Will HK's new AML rules have the desired deterrent effect?

Author: Karry Lai | Published: 21 Mar 2018

The Hong Kong Securities and Futures Commission’s (SFC) new anti-money laundering (AML) guidelines have been prompted by the upcoming assessment of its regime by the Financial Action Task Force (FATF), scheduled for later this year. Transparency of beneficial ownership and control of legal entities will likely take central focus as Hong Kong extends AML oversight to a broader scope of organisations. 

But recent enforcement trends may paint a different picture.

Widened application of the AMLO

In addition to financial institutions, the Anti-Money Laundering and Counter-Terrorist Finance Ordinance (AMLO) now applies to a wider group of entities than financial institutions. Requirements such as customer due diligence and record keeping obligations now apply to designated non-financial business and professions (DNFBPs). These are defined as accounting professionals, estate agents, legal professionals, and trusts and company service providers (TCSPs).

Enforcement will fall to the professional bodies overseeing the DNFBPs. These have been...