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Hong Kong Government Launches Two Consultations On Legislative Proposals To Enhance Regime For Combatting Money Laundering And Terrorist Financing

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Hong Kong Government Launches Two Consultations On Legislative Proposals To Enhance Regime For Combatting Money Laundering And Terrorist Financing

Earlier this month, the Hong Kong government launched two consultations on legislative proposals aimed at bringing Hong Kong in line with international standards for combatting money laundering and terrorist financing.  With a mutual evaluation of Hong Kong’s regime with other members of the Financial Action Task Force (FATF) looming in 2018, the government is keen to ensure that Hong Kong’s regime aligns with the FATF’s standards.  The consultations will last for two months and will end on 5 March 2017.  Subject to the views and comments received, the government aims to introduce the proposed reforms into the Legislative Council in the second quarter of 2017.

One consultation paper proposes to amend the Companies Ordinance to enhance the transparency of beneficial ownership of Hong Kong incorporated companies.  Under the proposals, all Hong Kong incorporated companies (other than listed companies who will be exempt) will be required to obtain and hold beneficial ownership information, which will be available for public inspection.  The regime will be backed by criminal sanctions for non-compliance.

The other consultation paper proposes to extend customer due diligence (CDD) and relevant record-keeping requirements to designated non-financial businesses and professions (DNFBPs), when they engage in "specified transactions".  They include solicitors, accountants, real estate agents and trust or company service providers (TCSPs). 

The proposals are intended to be implemented by extending the application of the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance, which currently only apply to specified financial institutions. 

It is also proposes that a licensing regime be introduced for TCSPs, which (unlike the other DNFBPs) are not currently subject to any regulatory regime.

Source: Conventus Law

By Pathay Singh on 02/02/17