Financial Crime World

Title: HKICS Releases New Guideline on Anti-Money Laundering and Counter-Terrorist Financing in Hong Kong

Overview

The Hong Kong Institute of Chartered Secretaries (HKICS) has issued an updated Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) Guideline to help financial institutions (FIs) and relevant professionals in Hong Kong effectively prevent money laundering and terrorist financing.

About HKICS

  • The Hong Kong Institute of Chartered Secretaries (HKICS) is an independent professional body.
  • It promotes good governance policies and develops the Chartered Secretary profession in Hong Kong and Mainland China.
  • Established in 1949, HKICS has grown to over 5,800 members and 3,200 students.
  • The organization is a member of the Corporate Secretaries International Association (CSIA).

The Importance of AML/CFT Measures

  • Hong Kong continues to be a significant financial hub.
  • Effective AML/CFT measures are crucial to maintaining Hong Kong’s reputation as an international financial center.
  • FIs and their employees must be familiar with local and international legislations addressing money laundering and terrorist financing.

Key Topics Covered in the AML/CFT Guideline

  1. AML/CFT systems
  2. Risk-based approach
  3. Customer due diligence
  4. Ongoing monitoring
  5. Financial sanctions

Stages of Money Laundering and terrorist financing

  1. Placement: Criminal organizations and terrorist groups move illicit funds into the financial system.
  2. Layering: They use complex transactions to obscure the source of the funds.
  3. Integration: The funds are presented as legitimate assets.

Legislation Addressing Money Laundering and Terrorist Financing

  • AMLO: Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance (AMLO)
  • DTROP: Drug Trafficking (Recovery of Proceeds) Ordinance (DTROP)
  • OSCO: Organized and Serious Crimes Ordinance (OSCO)
  • UNATMO: United Nations (Anti-Terrorism Measures) Ordinance (UNATMO)
  • UNSO: United Nations Sanctions Ordinance (UNSO)

Practical Tips for Preventing Money Laundering and Terrorist Financing

  • FIs and their employees must understand their roles in preventing money laundering and terrorist financing.
  • Comply with local and international legislations.
  • Stay informed about potential threats and suspicious activities.

Conclusion

  • The HKICS AML/CFT Guideline provides essential information for FIs and relevant professionals.
  • Adhering to these guidelines helps maintain Hong Kong’s reputation as an international financial center and ensures cooperation with regulatory authorities to combat financial crimes.