With the concerted efforts of the Government and the business sector, Hong Kong has been playing an indispensable role in the international trade arena.  To reinforce Hong Kong’s status as an international financial centre, the Government has earlier established a registration regime for dealers in precious metals and stones through amending the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615).  The regime has been implemented since 1 April 2023.  Regarding the establishment of the registration regime, the Federation of Hong Kong Watch Trades & Industries Limited explained the benefits of the registration regime, and how the watch industry has collaborated with the Government to implement the regime.

The registration regime helps reduce the business risk of the watch industry

The Federation expresses their support for the implementation of the registration regime, and Mr Kan Lam, Vice Chairman of the Federation, points out that a sound regime helps the industry establish a more positive image in the society.  Under the current regime, any watch that contains or is attached with any precious metal or stone is regarded as a precious product, and is regulated under the registration regime.  Dealers who engage in any transaction(s) with total value at or above HKD120,000 in the course of business in Hong Kong must register with the Customs, while Category B registrants must comply with anti-money laundering and counter-terrorist financing requirements such as customer due diligence and record keeping.

As the watch industry members often come across with large transactions involving large amount of cash, he believes the regime would effectively curb the risk of criminal activities through the trade of high-value watches. He also points out that the new legislation has provided clear guidelines, hence preventing dealers from breaking the law unintentionally.
“Various regions all over the world are recently shoring up their capability in combating money-laundering. The European Union, for instance, has introduced various measures in this respect,” Mr Kan Lam notes. “In view of frequent capital flows happening in Hong Kong, criminals might take advantage of such convenience in money laundering and committing other illegal acts. The establishment of the registration regime has undoubtedly enabled Hong Kong to meet international standards in combating money laundering. In the long run, it also helps reinforce Hong Kong’s status as an international financial centre.”

The watch industry actively collaborates with Customs in implementation of the regime

Chairman Mr Jackson Lam and Vice Chairman Mr Kan Lam both point out that, as a representative of the watch industry, the Federation will take a leading role in collaborating with the Customs.  To ensure sufficient understanding and compliance of the regime by the trade, the Federation will act as a communication bridge, explain the regime to members, and timely reflect the industry’s views to the Government. This will ensure both adherence to the law by dealers and development of the watch industry at the same time, thereby achieving a win-win situation.

“As Hong Kong is a global economic and logistics hub, the watch trade understands the necessity for the regime,” says Mr Jackson Lam. “Our Federation is committed to helping the Government to implement this registration regime.”

“We appreciate the consideration demonstrated by the Customs during the legislative process, so as to develop a flexible and effective regime which allows the trade to choose the suitable category for registration,” adds Mr Kan Lam. “The legislation spells out the rules to follow and provides for better protection in doing business, thereby further reinforcing the competitiveness of the trading sector in Hong Kong.”

Source: The Standard