The Government has issued two consultation papers to address perceived deficiencies in Hong Kong’s anti-money laundering and terrorist financing (AML) regime prior to a Financial Action Task Force (FATF) review due next year.
The Government is inviting comments on the following to be submitted on or before 5 March 2017:
The paper on beneficial ownership proposes creating a regime under the Companies Ordinance “to enable beneficial ownership information of companies to be captured and maintained so as to serve the purpose of allowing law enforcement agencies timely access to such information when necessary”. The consultation paper comments that listed companies will be exempt as they are already subject to relevant controls but continues: “At present, we do not intend to exempt any other particular class of companies, unless a case can be made for exemption on the basis that the companies are bound by disclosure and transparency rules broadly similar to the ones being proposed in relation to beneficial ownership.” Therefore, under the current proposals, companies licensed and regulated by the Securities and Futures Commission will be subject to the new regime in addition to the existing substantial shareholder approval framework under the Securities and Futures Ordinance and subsidiary legislation.
The second paper proposes extending customer due diligence and record-keeping requirements for specified transactions to designated non-financial businesses and professions such as solicitors, accountants, real estate agents, and trust or company service providers. For trust or company service providers, the proposals include a licensing regime, operated by the Registrar of Companies, with a “fit and proper” test for applicants.
With the FATF evaluation looming, the Government is likely to introduce draft legislation without delay.