CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Hong Kong To Implement AML Guidelines

Hong Kong To Implement AML Guidelines

by Mary Swire, Tax-News.com, Hong Kong

01 February 2012


Following the release of a set of consultation conclusions, Hong Kong’s Securities and Futures Commission (SFC) has announced the gazetting of a new set of guidelines on anti-money laundering (AML) and counter-terrorist financing (CFT), which will take effect on April 1, 2012.

The new guidelines, which will replace the existing Prevention on Money Laundering and Terrorist Financing Guidance Note published by the SFC, provide guidance to the financial industry relating to, amongst other things, the operation of the relevant provisions of the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance (AMLO).

The enacted AMLO was gazetted on July 8, 2011, after two rounds of consultation conducted by Hong Kong’s Financial Services and Treasury Bureau. Its purpose is to enhance the AML/CTF regime in Hong Kong's financial sector, so as to meet the latest international standards, especially in respect of customer due diligence (CDD) and record keeping.

On September 30, 2011, the SFC launched a consultation to invite comments on the then-proposed guidelines, and then received submissions from industry practitioners, trade associations and professional bodies in response before the expiry date of November 18. Respondents generally found the guidelines helpful, and some sought clarification on specific matters and adaptation of certain requirements to facilitate compliance.

The SFC amended the draft guidelines in a number of areas to address comments whilst ensuring that they remain in line with international AML/CFT standards, and they will now provide a uniform set of requirements applicable to all financial institutions (FIs) in the banking, securities, insurance and remittance and money changing sectors.

Their key objective is to assist licensed corporations in designing and implementing appropriate and effective AML policies, procedures and controls, so as to comply with the new regulatory requirements. It is recognised that supplementary or sector-specific guidance may be necessary or appropriate for the different sectors, but the generic guidelines are considered as adequate and appropriate to the securities sector.

Given the significant differences that exist in the organizational and legal structures of different FIs, as well as the nature and scope of the business activities conducted by them, it is therefore accepted that there exists no single set of universally-applicable implementation measures. As such, the senior management of FIs may tailor-make these measures to their particular business risk profile, but, where there are to be departures from the generic guidance provided, FIs should document the rationale for so doing and be prepared to justify them.

Extensive guidance is also provided on CDD requirements for FIs under the AMLO, and how they can be met. It lists out the steps an FI should take when carrying out CDD and cites examples of relevant information that should be obtained.

Detailed guidance is further given in relation to CDD to be conducted according to different types of customers (for example, individuals, corporations and partnerships); on beneficial owners, persons purporting to act on behalf of customers and pre-existing customers; the timing of identification and verification of identity; and keeping customer information up-to-date.

A comprehensive report in our Intelligence Report series, analysing the situation on the ground in each of the main offshore banking centres, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report3.asp
TAGS: money-laundering | compliance | investment | business | law | banking | insurance | offshore | offshore banking | Hong Kong | standards | regulation

To see today's news, click here.

 















Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »