Financial Crime World

Hong Kong Tightens Anti-Money Laundering Regulations to Combat Financial Crime

Hong Kong has introduced a series of legislation aimed at preventing the flow of illicit funds and combating terrorism by strengthening its anti-money laundering (AML) regime.

Stricter Regulations for Financial Institutions and Designated Non-Financial Businesses and Professions

The new regulations require financial institutions and designated non-financial businesses and professions to adhere to stricter customer due diligence and record-keeping requirements. This includes:

  • Conducting thorough customer due diligence
  • Maintaining accurate records of all transactions
  • Reporting suspicious transactions

Key Legislation: Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO)

The AMLO sets out the statutory requirements for financial institutions and designated non-financial businesses and professions. To operate in Hong Kong, these entities must:

  • Apply for a license from the Companies Registry
  • Pass a “fit-and-proper” test before issuing a permit

Other Key Legislation

Other legislation aimed at combating financial crime includes:

  • Drug Trafficking (Recovery of Proceeds) Ordinance (DTROPO): Provides for the tracing, confiscation and recovery of drug trafficking proceeds.
  • Organized and Serious Crimes Ordinance (OSCO): Allows authorities to investigate organized crimes and seize assets linked to criminal activity. Both ordinances impose a universal obligation on suspicious transaction reporting on all persons and entities if they have knowledge or suspicion that criminal proceeds are involved in any transactions.

United Nations Resolutions

Hong Kong has also implemented UN resolutions aimed at combating terrorism, including:

  • United Nations (Anti-Terrorism Measures) Ordinance (UNATMO): Implements measures for the prevention of terrorist acts.
  • United Nations (Anti-Terrorism Measures) (Amendment) Ordinance 2018: Prohibits dealings with specified terrorist property and criminalises financing of travel for terrorist purposes. The amendments came into effect on May 31, 2018.

Weapons of Mass Destruction Control

The Weapons of Mass Destruction (Control of Provision of Services) Ordinance (WMDO) prohibits the provision of services that could assist in the development or production of weapons of mass destruction.

Commitment to Maintaining Hong Kong’s Status as a Leading International Financial Center

Hong Kong’s anti-money laundering regulations are designed to protect the city’s financial system from illegal activities and prevent the flow of illicit funds. The new measures demonstrate the government’s commitment to maintaining Hong Kong’s status as a leading international financial center while ensuring that it remains a safe and secure place for businesses and individuals to operate.