Updates on Hong Kong’s anti-money laundering laws
| Date | 02 July 2018 |
| Published date | 02 July 2018 |
| Pages | 290-296 |
| DOI | https://doi.org/10.1108/JMLC-07-2017-0028 |
| Author | Foster Hong-Cheuk Yim,Ian Philip Lee |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
Updates on Hong Kong’s
anti-money laundering laws
Foster Hong-Cheuk Yim
Liberty Chambers, Hong Kong, and
Ian Philip Lee
The Hong Kong Polytechnic University, Hung Hom, Hong Kong
Abstract
Purpose –The purpose of thisstudy is to discuss the latest developments of anti-moneylaundering (AML)
laws in terms of case law and intended legislationamendments.
Design/methodology/approach –In terms of AML case law, the authorsanalyze three judgments from
the Hong Kong Court of Final Appeal. In terms of the intended legislationamendments, the authors outline
salient pointsfrom the two amendment bills submitted to the Legislative Council of Hong Kong.
Findings –With the developments in AML case law and the intended legislationamendments, Hong Kong
is expected to have a positive result in the Financial Action Task Force Mutual Evaluation in October/
November2018.
Originality/value –A robust AML/counter-terrorist financing regime is the bedrock of Hong Kong’s
reputable status as an international financial center. This paper seeks to illicit meaningful interactions
amongst all stakeholders.
Keywords Hong Kong, Anti-money laundering (AML), Beneficial ownership information,
Customer due diligence (CCD), Designated non-financial businesses and professions (DNFBPs)
Paper type Technical paper
1. Introduction
The Financial ActionTask Force (FATF) is an inter-government body established in 1989to
set standards and promote effective implementation of measures to combat money
laundering, terrorist financing and other related threats to the integrity of the international
financial system [Financial Action Task Force (FATF), 2017]. The FATF has developed a
set of 40 recommendations (FATF and APG, 2016),which are recognized as the global anti-
money laundering (AML)and counter-terrorist financing (CTF) standard.
Hong Kong has been a member of the FATF since 1991. To maintainits reputation as an
international financial center, HongKong is keen to do well in the upcoming FATF Mutual
Evaluation scheduled in October/November 2018 (FATF, 2017). Based on a gap analysis
(FSTB, 2017a, p. 2) between the FATF recommendations and Hong Kong’s current AML/
CTF regime, key deficiencies were identified which included the absence of statutory
customer due diligence (CDD) and record-keepingrequirements for designated non-financial
businesses and professions (DNFBPs) when they engage in specified transactions. There
were also no statutory requirements for companies to keep beneficial ownership
information.
Similar deficiencies werehighlighted in the FATF Mutual Evaluation report for the USA
(FATF and APG, 2016, pp. 3-5) after their on-site assessments were conducted in January/
February 2016. To avoid similar findings,these regulatory gaps must be filled. As such, the
Hong Kong Government proposed amendments to the relevant legislations, conducted
JMLC
21,3
290
Journalof Money Laundering
Control
Vol.21 No. 3, 2018
pp. 290-296
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-07-2017-0028
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