March 9, 2018: HK SFC Circular

Circular to Licensed Corporations and Associated Entities 

Anti-Money Laundering / Counter-Terrorist Financing

FATF Guidance on Counter Proliferation Financing 

We would like to draw the attention of licensed corporations (“LCs”) and associated entities (“AEs”) to a guidance paper recently issued by the Financial Action Task Force (“FATF”) entitled “Guidance on Counter Proliferation Financing – The Implementation of Financial Provisions of United Nations Security Council Resolutions to Counter the Proliferation of Weapons of Mass Destruction” Note 1, which is available on the FATF’s website (

The paper provides guidance to facilitate both public and private sector stakeholders in understanding and implementing proliferation financing-related Targeted Financial Sanctions made under United Security Council Resolutions (“UNSCRs”).  Various sections of the guidance are relevant for LCs and AEs to better understand and mitigate proliferation financing risks, including:

    • Taking note of circumstances where customers and transactions are more vulnerable to be involved in proliferation financing activities, including factors that are relevant to the sanctions regime on the Democratic People’s Republic of Korea;

    • Identifying high risk customers and transactions, and applying enhanced scrutiny, using a risk-based approach; and

    • Undertaking reasonable efforts to collect additional information (e.g. available typologies of proliferation finance) related to identified high-risk customers and transactions in order to identify, and avoid engaging in, prohibited activities, and to enable follow-up actions.

LCs and AEs are recommended to review the paper carefully to enhance the understanding of proliferation financing-related Targeted Financial Sanctions and the range of possible approaches that can be adopted, depending on individual LC’s or AE’s own situation, risk profile and risk appetite.

Should you have any queries regarding the contents of this circular, please contact Ms Kiki Wong on 2231 1569.

Intermediaries Supervision Department
Intermediaries Division
Securities and Futures Commission


HK SFC Notice

HK SFC Circular

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