The Monetary Authority has issued a revised supplement to its money laundering prevention guideline. The supplement covers the account opening process for new customers, monitoring process for existing customers and latest requirements relating to terrorist financing.

Authority Executive Director Simon Topping said it has been their aim to ensure there are adequate safeguards against money laundering in the banking system, while at the same time having regard to practicalities and the need to be business-friendly.

"These measures reflect Hong Kong's longstanding and on-going commitment to meeting international standards in fighting money laundering and terrorism," he said.

'Know-Your-Customer' principles included

The supplement sets out the latest 'Know-Your-Customer principles', taking account of the requirements of the paper on Customer Due Diligence for Banks that the Basel Committee on Banking Supervision issued in October 2001 and the revised Forty Recommendations issued by the Financial Action Task Force on Money Laundering from last June.

It covers not only the account opening process for various types of new customers, such as individuals, companies, trust and nominee accounts, introduced customers, non-face-to-face customers, respondent banks and politically exposed persons, but also the on-going monitoring process for existing customers.

It also incorporates the latest requirements relating to terrorist financing.

Interpretative notes also developed

In collaboration with the Association of Banks and the DTC Association, a set of interpretative notes has been developed to provide practical guidance on implementing the requirements of the supplement and explain the use of a risk-based approach in various due diligence processes.