AML Updates

The President’s Message: Strengthening Anti-Money Laundering Oversight – What’s Next

• Law Society’s Regulatory Role: As the designated AML regulatory body under the AML/CTF Ordinance (Cap. 615), the Law Society is responsible for overseeing legal practitioners' compliance and supporting members in managing AML/CTF risks effectively.
• Strengthening AML Oversight: As members may be aware, the Law Society has been working on implementing an AML/CTF supervisory framework for some time and has now progressed to the next steps. This proportionate, risk-based framework is designed to help firms meet their AML/CTF requirements. The initial phase focuses on introducing wider training initiatives, including AML/CTF training for individual firms. Through these initiatives, the Law Society aims to identify areas where support is most needed and develop targeted, practical guidance and resources to assist members in meeting their AML/CTF obligations.
• What Firms Should Expect: 
  • Mandatory AML/CTF Compliance Self-Assessment Form (“AML/CTF Form”): All law firms will be required to complete the AML/CTF Form, to guide firms in reviewing their own compliance and help identify areas where additional guidance or training may be useful.
  • Training and Collaboration: Following completion of the AML/CTF Form, members will be provided with opportunities to attend AML/CTF training, including: (i) webinars and workshops where firms can share experience and discuss how to meet their AML requirements in practice, and (ii) training sessions for individual firms.
• Why This Matters: Recent high-profile money laundering cases in the region (e.g. Singapore’s largest money laundering investigation and the Cambodian cyberscam involving global property transactions) underscore the critical role of legal professionals as gatekeepers in preventing financial crime, making vigilance and robust AML/CTF compliance essential. At the same time, the Law Society has a statutory duty to oversee legal professionals' compliance with AML/CTF requirements. To fulfil this responsibility, the Law Society is strengthening its supervisory framework through a proportionate, risk-based approach. 
• Timeline: These initiatives are expected to commence in Q1 2026, subject to Council approval. 
• Ongoing Support: Members are encouraged to share feedback or questions by contacting the Law Society’s AML Team at 3958 2394 or email aml@hklawsoc.org.hk.

For details, please read The President’s Letter – P041225, dated 4 December 2025

The President’s Message: Update on the Enhancements to the Suspicious Transactions Reporting Platform 

• JFIU’s Enhanced STREAM platform for Electronic STR Submission: The JFIU will replace the existing STREAMS system (in use since 2006) with a new platform, STREAMS 2.  This upgrade reflects the increasing complexity and volume of STRs, and introduces advanced data mining and analytical capabilities to improve the efficiency of receiving, processing, and analysing financial intelligence.
• Revised STR Proforma: As part of the upgrade, the “STR proforma” has been revised to better capture narrative information in a format suitable for analytical review. The Law Society has actively collaborated with the JFIU in testing and refining the new format.
• Transition Timeline: Law firms must transition to STREAMS 2 by 12 January 2026. Firms can either participate in a coordinated setup via the Law Society or apply independently to the JFIU starting in November 2025 (tentative).
• Key Actions for Law Firms: 
  
  • Transition Deadline: From 12 January 2026, law firms must submit STRs exclusively via the new STREAMS 2 platform. Existing STREAMS accounts will be deactivated.
  • Coordinated Setup via Law Society: Firms may opt to submit their current STREAMS account details to the Law Society by 13 October 2025 to facilitate a smooth transition. The Law Society will consolidate and forward this information to the JFIU, who will then issue login credentials and one-time passwords for the new STREAMS 2 accounts.
  • Independent Application Option: Firms that choose not to participate in the coordinated setup with the Law Society may apply directly to the JFIU for STREAMS 2 access starting November 2025 (tentative). This applies to all law firms, including those not currently using STREAMS.
  • Release of Updated Forms: The STREAMS 2 account application form and revised “STR proforma” are expected to be published on the JFIU website in November 2025 (tentative). 
  • Upcoming Seminar: The JFIU plans to host a seminar on the enhanced STR reporting system and transitional arrangements in December 2025 (tentative). The Law Society will continue to keep members informed as further details become available.
    
     

For details, please read The President’s Letter – P250925, dated 25 September 2025

The President’s Message: The Law Society’s United Nations Sanctions Screening Tool: Supporting Member Firms in Anti-Money Laundering (“AML”) Compliance

• Mandatory Sanctions Screening Requirement: Legal professionals must comply with United Nations Security Council sanctions, implemented locally through the UNSO (Cap. 537) and UNATMO (Cap. 575), which prohibit dealings with designated individuals and entities, including the provision of legal services that may facilitate access to assets or support prohibited activities. To meet these obligations, members are required—under Practice Direction P—to screen, where appropriate, clients, beneficial owners, and connected parties against the UN Sanctions Lists, including those designated as terrorists or terrorist associates.
• Challenges with Manual Screening: Screening against PDF-based sanctions lists is time-consuming and error-prone, especially for firms with limited resources. Common names, formatting inconsistencies, and lack of search functionality make manual checks inefficient and unreliable.
• Law Society’s Screening Tool: To support member firms—particularly small and medium-sized practices—the Law Society has developed a Microsoft Excel-based “United Nations Sanctions Screening Tool” that enables simultaneous screening of multiple names and provides ranked similarity scores to identify potential matches.
• AI Due Diligence Report: The screening tool is enhanced with additional function - AI Due Diligence Report, which conducts background checks on clients for sanctions risks, adverse news, and Politically Exposed Person (PEP) status, and producing a detailed summary that outlines relevant money laundering and terrorist financing risks. 
• Trial Participation Invitation: Member firms are invited to participate in a trial of the Tool before its official launch. To join the trial, contact the Law Society at aml@hklawsoc.org.hk or call 3958 2394. Interested firms will receive the Tool and user instructions for testing and feedback.
• Supporting AML Compliance Readiness: The Tool is part of the Law Society’s broader AML supervisory framework and aims to help firms demonstrate compliance readiness. Member feedback will be instrumental in refining the Tool and enhancing its practical value for the profession.

For details, please read:

• The President’s Letter - P250710, dated 10 July 2025
• Hong Kong Lawyer Journal - “From the Secretariat”, August 2025 Edition

The President’s Message: Suspicious Transaction Reporting: A Critical Pillar of Anti-Money Laundering in Hong Kong

• Overview of Reporting Obligations: Legal practitioners are legally obligated to file Suspicious Transaction Reports (STRs) under various Ordinances when they suspect money laundering or terrorist financing, with submissions directed to the Joint Financial Intelligence Unit.
• Sharp Rise in STR Filings: In 2024, a total of 147,660 STRs were submitted in Hong Kong, representing a 51.3% increase from the 97,577 STRs filed in 2023. In the same year, legal professionals submitted 1,128 STRs, accounting for approximately 0.76% of all STRs filed across sectors, ranking fifth among all 12 financial and non-financial sectors. This surge was largely attributed to the continued rise in fraud and scams, as well as broader economic activity in the post-pandemic period.
• Legal Sector STR Contributions: Legal professionals submitted 1,128 STRs in 2024,  marking a 66.6% increase from the 677 STRs filed in 2023. This reflects a significant uplift in reporting activity within the sector.
• Legal Sector as Leading STR Reporter among DNFBPs: From 2019 to 2024, legal professionals accounted for 73.45% of all STRs submitted by the Designated Non-Financial Businesses and Professions (DNFBPs), highlighting the sector's leading role in identifying and reporting suspicious activity.
• Members are reminded to remain vigilant in identifying and managing suspicious transactions, and to continue exercising due diligence and prudence in complying with all applicable Anti-Money Laundering statutory obligations and guidelines. 

For details, please read The President’s Letter - P250619, dated 19 June 2025 

The President’s Message: Anti-Money Laundering (AML) – Effectiveness of Self-Regulation

• Overview of diverse approaches to AML supervision of the legal sector across different jurisdictions 
• The critical role of self-regulation in preserving the independence and integrity of the legal profession 
• The Law Society’s role as a self-regulatory body designated under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, Cap. 615 to oversee the legal sector’s compliance with the AML requirements 
• Summary of the proactive measures implemented by the Law Society and the legal profession in Hong Kong to ensure adherence to AML requirements 

For details, please read Hong Kong Lawyer Journal – “President’s Message”, February 2025 Edition