Hong Kong: new guidelines and intermediary's certificate
Authorised institutions have only six months to undertake a significant revision of their counter-money laundering procedures.
The Hong Kong Monetary Authority has issued new money laundering guidelines and a standard for intermediary's certificate.
The Intermediary's certificate deals with the problems of identifying customers introduced by third parties. This will include, for example, the creation of a credit account for the purchase of big ticket items such as jewellery or cars. It requires the intermediary to certify that due diligence has been undertaken and to supply certified copies of original documents which it sees.
The supplement to the anti money laundering guidelines reflects the international standards recommended in the Basel Committee paper "Customer Due Diligence for Banks", and also takes into account some of the changes proposed by the Financial Action Task Force (FATF) in its current review of the Forty Recommendations as well as the special recommendation on wire transfers. In addition, the Supplement incorporates guidance issued by the HKMA since the Guideline was last revised in 2000, including in particular recommendations related to terrorist financing."
The HKMA requires all financial institutions to make amendments to their counter-money laundering systems as soon as possible and in any case no later than 30 September 2003. If an authorised institution feels that it needs longer to change its systems, then it may apply to the HKMA but the decision as to whether to grant more time will be made on a case by case basis. The over-riding impression given by HKMA is that this will not be in any way automatic.
And, importantly, the new guidelines are made under powers contained in the Banking Ordinance (s 7(3) which means that they have force of law - this is not persuasive guidance, it has the power of legislation.
The supplemental guidelines will be considered in depth in World Money Laundering Report Vol 4 No 7.
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