May 12, 2017: HK SFC AML/CTF Circular

The latest circular from the Hong Kong Securities and Futures Commission (HK SFC) contains a PDF of the latest notices from the United Nations ISIL (Da’esh) and Al-Qaida Sanctions Committee, as well as the following notice about combating terrorist financing:

We would like to draw the attention of licensed corporations (“LCs”) and associated entities (“AEs”) to the individuals and entities designated as Specially Designated Global Terrorists (“SDGT”) under the sanctions programs of the US Government. These terrorist-related designations are identified by the program tag “[SDGT]” at the end of their entries in the Specially Designated Nationals and Blocked Persons List (“SDN List”) Note 1. These SDGT designations include, among others, designations under the Executive Order 13224 Note 2.

LCs and AEs are advised to refer to the SDN List available on the website of the US Treasury (https://www.treasury.gov/ofac/downloads/sdnlist.pdf) for the current list of SDGT
designations Note 3. The SDGT designations, which include terrorist-related designations under the Executive Order 13224 and other US executive orders, laws and regulations, will assist LCs and AEs in identifying transactions with terrorist suspects and designated parties, and fulfilling the obligation to report any transactions known or suspected to be terrorist-related to the Joint Financial Intelligence Unit (“JFIU”) pursuant to the UNATMO.

LCs and AEs should browse the website of the US Treasury (https://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/archive.aspx) Note 4 regularly for additional names and other changes made by the US Government from time to time to the list of SDGT designations.

LCs and AEs should check against their records the names in the updated list specifying terrorists and terrorist associates designated by the UNSC published under the UNATMO and the names of individuals and entities designated as SDGT in the SDN List, and report any transactions or relationships they have or have had with the named persons or entities to the JFIU.

Furthermore, LCs and AEs are reminded to refer to Chapter 6 of the Guideline on Anti-Money Laundering and Counter-Terrorist Financing which contains guidance on the appropriate measures that LCs and AEs should take to conduct checks against the relevant updated lists of terrorist-related designations and to ensure compliance with the UNATMO Note 5.

With the following footnotes:

Note 1 Please note that the SDN List contains designated individuals and entities of a number of different sanctions programs administered by the US Treasury, including some that are not related to terrorists or terrorist organizations.The SDN List is updated whenever there are any additions, changes or removals of designations under the relevant sanctions programs.
Note 2 Please note that an SDGT designation under the Executive Order 13224 is not separately identified as such.
Note 3 The hyperlink reference in our circulars issued on 15 April 2016 and before regarding new designations under the Executive Order 13224 pointed to a document entitled “Terrorism – What you need to know about U.S. Sanctions” posted on the US Treasury’s website. As the document is no longer available, LCs and AEs are advised to refer to the SDN List for the terrorist-related designations under the SDGT scheme.
Note 4 Additional names or other changes in a particular year to the list of SDGT designations can be found in a document entitled “SDN Changes” for that year, under the sections which indicate that certain [SDGT] entries have been added, changed or removed on particular dates. These documents are available on the website of the US Treasury under the section “Archive of Specially Designated Nationals (SDN) List Changes from 2001 to Present (in .pdf format)”.
Note 5 Under paragraph 6 of the Prevention of Money Laundering and Terrorist Financing Guideline issued by the Securities and Futures Commission for Associated Entities, AEs that are not authorized financial institutions are expected to have regard to the provisions of the AML Guideline as if they were themselves LCs.

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