland companies to establish operations, in particular regional headquarters and regional offices, in Hong Kong. To this end, InvestHK will continue to:

(i) strengthen global investment promotion efforts by focusing on the business opportunities arising from the Association of Southeast Asian Nations, the Greater Bay Area development and the Belt and Road Initiative;

(ii) strengthen aftercare services for overseas and Mainland companies in Hong Kong to facilitate expansion; and

(iii) focus on priority sectors such as financial services, family offices, transport and logistics, innovation and technology as well as creative industries.

In meeting the challenges of the COVID-19 pandemic, InvestHK has been dynamically adjusting its strategies by leveraging digital platforms to attract and assist companies from both traditional and emerging markets to set up their businesses in Hong Kong. In addition, the Chief Executive announced in the 2020 Policy Address the establishment of the Pan-Greater Bay Area Inward Investment Liaison Group. This set-up would enable InvestHK and its counterparts in other cities in the Greater Bay Area to develop holistic and joint inward investment propositions with a view to enhancing synergy.

Publish Date:2021-2-24

Speech on Motion on “Thanks”(2020.11.18)

In Chinese Only

Publish Date:2021-1-20

Council Meetings (Questions): Crimes of online financial fraud (2021.1.6)

Question:

From time to time in recent years, there have been fraudsters creating websites, social media groups and mobile applications disguised as those of banks, securities firms, insurance companies and insurance intermediaries, who then trick customers of such financial institutions into logging in them, so as to steal the personal data and financial assets of these customers. Regarding crimes of online financial fraud, will the Government inform this Council:

(1) of the respective numbers of reports and requests for assistance regarding online financial fraud received by the Police in each of the past three years, and the total value of the assets involved in these cases; the number of the relevant law enforcement operations by the Police, and the number of persons arrested;

(2) whether the Hong Kong Monetary Authority (HKMA) will set up a task force in collaboration with the Securities and Futures Commission and the Insurance Authority to look into the causes for crimes of online financial fraud becoming increasingly rampant and explore means to combat such crimes (such as imposing heavier penalties); and

(3) of the measures put in place by the Cyber Security and Technology Crime Bureau of the Hong Kong Police Force as well as the HKMA to step up efforts in combating crimes of online financial fraud?

Reply:

President,

As an international financial centre, the provision of safe, efficient and innovative online financial services is conducive to the inclusive development of the financial industry in Hong Kong. Over the past year, we have noticed the broader application of financial technology and development of online financial services by financial institutions due to the pandemic situation. Regulatory authorities, including the Hong Kong Monetary Authority (HKMA), the Securities and Futures Commission (SFC) and the Insurance Authority (IA), have been assessing the risks associated with financial technology and related service development, while continuously monitoring cyber security and the security of financial institutions’ computer systems, with a view to protecting the interests of customers and investors. They have also promulgated supervisory guidelines or codes of practice on technology risk management and security measures for online financial services provided by financial institutions and financial institutions are required to take adequate precautionary measures.

The Hong Kong Police Force (the Police) has maintained close co-operation with regulatory authorities to combat online fraud cases. To protect the public from fraudulent financial websites, upon receipt of reports on such websites regulatory authorities will make prompt announcements to alert the public and refer the cases and provide necessary assistance to the Police for investigation.

Having consulted the Security Bureau, our specific response to the various parts of the question is as follows:

(1) According to the figures kept by the Police, in respect of online fraud (including online business fraud, email scam, social media scam, etc.), in the past three years (as at October 31, 2020) the Police recorded 6 354, 5 157 and 8 843 cases respectively, involving losses of about $2 600 million, $2 900 million and $2 400 million respectively.

The Police does not maintain breakdown of figures relating to online financial fraud as requested in the question.

(2) The HKMA, the SFC and the IA meet regularly through different platforms to discuss issues relating to the development and regulation of the financial services industry, which include financial technology crimes and cyber security. They will also share information and exchange views on industry best practices and appropriate regulatory model in response to the latest technological development and operational risks. The regulatory authorities will review the regulatory requirements related to financial technology regularly and update the relevant guidelines in a timely manner to increase the sector’s capability in safeguarding against online crimes. They also work closely with the enforcement authorities to step up efforts in combating relevant crimes.

(3) To combat online fraud effectively, the Police has adopted a multi-pronged strategy with focus on three aspects, covering intelligence exchange and enforcement actions, inter-agency co-operation, and enhanced publicity and education.

Regarding intelligence exchange and law enforcement operations, to help officers better understand the latest trends of and investigation techniques for online fraud, the Police proactively exchanges intelligence and conducts working meetings with Mainland and overseas law enforcement agencies. The Cyber Security and Technology Crime Bureau (CSTCB) of the Police has also been exchanging intelligence with Interpol and other law enforcement agencies, with a view to combatting cross-boundary online fraud through international co-operation.

As for inter-agency co-operation, the Cyber Security Centre under the CSTCB provides support to various critical infrastructure in Hong Kong (including facilities from the financial sector), and also conducts regular meetings with the HKMA, the Hong Kong Association of Banks (HKAB), and the banking sector to examine risks arising from security incidents of online banking and cyber security of the banking sector, with a view to raising the industry’s awareness in enhancing cyber security and preventing crime. Besides, the Commercial Crime Bureau (CCB) of the Police maintains close liaison with regulatory authorities, government departments and various stakeholders to discuss crime trends and typologies. The CCB also co-operates with the banking sector to intercept payments to fraudsters with a view to minimising the loss of victims.

On publicity and education, the Police regularly produces short videos and anti-crime information, and makes use of traditional media and online platforms to alert the public to the latest typologies of fraudsters and disseminate anti-crime messages.

To further strengthen the combat against deception cases and raise the public’s anti-deception awareness, the CCB of the Police established the Anti-Deception Coordination Centre (ADCC) in 2017 to monitor and analyse the trends of deception cases, formulate and implement combating strategies, and co-ordinate anti-deception publicity work. The ADCC also operates a 24-hour hotline, “Anti-Scam Helpline 18222” and co-operate with the banking sector to intercept payments to fraudsters, so as to minimise the loss of victims. Meanwhile, the CCB has set up the Fraud and Money Laundering Intelligence Taskforce, which exchanges information and shares intelligence with the HKMA, the HKAB and the banking sector for preventing and deterring criminals from exploiting bank accounts for fraud and money laundering activities.

In addition to the Police, the HKMA has also imposed stringent guidelines requiring banks to take effective measures to manage the risk of fraud. The HKMA has also taken a series of measures to assist members of the public to identify fraudsters impersonating as banks, such as requiring banks to provide customer hotlines for the public to verify the identity of callers claiming to represent banks, and reminding the public through different channels including educational videos, social media and seminars on issues to watch out when using online banking services.

In light of the heightened threat of cyber security during the pandemic, the regulatory authorities (including the HKMA, the SFC and the IA) have stepped up efforts to remind the public to stay vigilant to the possible deceptive acts by fraudsters. Separately, the HKAB established in May last year the Fraud Risk Management Taskforce, which has launched public educational activities on the prevention of online financial fraud and other scams, and to remind the public of the common fraud typologies and preventive strategies.

Thank you President.

Publish Date:2021-1-6

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