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Guidelines on Anti-Money Laundering and Counter-Terrorist Financing for Professional Accountants


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Tuesday, 06 March 2018 08:06
Under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) (“AMLO”), as recently amended, "accounting professionals", i.e., practice units and members of the Hong Kong Institute of Certified Public Accountants (“HKICPA”), as defined in the Professional Accountants Ordinance (Cap. 50), are required to comply with certain customer due diligence and record-keeping requirements, commencing 1 March 2018.

With effect of AMLO, the Hong Kong Institute of Certified Public Accountants, has issued relevant guidelines to its members to comply with. The Guidelines on Anti-Money Laundering and Counter-Terrorist Financing for Professional Accountants form a new Part F, Sections 600-670, of the Code of Ethics for Professional Accountants.

The Guidelines are intended to:

  • Provide general guidance on Anti-Money Laundering and Counter-Terrorist Financing (“AML/CFT”) requirements under AMLO and other relevant legislation.
  • Indicate good practice on applying other relevant Financial Action Task Force Recommendations.
  • Summarise relevant legislative provisions on AML/CFT.
  • Ensure compliance by members with prescribed requirements to prevent Money Laundering / Terrorist financing” (“ML/TF”) activities.
When practices, by way of business, prepare for or carry out for a client a transaction concerning one or more of the following services, there are specific customer due diligence (“CDD”), ongoing monitoring and record keeping (“RK”) measures that they must adopt, as set out in Sections 620, 630 and 660 of the Guidelines:

(a) buying and selling of real estate;

(b) managing of client money, securities or other assets;

(c) management of bank, savings or securities accounts;

(d) organisation of contributions for the creation, operation or management of companies;

(e) creation, operation or management of legal persons or arrangements;

(f) buying and selling of business entities.

In addition, practices that provide trust or company services must adopt CDD, ongoing monitoring and RK procedures, when, by way of business, they prepare for or carry out for a client a transaction concerning any of the following services, as set out in paragraph 600.2.2 of the Guidelines:

(a) forming corporations or other legal persons;

(b) acting as, or arranging for another person to act as, a director or secretary of a company, a partner of a partnership, or a similar position in relation to other legal persons;

(c) providing a registered office, business address or accommodation, correspondence or administrative address for a company, a partnership or any other legal person or arrangement;

(d) acting as, or arranging for another person to act as, a trustee of an express trust or similar legal arrangement; or

(e) acting, or arranging for another person to act, as a nominee shareholder for a person other than a corporation whose securities are listed on a recognised stock market.

In general, practices must have in place internal policies, procedures and other controls to address ML/TF concerns, and compliance with the existing legal requirements on AML/CFT, when they carry out any of the services specified above.

The above necessary controls cover primarily the following areas:

(a) risk assessment and management

(b) customer due diligence (Section 620)

(c) ongoing monitoring (Section 630)

(d) suspicious transactions reporting (Section 640)

(e) record keeping (Section 660)

(f) compliance management, including designating a Money Laundering Reporting Officer at the management level

(g) staff hiring, ongoing training and communication (Section 670)

(h) group policy, where appropriate.

For the full version of the Guidelines, it is available on the website of HKICPA.

 


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