Financial Crime World

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What is Money Laundering? In Hong Kong

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As Hong Kong’s digital banking services and online trading of equities and exchange-traded funds (ETFs) continue to grow in popularity, financial institutions and regulated entities are taking steps to protect people and businesses from money laundering and terrorist financing. But what exactly is money laundering?

Definition and Impact

Money laundering refers to the process of concealing the illegal origin of income from crimes, while terrorist financing involves collecting funds for terrorism. These activities have a significant impact on a country’s society and economy, as well as international financial systems.

Combating Money Laundering and Terrorist Financing

To combat these threats, Hong Kong has implemented anti-money laundering (AML) and combating the financing of terrorism (CFT) procedures. The first step in this process is known as know your customer (KYC), which involves gathering personal data about clients and verifying its accuracy.

Hong Kong KYC Requirements

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According to Hong Kong regulations, the following ID data are required for identifying natural persons:

  • Full Name
  • Date of Birth
  • Nationality
  • Unique Identification Number (e.g. identity card number or passport number) and document type

Identity Verification

The following documents can be used to verify one’s identity in Hong Kong:

  • National Identity Card (HKID)
  • Driver’s Licence
  • Passport

Address Verification

The following documents are considered as proof of address in Hong Kong:

  • A current utility bill (such as gas, electricity, telephone or mobile phone bill) issued no later than three months ago with the client’s address and name;
  • Bank statement issued no more than three months ago that shows the End-user’s address and name;
  • Document issued by a government department that shows the applicant’s name and address.

Hong Kong Fintech 2025 Strategy

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In June 2021, the HKMA released a strategy to complete the digitalization of financial institutions by 2025. The strategy aims to enhance the country’s anti-money laundering and fraud prevention measures in response to the increased risk of money laundering and fraud challenges that may arise with the digitalization of financial services.

Lanturn Conducts KYC & AML Checks in Hong Kong

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In a rapidly evolving Hong Kong financial industry, it is crucial for businesses to stay up-to-date and comply with the country’s guidelines. Lanturn can assist clients not only with fund formation and administration services but also with conducting KYC & AML checks as part of any risk management strategy.

Our KYC & AML Checks

Our KYC & AML checks come in two tiers: basic checks, which involve verifying the information obtained on the identity of potential/ existing clients, shareholders, and investors; and enhanced checks, which provide a deeper understanding of the target individual/entity’s activities to mitigate associated risks.