Mr Ronnie Choi蔡國偉先生             

President of SCAA      

Mr Wilson Kwok 郭志成先生

Chairman of Members Forum and Commercial Relationship Committee

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BACKGROUND:

The Financial Services and the Treasury Bureau (“FSTB”) has recently proposed to :-

1. To amend the Anti-Money Laundering and Counter –Terrorist Financing (Financing Institutions) Ordinance (Cap. 615) (“AMLO”) to prescribe customer due diligence (“CDD”) and record-keeping requirements for certain designated non-financial businesses and professions (“DNFBPs”). That means Solicitors, accountants, real estate agents, and trust or company service providers would be required to perform customer due diligence in certain circumstances.
2. To amend the Companies Ordinance (Cap. 622) (“CO”) to require disclosure ownership information by Hong Kong Companies. Hong Kong companies would be required to maintain a register of “beneficial owners” or “persons with significant control,” known as a PSC register.

Proposal on DNFBPs- Customer Due Diligence and Record-keeping Obligations for Solicitors, Accountants, Real Estate Agents and Trust and Company Service Providers.

A proposed amendment to the AMLO would extend customer due diligence (“CDD”) recordkeeping requirements to these three types of professions when preparing for or carrying out certain transactions for clients. The current rules governing financial institutions would be extended to these three professionals.

Accountants

1. The Hong Kong Institute of Certified Public Accountants (“HKICPA”) will assume statutory oversight for monitoring and ensuring compliance of CPAs with AMLO requirements.
2. Non-compliance with AMLO will trigger the prevailing investigation, disciplinary and appeal mechanisms under the Professional Accountants Ordinance (Cap. 50) (“PAO”) governing profession misconduct.
3. Sanction non-compliance via existing mechanism under the PAO, ranging from reprimands, civil fine, to suspension from practice or removal from the register.

Trust or Company Service Providers (“TCSPs”)

1. The Registrar of Companies is to enforce a licensing regime for TCSPs for the purpose of enforcing CDD and record-keeping requirements.
2. It will be a criminal offence to operate a TCSP business without a licence.
3. Impose disciplinary（not criminal）sanction on non-compliance with CDD requirements. (i.e. public reprimand, remedial order, pecuniary fines and suspension or revocation of licence).
4. Appeal can be made to a review tribunal against future decisions made by the Registrar of Companies.

Proposal on Disclosure of Beneficial Ownership and Maintainance of a Register of People with Significant Control (“PSC”)

The government proposes to amend the Companies Ordinance to require Hong Kong companies to identify and maintain records of their “beneficial owners.” The definition of “beneficial owners” would also be significantly revised. If approved, such companies will be required to create a “PSC Register” of persons with “significant control.” Persons with “significant control” include both registrable individuals and registrable legal entities. This register would be available for public inspection on payment of a fee.

Consultation Paper

Consultation on Enhancing Transparency of Beneficial Ownership of Hong Kong Companies:

http://www.cr.gov.hk/en/publications/docs/consult_etbo-e.pdf

Consultation on Enhancing Anti-Money Laundering Regulation of Designated Non-Financial Businesses and Professions:

http://www.cr.gov.hk/en/publications/docs/consult_eaml-e.pdf