Updates on Hong Kong’s anti-money laundering laws

Author:Foster Hong-Cheuk Yim, Ian Philip Lee
Position:Liberty Chambers, Hong Kong

Purpose The purpose of this study is to discuss the latest developments of anti-money laundering (AML) laws in terms of case law and intended legislation amendments. Design/methodology/approach In terms of AML case law, the authors analyze three judgments from the Hong Kong Court of Final Appeal. In terms of the intended legislation amendments, the authors outline salient points... (see full summary)

Updates on Hong Kongs
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
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/
Originality/value A robust AML/counter-terrorist nancing regime is the bedrock of Hong Kongs
reputable status as an international nancial center. This paper seeks to illicit meaningful interactions
amongst all stakeholders.
Keywords Hong Kong, Anti-money laundering (AML), Benecial ownership information,
Customer due diligence (CCD), Designated non-nancial 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 nancing and other related threats to the integrity of the international
nancial 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 nancing (CTF) standard.
Hong Kong has been a member of the FATF since 1991. To maintainits reputation as an
international nancial 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 Kongs current AML/
CTF regime, key deciencies were identied which included the absence of statutory
customer due diligence (CDD) and record-keepingrequirements for designated non-nancial
businesses and professions (DNFBPs) when they engage in specied transactions. There
were also no statutory requirements for companies to keep benecial ownership
Similar deciencies 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 ndings,these regulatory gaps must be lled. As such, the
Hong Kong Government proposed amendments to the relevant legislations, conducted
Journalof Money Laundering
Vol.21 No. 3, 2018
pp. 290-296
© Emerald Publishing Limited
DOI 10.1108/JMLC-07-2017-0028
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