As one of the freest economies and most advanced international financial centres in the world, Hong Kong engages in a robust trade with free flow of capital. However, this situation brings with it the risk of having money laundering and terrorist financing activities. To further reinforce Hong Kong’s capabilities in combating these illegal activities, 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. Mr Law Chi Kwong, President of Hong Kong Jade Association (HKJA), welcomes the move and expresses his support for the implementation of the regime. As a member of the jade trade, he points out that the Government has provided assistance in the registration process, enabling them to promptly adapt to the new regime.

Jade trade gets ready for the registration regime confidently

The registration regime for dealers in precious metals and stones is divided into Category A and B. Any dealer who intends to engage in non-cash transaction(s) with total value at or above HKD120,000 in the course of business in Hong Kong must register as a Category A registrant. Any dealer who intends to engage in cash transaction(s) and non-cash transaction(s) with total value at or above HKD120,000 in the course of business in Hong Kong must register as a Category B registrant. A Category B registrant is also subject to anti-money laundering and counter-terrorist financing supervision when conducting cash transaction(s) with total value at or above HKD120,000.

Mr Law points out that jade transactions are usually settled by cheque or bank transfer, and very seldom with a large amount of cash. Moreover, the Customs has clearly explained the difference between Category A and B registrants to the trade, enabling the trade to select the appropriate category for registration based on their business circumstances or requirements. He believes that the jade trade is able to readily adapt to the registration regime with the Government assistance.

Registration regime enables the trade to lift vigilance and maintain close collaboration with the Government

Mr Law admits that the jade trade had sometimes been uncertain in how to follow up large and suspicious transactions, but the registration regime has provided clear guidelines in this respect on how to conduct customer due diligence. However, the trade is still not fully familiar with relevant sections of the legislation, and will require more time to understand the details therein. It is hoped that the Government will continue to offer support to the trade for smoothly executing the registration requirements. Since the establishment of the regime, the Customs has maintained close liaison with the trade, reminding them of the need for constant vigilance, thereby reducing the risk of being exploited by criminals to engage in money laundering and terrorist financing activities.

When asked on how the trade would collaborate in implementing the newly amended legislation, Mr Law says, “The trade would fully co-operate with the Government and Customs. In conducting our daily business, we would pay special attention to suspicious transactions involving large amounts of cash; we would also encourage our peers to contact the authorities immediately on any suspicious clients, or any transactions with unknown monetary sources.”