Our Ref.: B10/21C 12 April 2018
The Chief Executive
All Stored Value Facility Licensees
Sanctions Screening Systems
I am writing to reiterate some important regulatory requirements by the Hong Kong Monetary Authority (HKMA) in relation to sanctions compliance. Stored value facility (SVF) licensees are reminded to put in place adequate measures which are appropriate to the nature and size of businesses, to meet their obligations under the Hong Kong’s financial sanctions regime. It is also the HKMA’s regulatory requirement on SVF licensees that sanctions screening should be conducted for new customers and payments as well as for existing customers whenever new designations are published1.
The adequacy of sanctions screening systems and controls is a supervisory priority for the HKMA, especially in the light of recent geopolitical developments. To test the effectiveness of the SVF sector in meeting sanctions obligations, we are planning to conduct thematic reviews on a number of SVF licensees in the coming months, taking into account the nature and size of their businesses. To assist SVF licensees in understanding and optimizing the performance of their screening systems, as well as preparing for the upcoming review, we are sharing key observations and good practices from a similar thematic review we have recently conducted in relation to the financial sanctions screening systems of Authorized Institutions (AIs).
While sanctions compliance policies and risk appetite may differ between SVF licensees and AIs, dependent on the particular business model, SVF licensees are encouraged to review the good practices provided at Annex and consider adopting such, as applicable, to help strengthen their ability to meet sanctions obligations.
If you have any questions on this circular, please contact Mr Alex Chow at 2878-8769 or Mr Dixon Lam at 2878-8721.
Executive Director (Enforcement and AML)