Hong Kong Moves to Introduce New AML Law for Financial Services

Firms operating in Hong Kong need to ensure their radars are attuned to significant changes imminent in the AML landscape. The Hong Kong Authorities have responded to a FATF Evaluation by proposing the introduction of statutory requirements and sanctions linked to CDD and record keeping for financial institutions. Remittance agents and money changers will also be bought under a new regulatory framework.

The FATF Evaluation of July 2008 provided a largely positive review of efforts to combat money laundering in Hong Kong. However, several areas for improvement were identified, particularly the fact that the key AML/CTF requirements are currently in the form of non-statutory guidance.

The Hong Kong Financial Services & Treasury Bureau (FSTB) has set out the elements of the proposed AML legislation, these include:

• CDD requirements in line with international standards
• Regulatory guidance to be issued
• Regulatory authorities to supervise firms and have the power to request information, conduct visits and issue regulatory sanctions
• New offences for non compliance by firms. The offences will only be committed if the breach is committed ‘without reasonable excuse’
• Remittance agents and money changers will be subject to a licensing regime and a new fit and proper test

The consultation process has recently closed and the draft legislation is expected to be put before the Legislative Council in the second quarter of 2010.

Pekka Dare is the Global Head of AML and Financial Crime at the International Compliance Association (ICA). The ICA offers internationally recognised professional qualifications in AML, Compliance and Financial Crime Prevention that are a benchmark of competence and excellence. ICA is currently enrolling for the ICA International Diploma in Anti Money Laundering   in Jersey, Guernsey and the Isle of Man and the Diplomas in Compliance and Financial Crime Prevention will run early in the new year. For more information see www.int-comp.org , email ict@int-comp.com or call 0121 362 7534.

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