HKMA issued Revised Guideline on Prevention of Money Laundering

The Hong Kong Monetary Authority ("HKMA") today issued a revised Guideline on Prevention of Money Laundering under section 7(3) of the Banking Ordinance.

The revised Guideline replaces the previous guideline on this subject issued in July 1993. It has been endorsed by the Banking Advisory Committee and the Deposit-taking Companies Advisory Committee after extensive consultation with the industry Associ ations and other interested parties.

The revised Guideline has taken into account the changes in money laundering legislation since 1993, including the passage of the Organized and Serious Crimes Ordinance ("OSCO") in 1994 which extended the money laundering offence to the proceeds of ser ious crimes other than drug trafficking and the subsequent amendments to both OSCO and the Drug Trafficking (Recovery of Proceeds) Ordinance in 1995 which imposed a clear statutory duty to report suspicious transactions.

The revisions made have also significantly strengthened and clarified the customer identification requirements in the Guideline, particularly in respect of shell companies, trust and nominee accounts and other types of intermediaries, in line with the latest recommendations of the Financial Action Task Force ("FATF") - an international organization aimed at strengthening international cooperation against money laundering.

"These changes are necessary to ensure that Hong Kong will continue to meet the FATF requirements and to keep up with the practices in other comparable financial centres. This will help to maintain the reputation and credibility of Hong Kong as an inte rnational financial centre," a spokesman of the HKMA said.

"The HKMA takes very seriously the need to prevent use of the banking system for the purposes of money laundering. All authorized institutions are expected to have in place adequate policies and systems of control to enable them to comply with the req uirements of the revised Guideline. The HKMA will monitor compliance with the Guideline during its regular on-site examinations and may commission reports by external auditors on individual authorized institutions if the circumstances require," the spoke sman added.

The new Guideline is available from the public registry of the HKMA and also accessible through Internet at the HKMA website (http://www.info.gov.hk/hkma).

Hong Kong Monetary Authority
17 October 1997