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Joint Financial Intelligence Unit Financial Services and the Treasury Bureau
 
FAQs
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FAQ applicable to all Financial Institutions
Key Reference(s)
Q1 For a customer which is a company, do we need to identify and verify directors who purport to act on behalf of the company to operate the account?
AMLO s.2(1)(d)Sch. 2

Guideline FN21
A1 Paragraph 4.4 of the Guideline specifies the identification and verification requirements for persons purporting to act on behalf of the customer. These requirements apply whether the persons purporting to act on behalf of the customer are directors of the company or not.
Q2 Do FIs need to verify the address of beneficial owners, directors or persons purporting to act on behalf of a customer including account signatories?
Guideline 4.3.6

Guideline 4.11.1and FN34
A2 FIs should obtain the address of a beneficial owner and adopt a risk-based approach to determine the need to verify the address.

For directors and persons purporting to act on behalf of a customer, in high-risk situations, consideration may be given to obtaining and taking reasonable measures to verify the addresses of directors and persons purporting to act on behalf of the customer.
Q3 Can verification of identity be completed in a period of time longer than that specified in paragraph 4.7.8?
Guideline 4.7.8 A3 The time periods provided in paragraph 4.7.8 are what the RAs consider as reasonable timeframes for completing verification. Where verification takes longer in individual cases, FIs should be prepared to justify the rationale and/or reasons and appropriately document the processes undertaken.
Q4 Do FIs need to record the names of all directors of a customer who is eligible for SDD?
Guideline 4.9.9 and 4.10 A4 FIs should record the names of all directors and verify the identity of directors on a risk-based approach whether or not the customer is eligible for SDD.
Q5 Does public body cover state-owned enterprises (SOE)? Can a subsidiary of a SOE be subject to SDD?
AMLO s.4 Sch 2 and Guideline 4.10.4 A5 SDD may be applied to state-owned enterprises fully owned by a government of an equivalent jurisdiction.

Where the enterprise is only partially owned by a government, SDD would apply only to the part of the enterprise owned by the government. For the part not owned by the government, FIs should identify and take reasonable measures to verify the identities of beneficial owners along that ownership chain.
Q6 Does simplified customer due diligence apply to a wholly/partially owned subsidiary of a listed company?
AMLO s.4(2), s.4(3)(c) Sch 2 and Guideline 4.10.4 A6 SDD may be applied to the customers set out in section 4 of the Schedule 2 to the AMLO which do not include wholly/partially owned subsidiaries of a listed company.

However, the FI is not required to identify or verify the beneficial owners of the listed company in the ownership chain of the wholly/partially owned subsidiary.

For partially owned subsidiaries, the FI should still identify and take reasonable measures to verify the identity of beneficial owners in the ownership chain that are not connected with the listed company.
Q7 Do the special requirements under section 10 of Schedule 2 to the AMLO apply to PEPs from Hong Kong, Macau and Taiwan?
Guideline 4.13.3 A7 The special requirements under section 10 of Schedule 2 to the AMLO apply to PEPs in a place outside the People’s Republic of China.
However, domestic PEPs may also present a high risk situation where EDD should be applied. FIs should apply a risk based approach to determine whether to apply EDD measures in respect of domestic PEPs. Domestic PEPs include those from Mainland China, Hong Kong, Macau and Taiwan.
Q8 If a previously obtained identity document such as passport of a customer is expired, does the FI need to re-verify any aspect of customer identification by obtaining a current identity document?
Guideline 4.7.12 A8 FIs do not need to re-verify any aspect of customer identification just because of the expiry of a previously obtained identity document. According to paragraph 4.7.12 of the Guideline on Anti-Money Laundering and Counter-Terrorist Financing, once the identity of a customer has been satisfactorily verified, there is no obligation to re-verify identity unless in specified circumstances; however, FIs should take steps from time to time to ensure that the customer information that has been obtained for the purposes of complying with the requirements of sections 2 and 3 of Schedule 2 of the AMLO are up-to-date and relevant.
Q9 Do FIs need to carry out any applicable new CDD measures arising from the requirements under section 2 of Schedule 2 to the AMLO on accounts opened prior to 1 April 2012? If so, is there any required deadline for bringing all pre-existing accounts up to the AMLO requirements?
AMLO s.6 Sch.2 A9 FIs are not required to perform the CDD measures prescribed in section 2 of Schedule 2 to the AMLO on pre-existing customers except in the circumstances specified in section 6(1) of Schedule 2 to the AMLO.
Q10 The arrangement for allowing FIs to rely on specified intermediaries under section 18(3)(a) of Schedule 2 to the AMLO to carry out CDD measures will expire 3 years after the implementation of the AMLO. Should FIs cease to use those intermediaries to carry out CDD measures?
AMLO s.18 Sch. 2 and Guideline 4.17.9 A10 The provision of a 3-year period for reliance on specified intermediaries under section 18(3)(a) of Schedule 2 of AMLO is to allow time for the establishment of a formal AML regulatory regime for non-financial businesses and professions. FIs may continue to rely on these intermediaries within the 3-year period up to 31 March 2015. FIs should review the reliance relationship concerned afterwards taking into account the development of the AML regulatory regime for these businesses and professions.
Q11 For cases of unsuccessful application for business, is the FI concerned required to retain the identification records and documents in relation to the unsuccessful applicants?
Guideline Chapter 8 A11 Under the AMLO, there is no requirement for the FI to maintain records and documents involving unsuccessful applicants. This, however, does not preclude the FI from retaining the relevant records and documents in order to meet its other statutory obligations.
Q12 With reference to section 22(1)(b) of Schedule 2, where a bank incorporated in Hong Kong has a subsidiary that carries on a securities or insurance business outside Hong Kong (or vice versa), will section 22 apply to such a subsidiary i.e. is the subsidiary regarded as “carrying on the same business as a financial institution in a place outside Hong Kong”?
Guideline 2.19 A12 It should be noted that section 22(1)(b) of Schedule 2 states "the same business as an FI" and not "the same business as the FI". Therefore, so long as the overseas subsidiary carries out the business as any type of FI (not necessarily as the same type of the business of the parent company), then this provision will apply.
Q13 What is JFIU’s “SAFE” Approach alluded to in paragraph 7.12 of the Guideline?
Guideline 7.12 A13 The "SAFE" Approach recommended by the Joint Financial Intelligence Unit is an effective systemic approach to identify suspicious financial activity which involves the following four steps:
(a) Step one:Screen the account for suspicious indicators: Recognition of a suspicious activity indicator or indicators
(b) Step two:Ask the customer appropriate questions
(c) Step three:Find out from the customer's records: Review information already known when deciding if the apparently suspicious activity is to be expected
(d) Step four:Evaluate all the above information: Is the transaction suspicious?

FIs should refer to JFIU’s website for details, which may be updated from time to time. FIs are reminded to browse the website of the JFIU for the latest information.
   
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.
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 13/F, Customs Headquarters Building 222 Java Road, North Point, Hong Kong).
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) 3759 3722
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) 3108 3425
Email to msoenquiry@customs.gov.hk
Mail to Money Service Supervision Bureau at 13/F,
Customs Headquarters Building, 222 Java Road,
North Point, Hong Kong

Meanwhile, the Customs & Excise Department has invited training institutions to organize relevant courses for the sector so as to help the sector understand the requirements under the AMLO, have a smooth transition and meet the statutory requirements, including the “customer due diligence” and “record keeping” requirements.


   
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, Mac OS X
Browser Microsoft Internet Explorer (Windows),
Mozilla Firefox (Windows & Mac),
Chrome (Windows & Mac),
Safari (Mac)
Browser VersionInternet Explorer 9.0-11.0;
Firefox 34.0-36.0;
Chrome 39.0-41.0;
Safari 7.0-8.0
JavascriptEnabled
CookiesEnabled
128-bit SSLEnabled
Chinese Character SupportHong Kong Supplementary Character Set (HKSCS-2001)
Software for Opening PDF DocumentsAdobe Reader
Software for Opening Online DemonstrationFlash
Q.2Where can I download Flash Player?
A.2You can download Flash Player at here.
Q.3How can I tell if I have the latest version of Flash Player installed and whether it is working correctly?
A.3If Flash Player is already installed on your computer, the below Flash Player displays a Version Information box that shows the version of Flash Player installed on your computer.
Flash Item
Q.4Where can I download Adobe Reader?
A.4You can download Adobe Reader at here.
Q.5What is the timeout limit for the MSOS?
A.5The timeout limit of the MSOS is 30 minutes.
Q.6When uploading supporting document, I received the error message: "File size exceeds limit". What can I do?
A.6The 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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