Last October the Securities and Futures Commission of Hong Kong issued its final word about its proposals to amend a guideline to do with money laundering and terrorist finance. It has now updated the AML checklist that it wants every firm to use accordingly.

The SFC has designed the AML/CFT Self-Assessment Checklist, as it is called, to provide licensed corporations and associated entities with a structured and comprehensive way in which they can assess their compliance with Hong Kong's most important money-laundering rules. The SFC advises these entities to use it as part of the regular reviews that they must undertake in their efforts to monitor their own compliance with the AML rules. The frequency and extent of such reviews should be commensurate with the money-laundering risks that they are running and the size and extent of their businesses.

Thanks to the SFC's revision of its guideline, which also took place last year, the categories of politically exposed persons (PEPs) were expanded to include "international organisation PEPs" (i.e. persons entrusted with prominent functions by international organisations such as the United Nations). Firms have long had to scrutinise foreign PEPs especially closely and they now have to do the same to domestic PEPs and "international organisation PEPs" because the SFC thinks that these are highly risky.

In addition, the changes allow firms the flexibility to adopt reasonable risk-based measures to verify information to do with identifying customers. To facilitate "non-face-to-face customer onboarding," firms are allowed to take a mix of supplementary steps (using appropriate technology, checking against reliable databases or registries, or obtaining certified copy identification documents) to guard against the likelihood of impersonation.