AML/CFT regulations in Hong Kong

As a free-market, international finance and trade hub, Hong Kong faces a significant risk of money laundering carried out  as tax evasion, corruption, fraud and other criminal conducts that take advantage of its developed financial infrastructure. These threats are, to some degree, matched by its sophisticated anti-money laundering and terrorist financing regulations and enforcement.

Hong Kong Monetary Authority (HKMA)​

In practice, the Hong Kong Monetary Authority (HKMA) is the territory’s main Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) regulator  and is responsible in maintaining its financial system. Through the enforcement of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) and the Banking Ordinance (BO), the HKMA obliges financial institutions (which include licensed money service operators, authorised insurance brokers, appointed insurance agents, among others) with the following requirements:

1. Conducting customer due diligence (CDD): CDD needs to be conducted primarily to determine or confirm the customer’s identity, nature of business, and its beneficial owners. An institution should conduct CDD at the beginning of the business relationship, before executing any large transaction (at least HKD 8,000 for wire transfers and HKD 120,000 for any other transactions), and whenever it suspects a customer of engaging in suspicious activity. The HKMA recommends that institutions apply different levels and thoroughness of CDD appropriate to each customer’s risk level. Its guideline lays out simplified due diligence for low-risk customers.
2. Transaction Monitoring: Institutions must have a monitoring system that catches suspicious transactions such as transfers to high-risk offshore jurisdictions and series of transfers of unusual patterns. If an institution suspects that a customer is engaging in activities that may violate the AMLO, it is required to file a Suspicious Transaction Report (STR) to the Joint Financial Intelligence Unit. The failure to report an offence is punishable to HKD 50,000 in fine and 3-month imprisonment.
   
3. Record-keeping: CDD data, transaction records and other relevant information must be kept throughout the course of the relationship with the customer and five years after it has ended. In general, infringement to the AMLO carries a maximum penalty of HKD 1 million in fine and two years of imprisonment. How can MemberCheck help - Common information should be on all country pages (No need to change)Our clients are provided with a secure and simple solution in regard to scanning for politically exposed or high-risk individuals, as well as checking names against sanction, regulatory law enforcement, and other official lists.Use our sophisticated due diligence workflow and parameter filters to reduce the amount of time you spend sorting through false positives. Our scan history and reporting sections allow you to access client details  at any time required, as well as download PDF reports to prove your due diligence decisions.