Revised HKMA Guidelines on AML/CFT to Take Effect from November

The Guidelines are set to take effect from 1 November for authorised institutions and stored value facilities. The HKMA has also published its policy and supervisory approach.

The HKMA (Hong Kong Monetary Authority) has published in the gazette revised AML/CFT Guidelines for authorised institutions and SVFs (stored value facilities), both set to take effect from 1 November 2018.

This comes as Hong Kong is set to undergo a mutual evaluation in next month to assess the effectiveness of its implementation of FATF (Financial Action Task Force) standards. The SFC (Securities and Futures Commission) has also released a revised version of its own AML/CFT Guideline, gazetted on 19 October and set to take effect in November.

The amendments to the AML/CFT Guidelines aim to better align them with the latest international requirements, such as FATF recommendations to include a new category of international organisation PEPs (politically exposed persons).

Additionally, they provide principle-based guidance to facilitate the implementation of risk-based requirements at authorised institutions and SVFs, including for identity verification of customers who are natural persons, legal persons, trusts and other similar legal arrangements, while also enhancing guidance on risk assessments and risk management, with further guidance on simplified and enhanced due diligence.

The new Guidelines also address implementation challenges relating to certain requirements, such as by amending requirements on persons purporting to act on behalf of the customer. They also seek to reduce unintentional barriers to the use of technology in AML/CFT systems, allowing the use of different methods to mitigate the risk during non-face-to-face account opening.

Also released is a new Supervisory Policy Manual setting out the HKMA’s overall policy and supervisory approach in its AML/CFT policies, procedures and controls of authorised institutions. This is the first time the HKMA has articulated its supervisory approach in this manner, which is aimed at greater policy transparency. It is not intended to introduce any new requirements, and should be read in conjunction with the new AML/CFT Guideline, available here.

The HKMA’s policy and supervisory approach for SVF licensees was released concurrently and should be read in conjunction with the AML/CFT Guideline for SVFs, available here.

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