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New laws address due diligence over company ownership

Hong Kong, 8 March 2018: Boase Cohen & Collins lawyers have been given a detailed briefing on two new pieces of legislation designed to further combat money laundering and enhance transparency surrounding corporate ownership.

The Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) (Amendment) Ordinance brings changes to the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) and is part of the Hong Kong Government’s drive to ensure its legislation reflects international standards.

The amendment, which took effect on 1 March, means that so-called designated non-financial businesses and professions (DNFBPs) are now subject to the same customer due diligence and record-keeping requirements as financial institutions. Solicitors and foreign lawyers are among the DNFBPs together with accounting professionals, estate agents and trust or company service providers (TCSPs).

The Companies (Amendment) Ordinance 2018, which also came into effect at the beginning of this month, requires Hong Kong companies to keep and maintain an up-to-date significant controllers register (SCR).

The intention is to enhance transparency in the beneficial ownership of Hong Kong incorporated companies and to improve Hong Kong's regulatory regime on combating money laundering and terrorist financing. The SCR must contain particulars of significant controllers of the applicable company, who are a natural person or a legal entity with significant control over the company.

BC&C’s lawyers were briefed by renowned legal consultant Judith Sihombing in a comprehensive presentation at the firm’s offices. Ms Sihombing, who lectures in law and conducts bespoke training and continuing professional development seminars for the legal community, covered myriad aspects of the legislation, including a new licensing scheme for TCSPs.

“Both pieces of legislation have a direct impact on law firms, be it in their capacity as a DNFBP or when advising a company about preparing and maintaining an SCR,” said BC&C Senior Partner Colin Cohen, who attended the briefing “In this regard, it is vital for our lawyers to be fully conversant with the new regulations in order to give the best possible service to clients.

“We are grateful to Judith for her illuminating and authoritative presentation. All who attended felt it was a hugely worthwhile exercise.”

Register PHOTO

BC&C lawyers listen to the presentation by Judith Sihombing (seated at computer).