The Anti-Money Laundering and Counter-Terrorist Financing (Financial Institution) (Amendment) Ordinance 2018 (the “AML (Amendment) Ordinance”) and the Companies (Amendment) Ordinance 2018 (the “Companies (Amendment) Ordinance”) has come into effect on 1 March 2018.
The SCR regime
The Companies (Amendment) Ordinance imposes a new obligation on HK companies to identify its beneficial ownership and members with significant control and to maintain a Significant Controller Register (“SCR”) which is to be kept together with the company kits and other registers such as the Registers of Members and Directors. If a company fails to comply with any of the requirements under the new SCR regime, the company and each of its responsible persons commit an offence and each will be liable to a fine of HK$25,000 and a further daily fine HK$700 whenever applicable. Please refer to our firm’s article on “The Companies (Amendment) Ordinance 2018” for more details.
There are a few salient points to note in relation to SCR:-
AML (Amendment) Ordinance
Apart from imposing the new requirement on Trust or Company Service Providers (the “TCSP”) to obtain a license from the Companies Registry for carrying on their business, the AML (Amendment) Ordinance also extends the obligations to conduct customer due diligence (“CDD”) and to do records-keeping to the legal professional, accounting professional, real estate agents and TCSP licensees.
Since 1 March 2018, enhanced CDD measures shall be implemented by the TCSPs to (1) identify and verify the identity of their customers and their beneficial owners; (2) obtain information on the purpose and the intended nature of the business relationship before establishing business relationship with their customers; and (3) identify and verify the identity of the person purporting to act on behalf of their customers.
Accordingly, companies shall be prepared for more KYC and due diligence from its company secretarial service providers in the future.
What can OLN do for you?
OLN can help by reviewing your companies’ structure and identifying the significant controllers of your companies to ensure compliance with the new SCR regime. Please feel free to contact our Anna Chan at [email protected] or our Victor Ng at [email protected].