By Email Only: aml_consultation @fstb.gov.hk
Division 5, Financial Services Branch
Financial Services and the Treasury Bureau
24/F, Central Government Offices
Tim Mei Avenue, Tamar
Central, Hong Kong
4 March, 2017
Dear Sirs,
Consultation on Enhancing Anti-Money Laundering Regulation of Designated Non-Financial
Business and Professions (“DNFBPs”) (“the Consultation”)
1
About Tricor
1.1
Tricor Group (“Tricor”) is a global provider of integrated Business, Corporate and Investor
Services.
1.2
Tricor comprises Tricor Holdings Limited, subsidiaries and associated companies, with a staff
strength of over 2,000 and a network of offices in 37 cities across 20 countries / territories. Tricor
offices are located in Hong Kong (Head Office), Mainland China and Macau, Australia, Barbados,
British Virgin Islands, Brunei, Cayman Islands, Dubai UAE, India, Indonesia, Ireland, Japan,
Korea, Labuan, Malaysia, Singapore, Thailand, the United Kingdom and Vietnam.
1.3
In most of the countries / territories in which Tricor operates, our professional specialists provide
a comprehensive range of services including the following: Business Advisory; Entity Formation;
Corporate Governance, Corporate Administration & Secretarial; Trust & Fiduciary; Accounting
& Financial Reporting; Payroll, Payment & Treasury Administration; New Issues / Initial Public
Offerings & Registry Management; Tax; China Entry & Consulting; Executive Search;
Management Consulting; Human Resource Consulting; and Fund Administration.
1.4
Our client portfolio includes over 1,000 companies listed on the Hong Kong Stock Exchange,
more than 500 companies listed in Singapore and Malaysia, over 40 per cent of Fortune Global
500 companies, as well as a significant share of multinationals and private enterprises operating
across international markets.
1.5
Tricor is a founding subscriber to the Hong Kong Institute of Chartered Secretaries (“HKICS”)
Anti-Money Laundering and Counter Terrorist Financing (“HKICS AML/CFT”) Charter (“the
Charter”). Under the Charter, following advice by the Financial Services & Treasury Bureau, a fit
and proper professional “Responsible Person” is required to be appointed by the Corporate
Services Provider (“CSP”) to assume responsibility for compliance by the CSP with the Charter,
the Guidelines and related obligations thereunder. Material failure with compliance may lead to
discipline, including public censure of the Responsible Person along with the removal of the CSP
from the approved list of HKICS AML/CFT Organisation on HKICS’s website. Our Chief
Executive Officer for Hong Kong and China, Natalia Seng, is our Responsible Person.
2
Overall Comment
2.1
Before turning to the specific questions under the Consultation, we should say that we welcome
the regulation of DNFBPs but find the proposals in their current form more akin to registration
than regulation. We therefore are not sure whether the current proposals will meet the standard
under the Financial Action Task Force recommendation 22.
3.
Our Response
3.1
We have set out below our responses to the specific questions in the Consultation. In preparing
these responses, we have adopted the definitions and acronyms set out in the Consultation unless
otherwise specified in this submission.
Question
Response
1
Do you agree with the application of a risksensitive approach, whereby the CDD
measures to be undertaken by DNFBPs should
be commensurate with the risk profiles of
customers?
Agree.
2
Do you agree that DNFBPs should be subject to
enhanced CDD measures when dealing with
customers presenting a high risk of money
laundering or terrorist financing?
Agree.
3
Do you think DNFBPs should be allowed the
flexibility to undertake simplified CDD
measures on low-risk cases, with reference to
the list of eligible customers and products as
specified in the AMLO?
Agree.
4
Do you think there are other justified addition
to the specified list of customers and products
eligible for simplified CDD treatment under the
AMLO by DNFBPs? If so, what are they; and
what are the justifications (please support with
statistics where applicable)?
We believe that there should be no deviation
from the list under AMLO.
5
Do you agree that DNFBPs should be subject to
a six-year record-keeping requirement on a par
with financial institutions?
Agree.
6
Do you agree with the proposed designation of
the respective regulatory authority for
solicitors, accountants, real estate agents and
TCSPs?
We are broadly in agreement, however the
proposal does not appear to deal with the
issues relating to multi-disciplinary DNFBP
practices.
For instance, if a TCSP carries out specified
transactions stipulated under both TCSPs and
accountants, or if an accountant / solicitor
carries out specified transactions stipulated
under TCSPs, would separate licences be
required from the HKICPA, The Law Society
and/or the Companies Registry for different
types of specified transactions carried out?
That seems onerous, and also who would be
the lead regulator?
Further a TCSP may carry out specified
transactions through a number of entities. In
such case, could a master licence be issued
listing the names of all entities covered by the
licence?
7
Do you agree that, instead of introducing one
new single regulatory body for solicitors,
accountants and estate agents, the prevailing
investigation, disciplinary and appeal
mechanisms under the respective governing
Ordinances of the professions should be relied
upon to enforce the statutory CDD and record
keeping requirements?
Agree. However, please ensure that a
consistent approach / regulatory procedures
are applied by all these bodies in relation to the
criteria for obtaining the license and also for
ongoing monitoring and review. Refer also 9,
13 to 15.
8
Do you consider it necessary to introduce new
criminal sanctions for non-compliance with the
statutory CDD and record-keeping
requirements under the AMLO by DNFBPs?
We have no objection to imposing criminal
sanctions for non-compliance, however please
consider making allowances for unintentional
violations. Further, please ensure that a
consistent approach is applied to each type of
DNFBP.
9
Do you think that the Law Society, the HKICPA
and the EAA should be given inspection and
search powers similar to those available to
AML regulatory authorities for financial
institutions under Part 3 of the AMLO?
Yes, but we note that para 3.26 relating to
TCSPs only mentions “conducting investigation
and seizure with warrant” which implies that
inspection will be done only when the CR
suspects there is a failure of the TCSP to
comply with the regulations. Similar inspection
and search powers for monitoring and review
should equally apply to the Companies
Registry.
Please be mindful that such measures would
require additional staff resources which would
increase the financial burden on the relevant
professional bodies, which may need to be
passed on to the members via increased
subscriptions.
10
Do you agree with the provision of a 90-day
transitional period for existing TCSP operators
to migrate to the new licensing regime?
Yes, for the purpose of the “registration”
system proposed under the Consultation.
However, an accreditation system equivalent
to that under the Charter would necessarily
require more than 90 days for a licence to be
granted by the Registrar of Companies.
11
Do you think the criteria for determining the
fitness and properness of TCSPs appropriate? If
not, what criteria should be included or
excluded?
Please consider a system equivalent to the
accreditation and monitoring under the
Charter.
12
Do you agree with the three-year validity of a
TCSP license (renewable on application)? If
not, what should be the validity period?
Agree but subject to a right to revoke/suspend
a license at any time upon the occurrence of
serious conduct violations (such as prosecution
for offences under the AMLO).
13
Do you agree that any persons operating TCSP
business without a valid license should be
liable to criminal sanctions (including a fine at
level 6 and/or imprisonment of up to six
months)?
Agree. Presumably such sanctions would
extend equally to each type of DNFBP.
14
Do you agree with the proposed supervisory
sanctions for TCSPs in respect of noncompliance with statutory CDD and recordkeeping requirements?
Agree. Presumably such sanctions would
extend equally to each type of DNFBP.
15
Do you agree with the re-constitution of the
Anti-Money Laundering and Counter-Terrorist
Financing (Financial Institutions) Review
Tribunal to cover appeals against future
decisions of the Registrar of Companies in
respect of the licensing and disciplinary regime
for TCSPs?
Agree. Presumably such process would extend
equally to each type of DNFBP.
16
Do you agree that the threshold for
determining controlling interest of beneficial
Agree.
ownership under the AMLO should be revised
from not less than 10% to more than 25%, to
align with the future requirement under the
Companies Ordinance?
4.
The Registered Agent
4.1
We would like to add that the terminology of “Registered Agent” in other jurisdictions such as
the British Virgin Islands (“BVI”) is a synonym for a statutory agent. This means much more
than a filing agent for electronic forms at the Companies Registry. Therefore, there may be some
confusion that the Hong Kong Registered Agent is akin to the BVI Registered Agent which is
highly regulated and whose directors’ and shareholders must be fit and proper persons.
4.2
We strongly suggest the replacement with a name like “Presenting Agent”.
Should you have any questions on the above submission, please feel free to contact our Paul DS Moyes at
[email protected].
Yours faithfully,
For and on behalf of
Tricor Services Limited
Natalia Seng
Chief Executive Officer – China & Hong Kong
Paul DS Moyes
Executive Director
and Head of Practice Development, Marketing and Communications