Frequently Asked Questions

Money Service Operators (previously known as Remittance Agents and Money Changers)

The era of regulating remittance agents and money changers by the Joint Financial Intelligence Unit (JFIU) came to an end in 2002.

On 1 April 2012, the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, Cap. 615 (AMLO) came into operation. Under the AMLO, a person who wishes to operate a remittance and / or money changing service (i.e. money service as defined under the AMLO) is required to apply for a licence from the Commissioner of Customs & Excise (CCE). Operating a money service without obtaining a money service operator licence from the CCE is an offence and liable to conviction of a fine of $100,000 and imprisonment for six months. Under the AMLO, the CCE is the relevant authority to regulate Money Service Operators (MSOs) (i.e. Remittance Agents and Money Changers) and supervise licensed MSOs' compliance with the customer due diligence and record-keeping obligations and other licensing requirements, as well as combating unlicensed operation of money service. Please click here for the announcement of the Hong Kong Customs and Excise Department.

If you come across anyone operating money service without licence, please call the Customs reporting hotline at 2545 6182.

FAQ applicable to all Money Service Operators (“MSOs”)

Identification and verification of customer’s identity – natural persons

Q1：

Non-Hong Kong residents
What documents would be regarded as “reliable and independent” for verifying the identity information of a natural person customer who is not a Hong Kong resident?

A1：

The following are examples of documents that would be considered reliable and independent for non-Hong Kong residents:
(a) a valid travel document;
(b) a valid national (i.e., government or state-issued) identity card bearing the photograph of the individual; or
(c) a valid national driving licence incorporating all the required identification information and photographic evidence of the identity of the applicant (issued by a competent national or state authority).
(Key Reference(s): Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (For Money Service Operators) (“AML/CFT Guideline”) para. 4.3.3 and para. 2 of Appendix A)

Q2：

Acceptable travel documents
What are acceptable “travel documents” for the purpose of paragraph 4.3.3?

A2：

The following documents are examples of travel documents for the purpose of identity verification:
(a) Passport;
(b) Mainland Travel Permit for Taiwan Residents;
(c) Seaman’s Identity Document (issued under and in accordance with the International Labour Organisation Convention/Seafarers Identity Document Convention 1958);
(d) Taiwan Travel Permit for Mainland Residents;
(e) Permit for residents of Macau issued by Director of Immigration;
(f) Exit-entry Permit for Travelling to and from Hong Kong and Macau for Official Purposes; or
(g) Exit-entry Permit for Travelling to and from Hong Kong and Macau.
(Key Reference(s): AML/CFT Guideline para. 4.3.3 and para. 3 of Appendix A)

Q3：

Retention of a copy of travel documents
What part of the “travel documents” should be kept on file?

A3：

An MSO should retain a copy of the “biodata” page of the travel documents containing the bearer’s photograph and biographical details for the purpose of the record-keeping requirements in the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap.615) (“AMLO”) and the AML/CFT Guideline.
(Key Reference(s): AML/CFT Guideline para. 4.3.3)

Q4：

Change of name of a natural person customer
If a natural person customer’s name has changed, what measures should be taken by an MSO?

A4：

If a natural person customer changes their name, an MSO should verify the new name by reference to documents, data or information provided by a reliable and independent source following paragraph 4.3.3 of the AML/CFT Guideline. To mitigate the risk of impersonation, the MSO should corroborate other identification information (e.g. date of birth, Hong Kong Identity Card number) on the new identification documents against its existing records. In case of doubt, the MSO may request a copy of applicable documentation regarding the name change (e.g. marriage certificate or deed poll).
For the avoidance of doubt, if a customer’s name has changed before the establishment of a business relationship, only the current name is required to be identified and verified.
(Key Reference(s): AML/CFT Guideline para. 4.3.2)

Identification and verification of customer’s identity – legal persons, trusts or other similar legal arrangements

Q5：

Principal place of business
What is the “principal place of business” of a legal person?

A5：

The “principal place of business” means the location where a legal person primarily operates or the place of its main activities. It can be the same as, or differ from, the address of registered office.
Legal persons, depending on their business nature, may operate in various locations or premises of different natures. If the address of the principal place of business of a legal person is not in line with an MSO’s understanding of the legal person’s business nature or customer profile, the MSO should seek to understand the rationale for why that address is provided to the MSO.
(Key Reference(s): AML/CFT Guideline para. 4.3.6)

Q6：

Address of registered office
Does an MSO need to separately ask the customer to provide “address of registered office” information, if such information is included in a document provided by a reliable and independent source that is obtained by (or otherwise available to) the MSO?

A6：

Paragraph 4.3.6(c) requires MSOs to obtain the address of registered office of a legal person. When the address of registered office of a legal person is included in a document provided by a reliable and independent source (e.g., certificate of incumbency) that is obtained by (or otherwise available to) the MSO for verification of the legal person's identity, an MSO may accept the document as an evidence of the address of registered office unless the MSO was made aware that such address was out of date.
(Key Reference(s): AML/CFT Guideline para. 4.3.6)

Q7：

Partnership details
What documents need to be obtained to verify the identity of a partnership?

A7：

The identity of a partnership can be verified by a record of registration or a partnership agreement or deed (which may be an extract or redacted version for customers / circumstances that are not deemed to present a high ML/TF risk). However, if a record of registration is obtained, an additional document may be required to understand the powers that regulate and bind the partnership, which may not be covered by that record itself.
If the customer (ie the partnership) is a well-known, reputable organisation with a long history in its industry and there is substantial public information about the customer, its partners and controllers, then confirmation of the customer’s membership of a professional or trade industry is likely to be sufficient to verify the identity of the customer.
(Key Reference(s): AML/CFT Guideline para. 4.3.7 and 4.3.8)

Q8：

Ownership charts
Is it mandatory to obtain and verify an ownership chart for a legal entity customer?

A1：

An MSO is obliged to understand the ownership and control structure of its customers. Although obtaining an ownership chart from the customer is the most convenient way of doing this, there is no strict requirement to do so.
In deciding whether an ownership chart should be obtained, an MSO should take into account the risk profile of the customer and the complexity of the ownership or control structure.
Although an MSO needs to identify any intermediate layers, it needs not, as a matter of routine, verify the details of the intermediate companies in the ownership structure. Whether this is necessary will depend upon the MSO’s overall understanding of the structure, the customer’s risk profile and whether the information available is adequate in the circumstances for the MSO to consider if it has taken adequate measures to identify the beneficial owners.
(Key Reference(s): AML/CFT Guideline para. 4.4.14)

Beneficial owner

Q9：

Presence of directors or beneficial owners for the purpose of account opening
Is there any requirement for directors and beneficial owners of a legal person to establish business relationship with an MSO and be physically present at account opening?

A9：

In general, a corporate account is opened in the name of a legal person by a natural person who is authorised to act on behalf of that legal person to establish business relationship with an MSO. The AML/CFT Guideline does not mandate whether the natural person should be a director or beneficial owner of a customer so long as the natural person has been properly authorised to act on behalf of the customer to establish business relationship with the MSO. The basic requirement in this regard is for an MSO to identify and verify the identity of that natural person as well as obtaining the written authority to verify that the natural person has the authorisation of the legal person to establish a business relationship with the MSO.

If, in such a case, the business relationship is established through a face-to-face channel, at least one natural person who is authorised to establish the business relationship should be physically present at the time of account opening.

For the avoidance of doubt, if, in such a case, the business relationship is established through a non-face-to-face channel (i.e., the natural person acting on behalf of the legal person customer to establish the business relationship is not physically present for identification purpose), the MSO should mitigate any increased risk according to paragraph 4.10.4 of the AML/CFT Guideline, such as applying additional due diligence measures set out in paragraph 4.10.1.
(Key Reference(s): AML/CFT Guideline para. 4.10.1 and 4.10.4)

Definition of beneficial owner

Q10：

Who should be considered as an individual who "exercises ultimate control over the management of the corporation"?

A10：

The following are some examples of natural persons who could be considered as beneficial owners on the basis that they exercise ultimate control over the management of the corporation:
(a) A natural person who exerts control of a legal person through means such as personal connections to persons who would be beneficial owners due to owning more than 25% of the shares or voting rights.
(b) A natural person who exerts control without ownership by participating in the financing of the enterprise, or because of close and intimate family relationships, historical or contractual associations, or if a company defaults on certain payments. Furthermore, control may be presumed even if control is never actually exercised, such as using, enjoying or benefiting from the assets owned by the legal person.
There is no requirement to actively identify a person exercising ultimate control over a customer where nothing obtained during the customer due diligence (“CDD”) process suggests that such a person exists.
(Key Reference(s): AML/CFT Guideline para. 4.4.5)

Person purporting to act on behalf of the customer (“PPTA”)

Q11：

Identifying the PPTA
Who should be treated as a PPTA?

A1：

A person may utilise a business relationship established between an MSO and another person (natural or legal person) or legal arrangement to conduct ML/TF activities. Financial Action Task Force (“FATF”) Recommendation 10 requires financial institutions to identify and verify the identity of any PPTA, and the AMLO adopts the same requirement.
Neither the FATF Recommendations nor the AMLO define the scope of PPTA. The AML/CFT Guideline explains that whether the person is considered to be a PPTA should be determined based on the nature of that person’s roles and the activities which the person is authorised to conduct, as well as the ML/TF risks associated with these roles and activities.
MSOs should adopt a framework procedure for assisting their employees in assessing who would ordinarily be considered a PPTA for each customer segment. The approach and rationale should be consistent across departments and customer segments, to the extent possible.
(Key Reference(s): AML/CFT Guideline para. 4.5.1)

Q12：

Lists of signatories
Is an MSO required to identify and verify the identity of all authorized signatories?

A12：

Authorized signatories are only required to be identified and verified if they are a PPTA. Instead of verifying the PPTAs’ identities by reference to the identification document, data or information for each PPTA, MSOs may take other reasonable measures (i.e. appropriate measures which are commensurate with the ML/TF risks). For example, where a business relationship is assessed to present a low ML/TF risk, an MSO could verify the PPTAs’ identities by reference to a list of PPTAs, whose identities and authority to act have been confirmed by a department or person within that customer which is independent to the persons whose identities are being verified (for example, compliance, audit or human resources).
For the avoidance of doubt, as indicated in paragraph 4.5.3 of the AML/CFT Guideline, the MSO is required to identify the PPTA by obtaining at least the following identification information:
Natural person PPTA:
(a) full name;
(b) date of birth;
(c) nationality; and
(d) unique identification number and document type.
Legal person PPTA:
(a) full name;
(b) date of incorporation, establishment or registration;
(c) place of incorporation, establishment or registration (including address of registered office);
(d) unique identification number and document type; and
(e) principal place of business (if different from the address of registered office).
(Key Reference(s): AML/CFT Guideline para. 4.5.3)

Reliability of documents, data or information

Q13：

Electronic documents
What measures is an MSO expected to take to ensure the reliability of identification documents which are in electronic form?

A13：

The AML/CFT Guideline recognises that some commonly used original identification documents can be in electronic form. An MSO should take appropriate measures to ensure the reliability of the electronic documents. The appropriateness of the measures to be taken will depend on the type of identification document in question.

For example, an original certificate of incorporation issued by the Hong Kong Companies Registry is available in electronic form. When accepting a print copy of an electronic certificate of incorporation, an MSO can corroborate with other identification document or information (e.g., record of companies registry) to ensure the reliability of the print copy.

For the avoidance of doubt, corroboration would not be required for instances where the MSO itself has downloaded a particular document (as opposed to having received a print copy of it) from a reliable source (e.g., the Hong Kong Companies Registry’s website).
(Key Reference(s): AML/CFT Guideline para. 4.3.16)

Q14：

Document in foreign language
Does the translation need to be performed by a professional third party (e.g., solicitor)?

A14：

Paragraph 4.3.17 requires MSOs to take appropriate steps to be reasonably satisfied that the documents in foreign language in fact provide evidence of the customer’s identity. There is no requirement that the translation has to be performed by a professional third party (e.g., solicitor) or someone who is qualified; an MSO may obtain a translation from a reliable source, which may include technology solutions and commonly used translation tools.
(Key Reference(s): AML/CFT Guideline para. 4.3.17)

Q15：

Expired documents
If a previously obtained identity document such as passport of a customer is expired, does the MSO need to re-verify any aspect of customer identification by obtaining a current identity document?

A15：

The MSO does not need to re-verify any aspect of customer identification just because of the expiry of a previously obtained identity document. According to footnote 39 to paragraph 5.2 of the AML/CFT Guideline, once the identity of a customer has been satisfactorily verified, there is no obligation to re-verify identity unless in specified circumstances; however, the MSO should take steps from time to time (i.e., during a periodic or trigger event customer due diligence (“CDD”) review) to ensure that the customer information that has been obtained is up-to-date and relevant.
(Key Reference(s): AML/CFT Guideline para. 5.2 and footnote 39)

Enhanced measures for high risk customers and jurisdictions

Q16：

Source of wealth
Does an MSO need to establish source of wealth for every customer?

A16：

No. Under a risk-based approach, MSOs are required to establish the customer’s source of wealth in high risk situations. Examples of these situations include (a) a customer or whose beneficial owner is a foreign politically exposed person (“PEP”); (b) a high risk business relationship with a customer or whose beneficial owner is a domestic PEP or an international organisation PEP; and, where appropriate, (c) other situations that by its nature presents a high money laundering and terrorist financing risk. Therefore, MSOs are not expected to establish source of wealth for each and every customer.

For customers who are non-high risk, some of the information that is obtained by (or otherwise available to) an MSO to understand the purpose and intended nature of the business relationship (e.g., occupation of individual customers, business nature of corporate customers, etc.) should often be sufficient for the MSO to have a basic understanding of the customer’s profile and accordingly be able to monitor that the account balance, and value and volume of transactions, is in line with the expected wealth and profile of the customer.

For high risk customers, there is no expectation to apply the same source of wealth procedures to all these customers in the same manner, or collect evidence dating back decades when the risk does not justify doing so, as it is often impractical.
(Key Reference(s): AML/CFT Guideline para. 4.9.3, 4.9.10 and 4.9.15)

Technical Questions

Q1：

What are the requirements for a computer to access MSOS through Internet?

A1：

The requirements for a computer to access MSOS through Internet are listed below:
MSO Required Settings

Operating System	Microsoft Windows / Mac
Operating System Version	Microsoft Windows 7 / Windows 8 / MacOS X
Browser Version	Microsoft Internet Explorer 9.0-11.0 (Windows) Mozilla Firefox 34.0-36.0 (Windows & MacOS) Google Chrome 39.0-41.0 (Windows) Safari 7.0-8.0 (MacOS)
Javascript	Enabled
Cookies	Enabled
128-bit SSL	Enabled
Chinese Character Support	Hong Kong Supplementary Character Set (HKSCS-2001)
Software for Opening PDF Documents	Adobe Reader

Q2：

Where can I download Adobe Reader?

A2：

You can download Adobe Reader at here.

Q3：

What is the timeout limit for the MSOS?

A3：

The timeout limit of the MSOS is 30 minutes.

Q4：

When uploading supporting document, I received the error message: "File size exceeds limit". What can I do?

A4：

The reason you received the error is due to a file size limit of 2 MB when uploading to our system. You could reduce the file size or split the file into at most 3 files for the upload purpose.

Please note: (1) Please proceed to our Forum of more discussions in relation to MSO; (2) The above information is for reference only.