Hong Kong Consults Money Changers On Lowering KYC Threshold

by Mary Swire, for LawAndTax-News.com, Hong Kong

23 October 2006

The Hong Kong Security Bureau's Narcotics Division is seeking remittance agents and money changers' views on a proposal to lower the threshold for verification of a customer's identity and record keeping from $20,000 to $8,000, it emerged last week.

The proposal aims to enhance the effectiveness of Hong Kong's anti-money laundering and counter-terrorist financing regime. It is in response to the Special Recommendation VII of the Financial Action Task Force on Money Laundering, the international anti-money laundering standard-setter.

Approximately 1,700 remittance agents and money changers would be required to verify customer identity and keep records of transactions over $8,000 under the proposed rule.

Remittance agents would also be required to record and retain particulars of the sender and the instructor of a remittance transaction if the two are not the same person, and would be encouraged to take an additional step to combat terrorist financing more effectively by including the sender's information in the message accompanying the remittance.

Local remittance agents and money changers have been invited by the Narcotics Department to forward their views and comments in writing by November 20.

It is anticipated that the requirements will also be implemented by the banking industry in January.

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