International standards on regulating dnfbps the way forward
This presentation is the property of its rightful owner.
Sponsored Links
1 / 27

International Standards on Regulating DNFBPs & The way forward PowerPoint PPT Presentation


  • 95 Views
  • Uploaded on
  • Presentation posted in: General

International Standards on Regulating DNFBPs & The way forward. Narcotics Division, Security Bureau. Mr Peter KWOK Assistant Secretary for Security 27 February 2009. Agenda. Financial Action Task Force (FATF) requirements on Trust & Company Service Providers (TCSPs)

Download Presentation

International Standards on Regulating DNFBPs & The way forward

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


International standards on regulating dnfbps the way forward

International Standards on Regulating DNFBPs &The way forward

Narcotics Division, Security Bureau

Mr Peter KWOK

Assistant Secretary for Security

27 February 2009


International standards on regulating dnfbps the way forward

Agenda

  • Financial Action Task Force (FATF) requirements on Trust & Company Service Providers (TCSPs)

  • Highlight of the FATF recommendations relevant to TCSPs

  • Way Forward in regulating TCSPs


International standards on regulating dnfbps the way forward

Designated Non-Financial Businesses

and Professions (DNFBPs)

  • DNFBPs as defined by Financial Action Task Force (FATF) are:

    • Lawyers

    • Accountants

    • TCSPs

    • Real Estate Agents

    • Dealers in Precious Metals/ Stones

    • Casinos


International standards on regulating dnfbps the way forward

FATF Requirements

FATF requirements on

Trust & Company Service Providers (TCSPs)


International standards on regulating dnfbps the way forward

FATF Requirements for TCSPs

Requirements to be specified in law:

  • CDD (Rec. 5)

  • Record Keeping (Rec. 10)

  • Suspicious Transaction Reporting (Rec. 13)

Other requirements:

  • Internal Controls (Rec. 15)

  • Sanctions (Rec. 17)


International standards on regulating dnfbps the way forward

FATF Requirements for TCSPs

Other requirements:

  • Politically Exposed Persons (PEPs) (Rec. 6)

  • New technology/ Non-face-to-face Business (Rec. 8)

  • Reliance on 3rd parties/ intermediaries (Rec. 9)

  • Complex / unusual transactions (Rec. 11)


International standards on regulating dnfbps the way forward

FATF Requirements for TCSPs

Other requirements:

  • No tipping-off (Rec. 14)

  • Special attention to parties from non-complying jurisdictions (Rec. 21)

  • Self Regulatory Organisation (SRO)(Rec. 24)

  • Competent authorities to establish guidelines (Rec. 25)


International standards on regulating dnfbps the way forward

FATF Requirements for TCSPs

When Trust and Company Service Providers

  • Acting as a formation agent of legal person;

  • Acting as a director or secretary of a company;

  • Providing a registered office, etc for a company;

  • Acting as a trustee of an express trust;

  • Acting as a nominee shareholder for another person.

  • They have to comply with Rec 5, 6 & 8-11.


International standards on regulating dnfbps the way forward

Highlight

Highlight of

FATF recommendations

relevant to TCSPs


International standards on regulating dnfbps the way forward

Rec. 5 and 9 (CDD)

  • To identify the customer and verify his ID

  • To identify the beneficial owner

  • The purpose and intended nature of the business relationship

  • On-going CDD and enhanced CDD

  • Reliance on 3rd parties/ intermediaries


International standards on regulating dnfbps the way forward

Rec. 10 (Record Keeping)

  • To retain all documents relating to transactions

  • At least 5 years after the completion of transactions


International standards on regulating dnfbps the way forward

Rec. 13 and 14 (STRs)

  • Suspicious Transactions Reporting (STR) requirements

  • Protection from criminal/ civil liabilities

  • No tipping-off


International standards on regulating dnfbps the way forward

Rec. 15 (Internal Control)

  • To establish/ maintain internal policies/ procedures to prevent ML/TF

  • To ensure high standards in hiring

  • employees

  • On-going staff training

  • Audit function to test the system


International standards on regulating dnfbps the way forward

Rec. 24 and 25 (SRO & Guidelines)

  • Government authority or Self-regulatory Organisation (SRO) to monitor and ensure compliance with AML/CFT requirements

  • Power to sanction in case of non-compliance

  • Government authority or SRO to establish guidelines


International standards on regulating dnfbps the way forward

Rec. 17 (Sanctions)

  • Sanctions are effective, proportionate and dissuasive

  • Sanctions can be meted out by Government authority or SRO


International standards on regulating dnfbps the way forward

Rec. 6 (PEPs)

  • Have appropriate risk management systems to determine whether clientsare Politically Exposed Persons (PEPs) or not

  • Senior management approval for having business relationships

  • To establish source of wealth/ fund


International standards on regulating dnfbps the way forward

Rec. 8 (New Technology)

To take measures:

  • To prevent misuse of technological developments for ML

  • To address risk associated with non-face-to-face business relationships


International standards on regulating dnfbps the way forward

Rec. 11 (Complex Transactions)

  • To pay special attention to all complex, unusual large transactions and unusual patterns of transactions

  • To examine the background/ purpose of such transactions


International standards on regulating dnfbps the way forward

Rec. 21 (Special Attention)

  • To give special attention to dealings with parties from countries which do not comply with the FATF Recommendations


International standards on regulating dnfbps the way forward

*

*

*

FATF Recommendations relevant to DNFBPs


International standards on regulating dnfbps the way forward

Mutual Evaluation by FATF

  • The Third round of Mutual Evaluation (ME) is underway

  • 23 jurisdictions have been assessed

  • www.fatf-gafi.org


International standards on regulating dnfbps the way forward

Way Forward

Way Forward

in regulating TCSPs


International standards on regulating dnfbps the way forward

Way Forward (1)

  • Establishment of Central Co-ordinating Committee (CCC), chaired by Financial Secretary, in April 2008

  • To steer & co-ordinate the strategic development of HK’s AML/CFT regime in line with internationally recognised standards


International standards on regulating dnfbps the way forward

Way Forward (2)

  • FSTB assumes the role of overall co-ordinator for AML/CFT matters and with specific responsibilities on financial sectors

  • SB (Narcotics Division) is to look after DNFBPs and Non-profit Organisations


International standards on regulating dnfbps the way forward

Way Forward (3)

Legislation on CDD & Record Keeping

  • Phase I : Financial Sectors

  • Phase II: DNFBPs

  • No time table and open-minded


International standards on regulating dnfbps the way forward

Way Forward (4)

  • To prepare for Phase II, SB will step up outreaching activities to raise awareness on AML/CFT and work closely with regulatory/ professional bodies

  • CPD Seminars

  • Sector Specific Guidelines

  • Revised Interactive Training Kit


International standards on regulating dnfbps the way forward

Thank you!


  • Login