Anti-money laundering bill passed

December 7, 2022

Secretary for Financial Services & the Treasury Christopher Hui welcomed the Legislative Council's passage of the Anti-Money Laundering & Counter-Terrorist Financing (Amendment) Bill 2022 today.


The bill reinforces Hong Kong’s status as an international financial centre by enhancing the city’s regulatory regime for combating money laundering and terrorist financing, and by formulating a comprehensive and balanced regulatory framework for virtual asset (VA) activities to protect investors.


Under the amended Anti-Money Laundering & Counter-Terrorist Financing Ordinance, any person who engages in VA exchange business is required to apply for a licence from the Securities & Futures Commission (SFC).


Apart from satisfying the fit and proper test, conducting customer due diligence and record keeping, the relevant people must also meet other regulatory requirements on investor protection, such as safe custody of client assets, financial soundness and avoiding conflicts of interest.


In addition, licensed VA exchanges and their wholly owned subsidiaries need to regularly submit audited accounts and financial information to the SFC.


The commission is also empowered to enter business premises for conducting inspections and investigations when necessary. It will carry out a further consultation on the detailed regulatory requirements of the regime.  


Separately, any person who is seeking to carry on a business of dealing in precious metals and stones in Hong Kong and engage in transactions at or above $120,000, cash or non-cash, is required to register with the Commissioner of Customs & Excise.


No registration is required for dealers who only conduct transactions under $120,000.


Mr Hui said the amended ordinance establishes an effective regulatory regime of anti-money laundering and counter-terrorist financing (AML/CTF), and fulfils the relevant international obligations.


“This in turn strengthens Hong Kong’s status as an international financial centre. For VA exchanges, a comprehensive and balanced regulatory framework can protect investors and promote responsible and sustainable industry development.”


The amended ordinance, including the registration regime for dealers in precious metals and stones, will take effect on April 1, 2023, while the licensing regime for VA service providers as well as other amendments on AML/CTF requirements, will take effect on June 1, 2023.

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