Hong Kong’s Financial Services & Treasury Bureau (FSTB) has announced it’s consulting the public and financial services industry stakeholders on two legislative proposals that it says are aimed at “enhanc[ing] the regulatory regime for combating money laundering and terrorist financing” in the Special Administrative Region.
The two legislative proposals “are intended to bring Hong Kong’s regulatory regime in line with international requirements, as promoted by the Financial Action Task Force”, according to a Hong Kong government statement earlier this week.
The task force is an inter-governmental body that sets international standards on combating money laundering and terrorist financing. Hong Kong has been a member since 1991.
Stakeholders from businesses and sectors likely to be affected by the proposed legislation are being asked their views on the proposal to amend the Anti-Money Laundering & Counter-Terrorist Financing (Financial Institutions) Ordinance.
The FSTB said the proposed legislation, if enacted, would “enable Hong Kong to fulfil [its] obligations under the task force, and further reduce the risks of money laundering and terrorist financing in Hong Kong”.
Baker McKenzie: ‘far reaching implications’
In an alert to its clients that coincided with the FSTB’s announcement of the consultation, the Hong Kong office of Baker McKenzie, the international law firm, noted that the proposed changes, if adopted, would “have far-reaching implications for trustees and corporate service providers in particular, but also for other DNFBPs [designated non-financial businesses and professions] such as accountants and lawyers”.
“In substance, the proposal is to introduce a licensing regime for trust and corporate service providers and to expand the scope of the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance (AMLO) to cover all DNFBPs,” the Baker McKenzie alert, written under the direction of Steven Sieker, head of Baker McKenzie’s Hong Kong tax practice, added.
“All trust and corporate services providers would be required to be licensed within 90 days of a date to be determined.”
If the legislation is ultimately adopted in its proposed form, Baker McKenzie Sieker noted, it would become “a criminal offence to operate a TCSP [trust or company service provider] business without a licence.”
Sieker stressed that because the consultation period was less than two months in duration and draft legislation was expected to follow shortly thereafter, all comments on the matter would need to be received by the authorities as soon as possible.
A link to the address to which those interested in submitting comments should send them to is embedded at the end of the government’s statement announcing the consultation, which may be accessed by clicking here.