Hong Kong gazettes new Anti-Money Laundering Bill

The Hong Kong government published an Anti-Money Laundering & Counter-Terrorist Financing (Amendment) Bill on 24 June, which is intended to strengthen the Special Administrative Region’s regulatory regime for combatting money laundering and terrorist financing. The Bill was introduced into the Legislative Council for first reading on 6 July.

The Amendment Bill seeks to introduce a licensing regime for virtual asset service providers (VASPs) and a registration regime for dealers in precious metals and stones (DPMS) in order to impose statutory anti-money laundering and counter-terrorist financing (AML/CTF) obligations on these two sectors.

The opportunity is also being taken to address a number of miscellaneous and technical issues under the Anti-Money Laundering & Counter-Terrorist Financing Ordinance (Chapter 615), which were identified by the Financial Action Task Force (FATF) in its mutual evaluation of Hong Kong.

The Amendment Bill aims to enhance Hong Kong’s AML/CTF regime by requiring any person who seeks to carry on a business of operating a virtual asset exchange to apply for a licence from the Securities & Futures Commission. The relevant person will be subject to a fit and proper test, in addition to the AML/CTF and other regulatory requirements.

Under the proposed DPMS registration regime, any person who is seeking to carry on a business of dealing in precious metals and precious stones in Hong Kong will be required to register with the Commissioner of Customs & Excise. There will be two categories of registrants based on whether a DPMS is seeking to engage in cash transactions over HKD120,000 in the course of their business. Dealers who engage in cash transactions at or above this threshold will be subject to AML/CTF supervision under the regime.

A government spokesperson said: “The legislative proposal is pertinent to our fulfilment of the relevant FATF obligations and will mitigate the risk of money laundering and terrorist financing in Hong Kong. This will safeguard the integrity of Hong Kong as an international financial centre, protect investors and add to our credibility as a trusted and competitive place to do business.”

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