Hong Kong has put in place a number of legislations to underpin the implementation of anti-money laundering and counter-financing of terrorism (AML/CFT) regime. These include:
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Anti-Money Laundering and Counter-Terrorist Financing Ordinance, Cap. 615
This Ordinance provides for the statutory requirements relating to customer due diligence (CDD) and record-keeping for specified financial institutions; and the powers of the relevant authorities to supervise financial institutions’ compliance with the requirements. The Ordinance also provides a licensing regime for money service operators. Under the AMLO, the designated relevant authorities (i.e. Hong Kong Monetary Authority, Insurance Authority, Securities and Futures Commission and Customs and Excise Department) published guidelines for their respective sectors. Also, the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) (Amendment) Ordinance 2018 came into effect on 1 March 2018 to extend the statutory CDD and record-keeping requirements to cover designated non-financial businesses and professions (viz. legal professionals, accounting professionals, estate agents, and trust or company service providers (“TCSPs”)). The Law Society of Hong Kong, the Hong Kong Institute of Certified Public Accountants, the Estate Agents Authority and the Companies Registry are the regulatory bodies for the respective sectors. In addition, the amendment Ordinance introduces a licensing regime for TCSPs requiring them to apply for a licence from the Registrar of Companies and satisfy a “fit-and-proper” test before they can provide trust or company services as a business in Hong Kong.
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Drug Trafficking (Recovery of Proceeds) Ordinance (DTROP), Cap. 405
This Ordinance provides for the tracing, confiscation and recovery of the proceeds of drug trafficking, and creates offences relating to those proceeds or property representing those proceeds, and for incidental or related matters.
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Organized and Serious Crimes Ordinance (OSCO), Cap. 455
This Ordinance provides for the powers of investigation into organized crimes and certain other offences and into the proceeds of crime of certain offenders; the restraint and confiscation of proceeds of crime; making provision in respect of the sentencing of certain offenders; creating offences relating to the proceeds of crime or property representing the proceeds of crime; and for ancillary and connected matters. The OSCO imposes a universal obligation on suspicious transaction reports on all persons and entities if they have knowledge or suspicion that criminal proceeds are involved in any transactions.
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United Nations (Anti-Terrorism Measures) Ordinance (UNATMO), Cap. 575
This Ordinance provides for the implementation of the United Nations Security Council Resolution 1373 relating to measures for the prevention of terrorist acts. In that connection, it also implements the United Nations International Convention for the Suppression of Terrorist Bombings, the United Nations Convention for the Suppression of Unlawful Acts Against the Safety of Maritime Navigation and the United Nations Protocol for the Suppression of Unlawful Acts Against the Safety of Fixed Platforms Located on the Continental Shelf.
In addition, the United Nations (Anti-Terrorism Measures) (Amendment) Ordinance 2018 was enacted on 21 March 2018 to prohibit any person from dealing with specified terrorist property and property of specified terrorists or terrorist associates, as well as to criminalise, among other things, the financing of the travel of individuals between states for the purpose of perpetration, planning or preparation of, or participation in, terrorist acts or the provision or receiving of terrorist training. The amendments came into operation on 31 May 2018.
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United Nations Sanctions Ordinance (UNSO), Cap. 537
This Ordinance provides for the imposition of sanctions against places outside the People’s Republic of China arising from Chapter 7 of the Charter of the United Nations. Regulations are made to implement sanctions, at the instructions made by the Ministry of Foreign Affairs of the People's Republic of China. A number of regulations made under the UNSO are directly relevant to the AML/CFT objectives. These are the United Nations Sanctions (Afghanistan) Regulation 2012, Cap. 537AX, the United Nations Sanctions (Joint Comprehensive Plan of Actions—Iran) Regulation, Cap. 537BV, and the United Nations Sanctions (Democratic People’s Republic of Korea) Regulation, Cap. 537AE.
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Weapons of Mass Destruction (Control of Provision of Services) Ordinance, (WMDO), Cap. 526
The Ordinance prohibits the provision of services that will or may assist the development, production, acquisition or stockpiling of weapons of mass destruction in Hong Kong or elsewhere. For the purpose of the WMDO, the provision of services covers a wide range of activities, such as financing, sourcing of materials, the provision of training, technological information or know-how, and other consulting services..
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Import and Export Ordinance, (IEO), Cap. 60
The legal basis for strategic trade control in Hong Kong is the Import and Export Ordinance, Chapter 60 of the Laws of Hong Kong ("The Ordinance"). The Ordinance lists strategic commodities as one of the few categories of goods the import or export of which is prohibited unless licensed by the Director-General of Trade and Industry ("Director-General"). The Ordinance establishes a licensing requirement for import and export of such commodities. These commodities are listed in the Schedules to the Import and Export (Strategic Commodities) Regulations.
Prohibited articles are goods the import, export or transit of which are prohibited or controlled under the provisions of the Import and Export Ordinance, Chapter 60, Laws of Hong Kong or any other laws of the Hong Kong Special Administrative Region.
Any persons importing or exporting such prohibited articles must apply for licences, permits or certificates from the Government Departments concerned in advance and are subject to the conditions imposed thereof.
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Cross-boundary Movement of Physical Currency and Bearer Negotiable Instruments Ordinance, Cap. 629
This Ordinance establishes the declaration and disclosure system on the cross-boundary movement of physical currency and bearer negotiable instruments (CBNIs), with a view to implementing Recommendation 32 of the Financial Action Task Force (“the R32 System”). The R32 System aims at preventing terrorists and other criminals from financing their activities or laundering their crime proceeds through CBNIs across boundaries.