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Joint Financial Intelligence Unit Financial Services and the Treasury Bureau
 
FAQs
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FAQ applicable to all Money Service Operators (“MSOs”)
Identification and verification of customer’s identity – natural persons
Q1 Non-Hong Kong residents
What documents would be regarded as “reliable and independent” for verifying the identity information of a natural person customer who is not a Hong Kong resident?
A1 The following are examples of documents that would be considered reliable and independent for non-Hong Kong residents:
(a) a valid travel document;
(b) a valid national (i.e., government or state-issued) identity card bearing the photograph of the individual; or
(c) a valid national driving licence incorporating all the required identification information and photographic evidence of the identity of the applicant (issued by a competent national or state authority).
(Key Reference(s): Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (For Money Service Operators) (“AML/CFT Guideline”) para. 4.3.3 and para. 2 of Appendix A)
Q2 Acceptable travel documents
What are acceptable “travel documents” for the purpose of paragraph 4.3.3?
A2 The following documents are examples of travel documents for the purpose of identity verification:
(a) Passport;
(b) Mainland Travel Permit for Taiwan Residents;
(c) Seaman’s Identity Document (issued under and in accordance with the International Labour Organisation Convention/Seafarers Identity Document Convention 1958);
(d) Taiwan Travel Permit for Mainland Residents;
(e) Permit for residents of Macau issued by Director of Immigration;
(f) Exit-entry Permit for Travelling to and from Hong Kong and Macau for Official Purposes; or
(g) Exit-entry Permit for Travelling to and from Hong Kong and Macau.
(Key Reference(s): AML/CFT Guideline para. 4.3.3 and para. 3 of Appendix A)
Q3 Retention of a copy of travel documents
What part of the “travel documents” should be kept on file?
A3 An MSO should retain a copy of the “biodata” page of the travel documents containing the bearer’s photograph and biographical details for the purpose of the record-keeping requirements in the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap.615) (“AMLO”) and the AML/CFT Guideline.
(Key Reference(s): AML/CFT Guideline para. 4.3.3)
Identification and verification of customer’s identity – legal persons, trusts or other similar legal arrangements
Q4 Principal place of business
What is the “principal place of business” of a legal person?
A4 The “principal place of business” means the location where a legal person primarily operates or the place of its main activities. It can be the same as, or differ from, the address of registered office.
Legal persons, depending on their business nature, may operate in various locations or premises of different natures. If the address of the principal place of business of a legal person is not in line with an MSO’s understanding of the legal person’s business nature or customer profile, the MSO should seek to understand the rationale for why that address is provided to the MSO.
(Key Reference(s): AML/CFT Guideline para. 4.3.6)
Q5 Address of registered office
Does an MSO need to separately ask the customer to provide “address of registered office” information, if such information is included in a document provided by a reliable and independent source that is obtained by (or otherwise available to) the MSO?
A5 Paragraph 4.3.6(c) requires MSOs to obtain the address of registered office of a legal person. When the address of registered office of a legal person is included in a document provided by a reliable and independent source (e.g., certificate of incumbency) that is obtained by (or otherwise available to) the MSO for verification of the legal person's identity, an MSO may accept the document as an evidence of the address of registered office unless the MSO was made aware that such address was out of date.
(Key Reference(s): AML/CFT Guideline para. 4.3.6)
Q6 Presence of directors or beneficial owners for the purpose of account opening
Is there any requirement for directors and beneficial owners of a legal person to establish business relationship with an MSO and be physically present at account opening?
A6 In general, a corporate account is opened in the name of a legal person by a natural person who is authorised to act on behalf of that legal person to establish business relationship with an MSO. The AML/CFT Guideline does not mandate whether the natural person should be a director or beneficial owner of a customer so long as the natural person has been properly authorised to act on behalf of the customer to establish business relationship with the MSO. The basic requirement in this regard is for an MSO to identify and verify the identity of that natural person as well as obtaining the written authority to verify that the natural person has the authorisation of the legal person to establish a business relationship with the MSO.

If, in such a case, the business relationship is established through a face-to-face channel, at least one natural person who is authorised to establish the business relationship should be physically present at the time of account opening.

For the avoidance of doubt, if, in such a case, the business relationship is established through a non-face-to-face channel (i.e., the natural person acting on behalf of the legal person customer to establish the business relationship is not physically present for identification purpose), the MSO should mitigate any increased risk according to paragraph 4.10.4 of the AML/CFT Guideline, such as applying additional due diligence measures set out in paragraph 4.10.1.
(Key Reference(s): AML/CFT Guideline para. 4.10.1 and 4.10.4)
Reliability of documents, data or information
Q7 Electronic documents
What measures is an MSO expected to take to ensure the reliability of identification documents which are in electronic form?
A7 The AML/CFT Guideline recognises that some commonly used original identification documents can be in electronic form. An MSO should take appropriate measures to ensure the reliability of the electronic documents. The appropriateness of the measures to be taken will depend on the type of identification document in question.

For example, an original certificate of incorporation issued by the Hong Kong Companies Registry is available in electronic form. When accepting a print copy of an electronic certificate of incorporation, an MSO can corroborate with other identification document or information (e.g., record of companies registry) to ensure the reliability of the print copy.

For the avoidance of doubt, corroboration would not be required for instances where the MSO itself has downloaded a particular document (as opposed to having received a print copy of it) from a reliable source (e.g., the Hong Kong Companies Registry’s website).
(Key Reference(s): AML/CFT Guideline para. 4.3.16)
Q8 Document in foreign language
Does the translation need to be performed by a professional third party (e.g., solicitor)?
A8 Paragraph 4.3.17 requires MSOs to take appropriate steps to be reasonably satisfied that the documents in foreign language in fact provide evidence of the customer’s identity. There is no requirement that the translation has to be performed by a professional third party (e.g., solicitor) or someone who is qualified; an MSO may obtain a translation from a reliable source, which may include technology solutions and commonly used translation tools.
(Key Reference(s): AML/CFT Guideline para. 4.3.17)
Q9 Expired documents
If a previously obtained identity document such as passport of a customer is expired, does the MSO need to re-verify any aspect of customer identification by obtaining a current identity document?
A9 The MSO does not need to re-verify any aspect of customer identification just because of the expiry of a previously obtained identity document. According to footnote 39 to paragraph 5.2 of the AML/CFT Guideline, once the identity of a customer has been satisfactorily verified, there is no obligation to re-verify identity unless in specified circumstances; however, the MSO should take steps from time to time (i.e., during a periodic or trigger event customer due diligence (“CDD”) review) to ensure that the customer information that has been obtained is up-to-date and relevant.
(Key Reference(s): AML/CFT Guideline para. 5.2 and footnote 39)
Enhanced measures for high risk customers and jurisdictions
Q10 Source of wealth
Does an MSO need to establish source of wealth for every customer?
A10 No. Under a risk-based approach, MSOs are required to establish the customer’s source of wealth in high risk situations. Examples of these situations include (a) a customer or whose beneficial owner is a foreign politically exposed person (“PEP”); (b) a high risk business relationship with a customer or whose beneficial owner is a domestic PEP or an international organisation PEP; and, where appropriate, (c) other situations that by its nature presents a high money laundering and terrorist financing risk. Therefore, MSOs are not expected to establish source of wealth for each and every customer.

For customers who are non-high risk, some of the information that is obtained by (or otherwise available to) an MSO to understand the purpose and intended nature of the business relationship (e.g., occupation of individual customers, business nature of corporate customers, etc.) should often be sufficient for the MSO to have a basic understanding of the customer’s profile and accordingly be able to monitor that the account balance, and value and volume of transactions, is in line with the expected wealth and profile of the customer.

For high risk customers, there is no expectation to apply the same source of wealth procedures to all these customers in the same manner, or collect evidence dating back decades when the risk does not justify doing so, as it is often impractical.
(Key Reference(s): AML/CFT Guideline para. 4.9.3, 4.9.10 and 4.9.15)
Q11 Jurisdictions subject to a call by the Financial Action Task Force (“FATF”)
Which jurisdictions are subject to a call by the FATF?
A11 Only jurisdictions listed in the FATF statement: “The FATF Public Statement” should be regarded as “jurisdictions for which this is called for by the FATF” under paragraph 4.15.1 of the AML/CFT Guideline. Enhanced customer due diligence (“EDD”) measures that are proportionate to the risks should be conducted on business relationships and transactions with customers from these jurisdictions.
For the avoidance of doubt, conducting EDD is not mandatory for customers connected to jurisdictions listed in the FATF statement: “Improving Global Anti-Money Laundering and Counter-Financing of Terrorism (“AML/CFT”) Compliance: On-going Process”. However, the fact that a customer is connected to such a jurisdiction should be taken into account in determining the overall risk profile of the customer.
(Key Reference(s): AML/CFT Guideline para. 4.15.1)
Ongoing monitoring
Q12 Using intermediaries for ongoing monitoring
If an MSO relies on an intermediary to carry out CDD measures when on boarding a customer, can the MSO further rely on the intermediary to conduct ongoing monitoring?
A12 No. Section 18 of Schedule 2 to the AMLO (“Schedule 2”) only allows an MSO to carry out any CDD measures set out in section 2 of Schedule 2 by means of an intermediary but does not allow an MSO to rely on an intermediary to continuously monitor relevant business relationships as required by section 5 of Schedule 2. Therefore, an MSO cannot rely on an intermediary to continuously monitor its business relationships with a customer (i.e., ongoing CDD and transaction monitoring).
However, an MSO may use an intermediary to collect further documents, data and information, and provide or coordinate relevant updates, to assist the MSO in ensuring that the CDD records maintained by the MSO remain up-to-date and relevant.
(Key Reference(s): Section 2, 5 and 18 of Schedule 2 and AML/CFT Guideline footnote 33)
Q13 Independent validation of transaction monitoring systems
Who can independently validate an MSO’s transaction monitoring systems and processes?
A13 Such validation can be performed by an external party or an internal audit function of the MSO. Subject to appropriate segregation of duties, the internal audit function should have sufficient expertise and resources to enable it to carry out an independent review of the MSO’s AML/CFT systems (see paragraph 3.11 of the AML/CFT Guideline).
(Key Reference(s): AML/CFT Guideline para. 3.11 and 5.8)
Others
Q14 Certification
If an MSO decides to use certification as a supplementary measure to fulfil the requirement of section 9 of Schedule 2, what documents should be certified?
A14 In general, the identification document used for the purpose of identity verification (e.g., official document such as an identity card, passport, certificate of incorporation, or certificate of incumbency etc) should be subject to certification.
There is no expectation to require certification for all other CDD information or documents provided by the customer; or to require certification if an MSO is able to check the documents against public sources.
As a general principle, customers should always be provided with the opportunity, if they wish to do so, to present their original documents to the staff of the MSO.
(Key Reference(s): AML/CFT Guideline para. 4.10.3 and para. 7 to 10 of Appendix A)
Q15 Sanctions screening of parties involved in payments
In a cross-border wire transfer, who must be screened as a “relevant party”?
A15 An MSO should, at a minimum, screen the following relevant parties in a cross-border wire transfer:
(a) originator;
(b) recipient;
(c) ordering institution;
(d) intermediary institution;
(e) beneficiary institution; and
(f) named parties (e.g., individuals, companies, banks etc) in the payment message.
(Key Reference(s): AML/CFT Guideline para. 6.16(c))
Q16 Record-keeping of unsuccessful applicants
For cases of unsuccessful application for business, is an MSO required to retain the identification records and documents in relation to the unsuccessful applicants?
A16 Under the AMLO, there is no requirement for an MSO to maintain records and documents involving unsuccessful applicants. This, however, does not preclude the MSO from retaining the relevant records and documents in order to meet its other statutory obligations.
(Key Reference(s): AML/CFT Guideline Chapter 8)
   
FAQ in Application for an MSO Licence
Q1 When was the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance, Chapter 615, implemented?
A1 The Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance (“AMLO”), Chapter 615, was passed on 29 June 2011 and came into operation on 1 April 2012, and amended as The Anti-Money Laundering and Counter-Terrorist Financing Ordinance in February 2018.
Q2 Who are subject to the statutory duties under the “AMLO”?
A2 Money Service Operators (“MSOs”) and the Postmaster General as well as other specified financial institutions.
Q3 What is the definition of a Money Service Operator (“MSO”)?
A3 A person who or an institution which operates a money changing service or a remittance service is a Money Service Operator.
Q4 Who is the relevant authority for the “MSOs” and the Postmaster General under the “AMLO”?
A4 The Commissioner of Customs & Excise (“CCE”) is the relevant authority under the “AMLO”.
Q5 What should I do if I wish to operate a money changing and/or remittance service under the “AMLO”?
A5 Under the “AMLO”, any person who wishes to operate a money service must apply for a licence from the “CCE”.
Q6 When should “MSOs” apply for a licence?
A6 “MSOs” should submit application for a licence to the “CCE” commencing on 1 April 2012.
Q7 How to apply?
A7 The application can be submitted in paper or through e-platform.
Q8 How to apply in paper?
A8 The application form can be downloaded from the C&ED website at http://www.customs.gov.hk After completion, the application form together with copies of supporting documents should be submitted by post or in person to the “CCE” (i.e. Money Service Supervision Bureau at Units 1218-1222, 12/F., Nan Fung Commercial Centre 19 Lam Lok Street, Kowloon Bay, Kowloon).
Q9 How to apply through e-platform?
A9 The application form can be completed and submitted with relevant supporting documents through the C&ED website at http://www.customs.gov.hk.
Q10 What are the conditions for the “CCE” to grant an “MSO” licence?
A10 The conditions that “CCE” will consider in granting a licence are set out in section 30(3) and (4) of the “AMLO”. In brief, the applicant (or any partner / director / ultimate owner) must not have been convicted of an offence specified at section 30(4), or is an undischarged bankrupt, and the premises for operation of the “MSO” business is considered by “CCE” to be suitable. For easy reference, the said offences under section 30(4)(a)(i) – (iv) and other provision under section 30(4)(b) – (e) are tabulated at Appendix 1.
Q11 Can “MSOs” use domestic premises as their business premises to apply for the licence?
A11 Yes, provided that the applicant has secured the written consent of every occupant of the domestic premises for any persons authorized by the “CCE” to enter the premises to conduct a routine inspection under the “AMLO”.
Q12 Do the “MSOs” need to pay for the licence?
A12 “MSOs” have to pay fees for a licence as set out at Appendix 2.
Q13 How long is the validity of a licence?
A13 The licence will be valid for 2 years and a licensee should apply for renewal not later than 45 days before the licence is due to expire.
Q14 If the application is unsuccessful, will the fees be refunded?
A14 No.
Q15 After commencement of the “AMLO”, was there any transitional period for application of a licence?
A15 Registered RAMCs whose names appeared on the register maintained by the Joint Financial Intelligence Unit of the Hong Kong Police Force as at 31 March 2012 were deemed to have been granted a licence during a transitional period of 60 days from 1 April 2012 to 30 May 2012. Before the expiry of the transitional period, if they applied for a licence from the “CCE”, they could continue to operate their business before the licence was granted, the application was refused or withdrawn.
Q16 Who may answer MSOs’ questions in case of doubt?
A16 The Customs & Excise Department may answer their enquiries which can be made via :-
Hotline at (852) 2707 7837
during 8:45a.m. to 12:30p.m. and 1:30 p.m. to 5:30 p.m.
from Monday to Friday (except public holidays)
Fax at (852) 2707 7838
Email to msoenquiry@customs.gov.hk
Mail to Money Service Supervision Bureau at Units 1218-1222, 12/F.,
Nan Fung Commercial Centre, 19 Lam Lok Street,
Kowloon Bay, Kowloon


   
Technical Questions
Q.1What are the requirements for a computer to access MSOS through Internet?
A.1The requirements for a computer to access MSOS through Internet are listed below:
MSO Required Settings
Operating System Microsoft Windows / Mac
Operating System VersionMicrosoft Windows 7 / Windows 8 / MacOS X
Browser VersionMicrosoft Internet Explorer 9.0-11.0 (Windows)
Mozilla Firefox 34.0-36.0 (Windows & MacOS)
Google Chrome 39.0-41.0 (Windows)
Safari 7.0-8.0 (MacOS)
JavascriptEnabled
CookiesEnabled
128-bit SSLEnabled
Chinese Character SupportHong Kong Supplementary Character Set (HKSCS-2001)
Software for Opening PDF DocumentsAdobe Reader
Q.2Where can I download Adobe Reader?
A.2You can download Adobe Reader at here.
Q.3What is the timeout limit for the MSOS?
A.3The timeout limit of the MSOS is 30 minutes.
Q.4When uploading supporting document, I received the error message: "File size exceeds limit". What can I do?
A.4The reason you received the error is due to a file size limit of 2 MB when uploading to our system. You could reduce the file size or split the file into at most 3 files for the upload purpose.

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