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The Narcotics Division of the Security Bureau is asking remittance agents and money changers for their views on a proposal to lower the threshold for verification of a customer's identity and record keeping from $20,000 to $8,000.
The proposal aims to enhance the effectiveness of Hong Kong's anti-money laundering and counter-terrorist financing regime. It is an active response to the Special Recommendation VII of the Financial Action Task Force on Money Laundering (FATF), the international anti-money laundering standard-setter.
About 1,700 remittance agents and money changers will be required to verify customer's identity and keep records of transactions over $8,000. The current threshold is $20,000.
Remittance agents are also required to record and retain particulars of the sender and the instructor of a remittance transaction if the two are not the same person.
As a member of the FATF, Hong Kong is obliged to adopt measures that are in line with established international standards. Not complying with the recommendation may render the industry vulnerable to the risk of being exploited by criminals and terrorists.
Remittance agents are also encouraged to take an additional step to combat terrorist financing more effectively by including the sender's information in the message accompanying the remittance. This would help facilitate remittance agents to conduct remittances smoothly to countries which require remittances to be accompanied with such information.
The proposal will need to be implemented by making minor amendments to a few provisions of the Organised and Serious Crimes Ordinance by notice in the gazette before tabling at the Legislative Council.
The Narcotics Division has sent a consultation paper to all local remittance agents and money changers today. They are invited to forward their views and comments in writing before November 20, 2006, on the proposal and on any matters relating to the implementation of the Special Recommendation. The consultation paper has been uploaded to the Narcotics Division's website at www.nd.gov.hk/moneylaundering.htm.
It is anticipated that the requirements will also be implemented by the banking industry in January next year.
Ends/Friday, October 20, 2006
Issued at HKT 15:30
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