AML/CFT compliance in Hong Kong: Recent record fine and reminder of latest guidance

Authors: William Hallatt, Hannah Cassidy, Natalie Curtis, Valerie Tao and Jennifer Fong.

The Hong Kong Securities and Futures Commission (SFC) has recently reprimanded and fined Guosen Securities (HK) Brokerage Company (Guosen) HK$15.2 million for failures in complying with anti-money laundering and counter-terrorist financing (AML/CFT) regulatory requirements when handling third party fund deposits.

This is the largest fine imposed under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) to date.

In this e-bulletin, we provide an overview of the Guosen case and other recent cases, the regulators’ approach to AML/CFT enforcement, as well as a reminder of the recent AML/CFT regulatory guidance.

Continue reading

Anti-money laundering regulatory round-up

Author: Susannah Cogman

Late 2018 and early 2019 saw a flurry of regulatory developments and proposals relating to anti-money laundering. We have reported on these in brief in our regular corporate crime updates, but for those who have been – for example – too immersed in Brexit to read the underlying documents in detail, we have taken this opportunity to bring together an overview of, and commentary on, a number of recent anti-money laundering/counter-terrorist financing (“AML/CTF”) developments. In particular, we discuss in this briefing:

  • the FCA’s report on data submitted in the first annual financial crime data return;
  • recent developments in the EU’s list of high risk third countries;
  • amendments to compliance requirements in respect of anonymous safety deposit boxes;
  • the FCA’s thematic review on money laundering risks in the e-money sector;
  • a Decision Notice issued by the FCA to a CEO for failings in his oversight of his bank’s AML systems and inadequate supervision of the MLRO to whom he had delegated relevant responsibilities;
  • proposals relating to money laundering supervision in the EU;
  • the FATF’s Mutual Evaluation Review of the UK;
  • FATF guidance on a risk-based approach to the securities sector;
  • other FATF developments of interest, in particular in relation to virtual assets;
  • reform of the UK Suspicious Activity Reporting regime;
  • a recent RUSI paper on the scale of money laundering in the UK;
  • AML-related amendments to the Financial Crime Guide (FC), following consultation GC 18/1; and
  • an overview of the current position regarding AML compliance post-Brexit, in the event of a no-deal exit.

Please click here to read our full briefing.

Continue reading

Corporate Crime autumn update 2018

Welcome to the autumn 2018 edition of our corporate crime update – our round up of developments in relation to corruption, money laundering, fraud, sanctions and related matters. Our update now covers a number of jurisdictions.

For the full update on each jurisdiction, please click on the name of the jurisdiction below where we provide a brief overview of what is covered. Continue reading

HONG KONG’S ANTI-GRAFT COMMISSIONER WARNS OF CORRUPTION ON BELT AND ROAD

The head of Hong Kong’s Independent Commission Against Corruption (ICAC) has warned local investors to beware of rampant corruption in some Belt and Road countries.

ICAC commissioner Simon Peh Yun-Lu pledged the support of the agency, one of the world’s most respected and effective anti-corruption agencies, in helping investors and Belt and Road countries themselves with graft training.

Concern at corruption is far from new; President Xi Jinping highlighted the need for international counter-corruption cooperation at China’s Belt and Road Forum in May 2017. Continue reading

SFC proposes to implement revisions to AML/CFT guidelines on 1 November 2018 ahead of FATF Hong Kong evaluation

On 5 July 2018, the Securities and Futures Commission (SFC) issued a consultation paper on proposals to amend the Guideline on Anti-Money Laundering and Counter-Terrorist Financing (Main Guideline) and the Prevention of Money Laundering and Terrorist Financing Guideline issued by the Securities and Futures Commission for Associated Entities (Guideline for AEs). Comments on the proposals are required to be submitted by 9 August 2018. Continue reading

Corporate Crime update – June 2018

Welcome to the June 2018 edition of our corporate crime update – our round up of developments in relation to corruption, money laundering, fraud, sanctions and related matters. For the full update on each jurisdiction, please click on the name of the jurisdiction below. Below we provide a brief overview of what is covered in each update. Please note, our next edition will be published in August.

Herbert Smith Freehills would like to congratulate Senior Associate, Elizabeth Head of our Corporate Crime & Investigations team in London, for being named by Global Investigations Review as one of 100 Women in Investigations for 2018. Continue reading

EU Parliament-commissioned report – Virtual currencies and terrorist financing

The EU Parliament’s internal Think Tank has published a study commissioned by Parliament’s special Committee on Terrorism (TERR) into virtual currencies (VCs) and terrorist financing (TF). Via TERR, the report may contribute to Parliament’s consideration of the treatment of VCs, particularly with regard to safeguards to prevent/detect the use of VCs in TF. Continue reading