This page provides links to the key legislation, guidance, supporting publications and templates to help members detect and prevent Money Laundering (“ML”), Terrorist Financing (“TF”) and Proliferation Financing (“PF”).
| AML Policies and Procedures Template |
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| This template was designed to serve as a practical example of key procedures and controls that should be documented by members to assist with the mitigation of money laundering and terrorist financing risks and with meeting regulatory obligations. There is no ‘one-size-fits-all’ document, as each member firm is different in terms of size, practice areas, type of clients and countries that clients are from or do business in. However, this document highlights some of the key AML and CTF requirements, with supporting guidance on the level of information that should be included. Download the document |
| Guidance on Alternative Processes to Verify a Client’s Identity |
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| This guidance on alternative methods to verify a client’s identity was developed as a response to the COVID-19 situation and circumstances where it is neither practical nor possible for a client to meet with a legal practitioner face-to-face before accepting instructions. In such circumstances, members can apply one of the alternative methods set out in this document. Download the guidance |
| AML Leaflet for Clients |
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| Legal practitioners, are often challenged by clients, and sometimes third parties, on the level of information that must be provided to confirm a client’s identity, and on the supporting documents relating to the particulars of the transaction. Clients may also not be aware of the strict AML obligations applicable to the legal sector, and can question the need for such information. To assist legal practitioners with such situations, the AML Leaflet has been designed to be shared with clients. It explains the anti-money laundering responsibilities applicable to legal practitioners, and the identification documents required to prove a client’s identity. The AML Leaflet is not a prescribed requirement or a formal guideline. AML Leaflet – English version AML Leaflet – Chinese version |
The Hong Kong Risk Assessment (“HKRA”) of money laundering and terrorist financing sets out the key ML / TF risks for Hong Kong, and mitigating measures. The HKRA examines the ML / TF threats and vulnerabilities facing various sectors in Hong Kong and the city as a whole. The Report also identifies areas for further work and the follow-up actions already taken.
This report is therefore central to understand and estimate the ML / TF risks that firms are exposed to and should be considered as part of a firm's firm-wide risk assessment.
HK AML / CTF Risk Assessment 2022
HK AML / CTF Risk Assessment 2018
The Financial Action Task Force (“FATF”) published the Mutual Evaluation Report of Hong Kong (the “Report”) on 4 September 2019, commending Hong Kong's efforts in combating ML and TF.
The Report, which assesses the compliance and effectiveness of Hong Kong's AML and CTF regime against the international standards, confirms that Hong Kong has a strong legal foundation and effective system for combating ML and TF. The Report notes that the system is particularly effective in the areas of risk identification, law enforcement, asset recovery, counter-terrorist financing and international co-operation.
Hong Kong's AML / CTF regime is assessed to be compliant and effective overall, making it the first jurisdiction in the Asia-Pacific region to have achieved an overall compliant result in the fourth round of FATF evaluation.
Click here to access the Report.
| Topic | Publication Title | Issue Date |
|---|---|---|
| Risk Based Approach for Legal Professionals | Risk Based Approach Guidance for Legal Professionals 2019 | June 2019 |
| ML / TF vulnerabilities and typologies | Money Laundering and Terrorist Financing Vulnerabilities of Legal Professionals | June 2013 |
| TF Risk Assessment | Terrorist Financing Risk Assessment Guidance | July 2019 |
| PF Risk Assessment | Guidance on Proliferation Financing Risk Assessment and Mitigation | June 2021 |
| Guidance on PEPs | Guidance on Politically Exposed Persons | June 2013 |
| Beneficial Ownership | Best Practices On Beneficial Ownership for Legal Persons | October 2019 |
| Digital ID Verification methods | Guidance on Digital ID | March 2020 |
| COVID-19 ML / TF Risks | COVID-19-Related Money Laundering and Terrorist Financing Risks | December 2020 |
| Trade-Based ML | Trade-Based Money Laundering: Trends and Developments | December 2020 |
Legal practitioners are required to apply Enhanced Client Due Diligence (“EDD”) measures when acting for clients, persons or entities from or in non-cooperative countries and territories identified by the Financial Actions Task Force (“FATF”) (PDP, Table A, paragraph 3(ii)).
FATF identifies jurisdictions with weak measures to combat money laundering and terrorist financing in two FATF public documents: the High-Risk Jurisdictions subject to a Call for Action (Black List) and Jurisdictions under Increased Monitoring (Grey List).
Click here to access FATF Lists: here
Click here to access latest updates of the FATF Lists: here
Generally, legal practitioners should consider the jurisdiction in which services will be delivered, the location of the client, beneficial owners and the client’s counterparties, as well as the source and destination of funds.
FATF does not maintain lists of all high-risk jurisdictions, countries with a high risk of corruption, tax evasion, drug trafficking, or that are subject to sanctions. Legal practitioners should determine whether a country is a high-risk or not, to decide whether EDD should be applied.
Here are some of the resources that may help legal practitioners to decide whether a country is high risk:
| Disclaimer The contents are intended to provide a general guide to the subject matter only and should not be treated as a substitute for specific advice concerning individual situations. While every effort has been made to ensure the accuracy of the content provided, it does not constitute legal advice and cannot be relied upon as such. The Law Society does not accept responsibility for liabilities arising from reliance upon the content provided. |
