A proprietor of a licensed money service operator was ordered by the Customs and Excise Department (C&ED) on December 22 to pay a pecuniary penalty of $21,000 for failing to comply with the customer due diligence and record-keeping requirements as stipulated in the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance. This is the first disciplinary action taken against a money service operator (MSO), with a pecuniary penalty imposed, since the implementation of the Ordinance on April 1, 2012.
A compliance inspection conducted by C&ED officers revealed that the proprietor had failed to identify, verify and record the identification of originators and customers in respect of remittance and money exchange transactions conducted between May 2013 and April 2014, contravening the requirements under the Ordinance.
The proprietor was prosecuted in June 2015 and sentenced by a court to a community service order. The C&ED took further disciplinary action against the proprietor in order to send a deterrent message to the MSO sector and remind the sector’s members of the importance of complying with the statutory requirements of the Ordinance.
The C&ED reminds all licensed money service operators to comply with the customer due diligence and record-keeping requirements as stipulated in the Ordinance. The maximum penalty upon conviction is a fine of $1 million and imprisonment for seven years.
In addition, the C&ED may take disciplinary action by way of issuing a public reprimand, imposing a pecuniary penalty not exceeding the amount that is the greater of $10 million or three times the amount of the profit gained or costs avoided, and/or ordering a remedial action.
A copy of the Statement of Disciplinary Action in relation to the matter is available on the website of the C&ED (eservices.customs.gov.hk/MSOS/common/enforcenew?request_locale=en).
Ends/Friday, December 29, 2017