Hong Kong loophole may have helped Fifa suspect funnel cash
Monetary Authority did not rate officials in charge of world soccer as high-risk persons
A top-ranking Fifa official accused in connection with a global corruption and money laundering scandal engulfing world soccer may have been able to move cash through banks in Hong Kong as he was not deemed high-risk.
Sources confirmed that officials from soccer's governing bodies, such as Fifa, were not considered what are known as "politically exposed persons" under Hong Kong Monetary Authority guidelines.
If they were, any transactions linked to them or their associates would immediately trigger much stricter due diligence procedures than normal.
Hong Kong's role in the Fifa scandal emerged last week when US justice officials revealed that at least one senior official from the organisation had allegedly funnelled bribes through a bank account in the city.
Using a front company set up in the city and an HSBC account here, Fifa official Costas Takkas, 58, allegedly moved US$1.2 million in suspect payments received from a sports marketing conglomerate in Brazil.
According to international money laundering experts, Takkas - and the other eight officials now under arrest and awaiting extradition to the United States from Switzerland - should have been classified as "politically exposed persons".
"From a risk-based perspective, Fifa executives ought to be treated exactly the same as politically exposed persons," said Bill Majcher, a former financial crimes investigator with federal law enforcement agencies in the US and Canada.
"Fifa is effectively a non-governmental organisation, but because of the amount of influence it has over public works projects in member countries, as well as the history of allegations of corruption, its executives should be treated as high-risk," Majcher said.
Asked whether officials from the organisation governing world soccer were considered politically exposed persons, a spokesperson for the Hong Kong Monetary Authority said last night that it would not comment on individual cases.
The latest concerns come a day after HKMA deputy chief executive Arthur Yuen Kwok-hang admitted that a number of banks in the city were under investigation over "deficiencies'' in their anti-money laundering procedures.
In December, Swiss lawmakers passed legislation that formally classed executives and employees of sporting federations as politically exposed people, a move aimed at allowing more scrutiny of sports officials.
Peter Gallo, a noted money-laundering expert and former due diligence specialist at Kroll Associates, earlier said that any accounts connected to Fifa officials should have been flagged as higher risk.
"Few people will really be surprised to see the word 'corruption' in a headline about Fifa. The organisation has had a reputation as being tainted by corruption for as long as I can remember," Gallo said.
