The Anti-Money Laundering and Counter-Terrorist Financing Ordinance establishes a regulatory framework to combat financial crime in Hong Kong through mandatory customer due diligence (CDD), record-keeping obligations, licensing regimes, and supervisory powers. While it does not explicitly refer to WTR or the FATF Travel Rule, it imposes rules that closely align with those international standards, particularly regarding information traceability and transparency in fund transfers.

Customer Due Diligence & Record Keeping

Part 2 and Schedule 2 of the Ordinance impose CDD and record-keeping requirements on financial institutions and designated non-financial businesses and professions (DNFBPs). These requirements ensure that institutions verify customer identity, understand ownership and control structures, and retain sufficient records to reconstruct individual transactions. In the context of wire transfers, these provisions ensure that information on the originator and beneficiary can be traced and scrutinised, satisfying a core objective of WTR.

Virtual Asset Service Providers (VASPs)

The Ordinance was amended to include a licensing and regulatory regime for virtual asset service providers, reflecting the application of equivalent obligations to those engaged in fiat wire transfers. These include fit and proper requirements, client due diligence, ongoing supervision, and data integrity obligations. VASPs are prohibited from conducting business unless licensed, and all associated transactions are subject to inspection and audit. This integration supports the WTR principle that virtual asset transfers carry the same transparency standards as traditional payments.

Powers of Supervision & Investigation

The Ordinance gives broad powers to relevant authorities to enter business premises, inspect records, and carry out investigations. These apply not only to financial institutions but also to associated entities and service providers involved in fund transfers. Records must be accessible in legible form and retained even in electronic formats, ensuring the integrity and availability of transfer data over time.

Offences & Sanctions

Criminal penalties are established for non-compliance with AML/CTF requirements, including providing false information, obstructing investigations, or destroying records. Both individuals and corporate entities may be prosecuted, with penalties including significant fines and custodial sentences. This enforcement framework ensures that information associated with fund transfers is accurate, available for review, and used to support legitimate law enforcement efforts.

International Cooperation

The Ordinance enables regulatory cooperation with foreign authorities concerning virtual asset activities and financial crime enforcement. Provisions under Part 5B allow the sharing of transaction data, subject to safeguards, with overseas regulators when such transfers may impact public interest or financial stability. This cooperative framework supports the WTR mandate of cross-border information sharing to detect and disrupt international illicit fund flows.

Conclusion: WTR Compliance Integration

The Anti-Money Laundering and Counter-Terrorist Financing Ordinance provides a robust legal basis for enforcing transparency and traceability in financial transactions, including those involving virtual assets. By mandating customer due diligence, record-keeping, licensing, and supervision, and by applying these rules to both fiat and virtual asset service providers, the Ordinance achieves the underlying objectives of wire transfer regulation. It enables Hong Kong to meet global standards for financial integrity while maintaining rigorous enforcement and international cooperation mechanisms.