20 December 2006
The Chief Executive
All authorized institutions
I am writing to draw your attention to the Notice of Amendments to Section 24C(1) and Schedule 6 of the Organized and Serious Crimes Ordinance ("OSCO") which was published in the Government Gazette on 1 December 2006. The amendments will come into effect on 26 January 2007.
For the purpose of implementing Special Recommendation VII issued by the Financial Action Task Force on Money Laundering, the Administration has made amendments under OSCO to the effect that remittance agents and money changers will be required to keep records of customers' identity and particulars of remittance and exchange transactions of HK$8,000 and above. In other words, the existing threshold of HK$20,000 applicable to these requirements will be lowered to HK$8,000.
While AIs will remain exempt from the above requirements under OSCO, there are similar requirements under paragraphs 3.13 and 5.27 of the Guideline on Prevention of Money Laundering ("Guideline") in respect of remittance or money changing transactions undertaken by AIs for non-account holders. In order to align with the changes made under OSCO, we intend to make corresponding amendments to the Guideline. However, as we plan to conduct a thorough review of the anti-money laundering ("AML") guidelines and consolidate them into a single supervisory guideline in due course, it will take some time before these corresponding amendments, together with any other necessary changes or refinements to the guidelines, will be incorporated.
Although the AML guidelines will not be amended at this stage, we would expect AIs to apply the lower threshold of HK$8,000 when carrying out the customer identification and recordkeeping procedures on the relevant transactions from the time these amendments to OSCO take effect.
If there are any questions relating to this letter, please feel free to contact Mr Ronnie Wong on 2878-1399 or Mr Edmund Leung on 2878-8281. On-line access to this letter is available under the icon "Circulars and Guidelines" in the HKMA's public (http://www.hkma.gov.hk) and private (http://www.stet.finnet.hk) web-sites.
Executive Director (Banking Policy)