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Hong Kong Association of Banks issues AML/CFT FAQs

There are 81 Frequently Asked Questions in this document, which was distributed by the Hong Kong Monetary Association after its last update at the end of June (but only distributed by HKMA on the 23rd).

There is also an appendix on source of wealth. It includes a table of “good practices”, a list of “poor practices”:

The below are examples of measures that would not generally be acceptable:

(a) failing to properly apply risk-based approach – source of wealth requirements (particularly when conducting verification) are not sufficiently risk-based, such as applying the same measures to customers of varying risks or collecting too little or too much information;

(b) taking information provided by clients at face value – always accepting a customer’s explanation and material provided for source of wealth at face value, without probing further even where red flags are raised or raising insufficient challenge to source of wealth information;

(c) over-reliance – on undocumented information, particularly, relying on a self-declaration by the customer as to its source of wealth without verifying the information in the customer declaration through reliable external or internal sources;

(d) relying on intra-group introductions – where overseas standards are not equivalent to Hong Kong or where due diligence data is inaccessible because of legal constraints;

(e) granting waivers from establishing source of wealth where it is mandatory; and

(f) failing to distinguish – between a customer’s source of wealth and source of funds.

and a handful of examples.



Categories: Anti-Money Laundering Frequently Asked Questions (FAQ) Guidance HKMA Updates


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