Anti-money Laundering Laws (HK) [ 中文 ]

Policy Formulation and Law Enforcement

 

1. Overview: Anti-Money Laundering and Countering Financing Terrorism in Hong Kong [Home Page, the FSTB]
2. United Nations Security Council Sanctions - Implementation in Hong Kong [Read]

 

Pieces of legislation relating to anti-money laundering and anti-terrorist financing: -

1. Drug Trafficking (Recovery Of Proceeds) Ordinance (Cap. 405)  [Read]
2. Organized and Serious Crime Ordinance (Cap. 455)  [Read]
3. Weapons of Mass Destruction (Control of Provision of Services) Ordinance (Cap. 526) [Read]
4. United Nations Sanctions Ordinance (Cap. 537) [Read]
5. Weapons of Mass Destruction (Control of Provision of Services) Ordinance (Cap. 526) [Read]
6. United Nations (Anti-Terrorism Measures) Ordinance (Cap. 575)  [Read]
7. Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance (Cap. 615)  [Read]

 

Flowchart Analysis

• Schedule 2 - Contents in Divisions 1 and 2, Part 2, Schedule 2, AMLO

Part 2	Customer Due Diligence (CDD)
Division 1	General		Division 2	Special requirements
Section 2	What are CDD measures		Section 8	Requirements in this Division additional to those in section 3 and section 5 of this Schedule
Section 3	When CDD measures must be carried out, and the exceptions		Section 9	Special requirements when customer is not physically present for identification purposes
Section 3(1A)(1B)	Exception to S3(1)(b)		Section 10	Special requirements when the customer is a PEP
Section 3(1B)	Exception to S3(1)(b)		Section 11	Special requirement for insurance policies
Section 3(2)	Exception to S3(1)(a)		Section 12	Special requirement for wire transfers
Section4	Simplified customer due diligence		Section 13	Special requirement for remittance transactions
Section 5	Duty to continuously monitor business relationships		Section 13A	Special requirement for virtual asset transfer
Section 6	Provisions relating to pre-existing customers		Section 14	Special requirement for correspondent banking relationships
Section 7	Provisions relating to pre-existing respondent banks		Section 15	Special requirements in other high-risk situations

 

Law Enforcement

The Hong Kong Police Force (HKPF), the ICAC, and the Customs and Excise Department (C&ED) are the law enforcement agencies of the Ordinance (Cap. 537). Generally speaking, the HKPF is mainly responsible for enforcement work related to the financial sanction and sanctions on financial transactions or transfer of funds, while the C&ED is mainly responsible for enforcement against the supply, sale or transfer of arms and other items subject to sanction. The two law enforcement agencies have been acting in accordance with the law, without fear or favour, to follow up on suspected violations of the Ordinance.

Under the Anti-Money Laundering and Counter-Terrorists Financing Ordinance (Cap. 615, the AMLO), the C&ED also regulates the  activities dealing in precious metals and stones (PMS) under Part 5C of the AMLO.

 

Industrial Sector Laws

1. Banking Ordinance (Cap. 155)  [Read]
2. Securities and Futures Ordinance (Cap. 571, SFO)  [Read]
3. Insurance Companies Ordinance (Cap. 41)  [Read]
4. Anti-Money Laundering & Counter-Terrorist Financing Ordinance (Cap. 615) [Read] (the AMLO for short)

 

Regulation of Dealings in Precious Metals and Stones

There is an intersection of regulation under the SFO and Part 5C of the AMLO, for which the analysis is set out in what follows.

The regulatory framework for licensed corporations may overlap with the PMS regime in certain circumstances. However, a licensed corporation may be exempt from PMS registration, while remaining subject to its own applicable regulatory obligations.

In general, 

 

Regulator's guidelines - Companies Registry, Hong Kong Monetary Authority (HKMA), Securities and Futures Commission (SFC), the Office of the Commissioner for Insurance (OCI) 

1. Guideline on Compliance with Anti-Money Laundering & Counter Terrorist Financing for Trust & Company Service Providers, Companies Registry [read];
2. Guideline on Anti-Money Laundering and Counter-Terrorist Financing, HKMA   [Read];
3. Guidance Paper on Combatting Trade-Based Money Laundering, HKMA   [Read];
4. Guidance Paper on Anti-money Laundering Controls over Tax Evasion, HKMA   [Read];
5. Prevention of Money Laundering and Terrorist Financing Guideline, SFC  [Read];
6. Guidance on Anti-money Laundering and Counter-Terrorist Financing, OCI  [Read]

 

Law Enforcement Agents in Hong Kong

1. Joint Financial Intelligence Unit (JFIU);  [Read]
2. Hong Kong Excise & Customs Department;  [Read]
3. Hong Kong Police [Read]

 

International Anti-money Laundering and Terrorist Financing Organization

1. Asia/Pacific Group on Money Laundering  [Read];
2. Financial Action Task Force (FATF)  [Read]

 

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Introduction

The Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance, Cap. 615 (AMLO) came into operation on 1 April 2012. Under the AMLO, a person who wishes to operate a remittance and/or money-changing service (i.e. money service as defined under the AMLO) is required to apply for a licence from the Commissioner of Customs & Excise (CCE). Operating a money service without obtaining a money service operator licence from the CCE is an offence, and liable to a fine of $100,000 and imprisonment for six months.

 

Legal definitions

The following definitions are provided under the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance (Chapter 615)

 

Schedule 1

 

Money laundering (洗錢) means an act intended to have the effect of making any property—

(a)    that is the proceeds obtained from the commission of an indictable offence under the laws of Hong Kong, or of any conduct which if it had occurred in Hong Kong would constitute an indictable offence under the laws of Hong Kong; or

(b)    that in whole or in part, directly or indirectly, represents such proceeds, not to appear to be or so represent such proceeds.

 

Money service (金錢服務) means—

(a)    a money-changing service; or

(b)    a remittance service

 

Money changing service (貨幣兌換服務) means a service for the exchanging of currencies that is operated in Hong Kong as a business, but does not include such a service that is operated by a person who manages a hotel if the service—

(a)    is operated within the premises of the hotel primarily for the convenience of guests of the hotel; and

(b)    consists solely of transactions for the purchase by that person of non-Hong Kong currencies in exchange for Hong Kong currency

 

Remittance service (匯款服務) means a service of one or more of the following that is operated in Hong Kong as a business—

(a)    sending, or arranging for the sending of, money to a place outside Hong Kong;

(b)    receiving, or arranging for the receipt of, money from a place outside Hong Kong;

(c)     arranging for the receipt of money in a place outside Hong Kong

 

Currency (货币)includes a check or a traveller's check.

Money (金錢) means money in whatever form or currency;

 

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