General
s.1(4) & s.12(11),
Sch. 2 10.1 A wire transfer is a transaction carried out by an institution (the ordering institution) on behalf of a person (the originator) by electronic means with a view to making an amount of money available to that person or another person (the recipient) at an institution (the beneficiary institution), which may be the ordering institution or another institution, whether or not one or more other institutions (intermediary institutions) participate in completion of the transfer of the money. An AI should follow the relevant requirements set out in this Chapter with regard to its role in a wire transfer.
10.2 Where an AI is the originator or recipient of a wire transfer, it is not acting as an ordering institution, an intermediary institution or a beneficiary institution and thus is not required to comply with the requirements under section 12 of Schedule 2 or this Chapter in respect of that transaction.
10.3 The requirements set out in section 12 of Schedule 2 and this Chapter are also applicable to wire transfers using cover payment mechanism (e.g. MT202COV payments)52.
s.12(2), Sch. 2 10.4 Section 12 of Schedule 2 and this Chapter do not apply to the following wire transfers:
(a) a wire transfer between an AI and an FI as defined in the AMLO if each of them acts on its own behalf;
(b) a wire transfer between an AI and a foreign institution53 if each of them acts on its own behalf;
(c) a wire transfer if:
(i) it arises from a transaction that is carried out using a credit card or debit card (such as withdrawing money from a bank account through an automated teller machine with a debit card, obtaining a cash advance on a credit card, or paying for goods or services with a credit or debit card), except when the card is used to effect a transfer of money; and
(ii) the credit card or debit card number is included in the message or payment form accompanying the transfer.
52 Reference should be made to the paper “Due diligence and transparency regarding cover payment messages related to cross-border wire transfer” published by the Basel Committee on Banking Supervision in May 2009 and the
“Guidance Paper on Cover Payment Messages Related to Cross-border Wire Transfers” issued by the HKMA in February 2010.
53 For the purpose of section 12 of Schedule 2 and this Chapter, “foreign institution” means an institution that is located in a place outside Hong Kong and that carries on a business similar to that carried on by an FI as defined in the AMLO.
Ordering institutions
s.12(3) & (5), Sch. 2 10.5 An ordering institution should ensure that a wire transfer of amount equal to or above $8,000 (or an equivalent amount in any other currency) is accompanied by the following originator and recipient information:
(a) the originator’s name;
(b) the number of the originator’s account maintained with the ordering institution and from which the money for the wire transfer is paid or, in the absence of such an account, a unique reference number assigned by the ordering institution;
(c) the originator’s address or, the originator’s customer identification number54 or identification document number or, if the originator is an individual, the originator’s date and place of birth;
(d) the recipient’s name; and
(e) the number of the recipient’s account maintained with the beneficiary institution and to which the money for the wire transfer is paid or, in the absence of such an account, a unique reference number assigned to the wire transfer by the beneficiary institution.
s.12(3), (3A) & (5),
Sch. 2 10.6 An ordering institution should ensure that a wire transfer of amount below $8,000 (or an equivalent amount in any other currency) is accompanied by the following originator and recipient information :
(a) the originator’s name;
(b) the number of the originator’s account maintained with the ordering institution and from which the money for the wire transfer is paid or, in the absence of such an account, a unique reference number assigned by the ordering institution;
(c) the recipient’s name; and
(d) the number of the recipient’s account maintained with the beneficiary institution and to which the money for the wire transfer is paid or, in the absence of such an account, a unique reference number assigned to the wire transfer by the beneficiary institution.
10.7 The unique reference number assigned by the ordering institution or beneficiary institution referred to in paragraphs 10.5 and 10.6 should permit traceability of the wire transfer.
54 Customer identification number refers to a number which uniquely identifies the originator to the originating institution and is a different number from the unique transaction reference number referred to in paragraph 10.7.
The customer identification number should refer to a record held by the originating institution which contains at least one of the following: the customer address, the identification document number, or the date and place of birth.
10.8 For a wire transfer of amount equal to or above $8,000 (or an equivalent amount in any other currency), an ordering institution should ensure that the required originator information accompanying the wire transfer is accurate.
s.3(1)(c) & (d), Sch.
2 10.9 For an occasional wire transfer involving an amount equal to or above $8,000 (or an equivalent amount in any other currency), an ordering institution should verify the identity of the originator.
For an occasional wire transfer below $8,000 (or an equivalent amount in any other currency), the ordering institution is in general not required to verify the originator’s identity, except when several transactions are carried out which appear to the ordering institution to be linked and are equal to or above $8,000 (or an equivalent amount in any other currency), or when there is a suspicion of ML/TF.
s.12(7), Sch. 2 10.10 An ordering institution may bundle a number of wire transfers from a single originator into a batch file for transmission to a recipient or recipients in a place outside Hong Kong. In such cases, the ordering institution may only include the originator’s account number or, in the absence of such an account, a unique reference number in the wire transfer but the batch file should contain required and accurate originator information, and required recipient information, that is fully traceable within the recipient country.
s.12(6), Sch. 2 10.11 For a domestic wire transfer55, an ordering institution may choose not to include the complete required originator information in the wire transfer but only include the originator’s account number or, in the absence of an account, a unique reference number, provided that the number permits traceability of the wire transfer.
s.12(6), Sch. 2 10.12 If an ordering institution chooses not to include complete required originator information as stated in paragraph 10.11, it should, on the request of the institution to which it passes on the transfer instruction or the HKMA, provide complete required originator information within 3 business days after the request is received.
In addition, such information should be made available to law enforcement agencies immediately upon request.
Intermediary institutions
s.12(8), Sch. 2 10.13 An intermediary institution should ensure that all originator and recipient information which accompanies the wire transfer is retained with the transfer and is transmitted to the institution to which it passes on the transfer instruction.
55 Domestic wire transfer means a wire transfer in which the ordering institution and the beneficiary institution and, if one or more intermediary institutions are involved in the transfer, the intermediary institution or all the intermediary institutions are FIs (as defined in the AMLO) located in Hong Kong.
10.14 Where technical limitations prevent the required originator or recipient information accompanying a cross-border wire transfer from remaining with a related domestic wire transfer, the intermediary institution should keep a record, for at least five years, of all the information received from the ordering institution or another intermediary institution. The above requirement also applies to a situation where technical limitations prevent the required originator or recipient information accompanying a domestic wire transfer from remaining with a related cross-border wire transfer.
s.19(2), Sch. 2 10.15 An intermediary institution should establish and maintain effective procedures for identifying and handling incoming wire transfers that do not comply with the relevant originator or recipient information requirements, which include:
(a) taking reasonable measures, which are consistent with straight-through processing, to identify cross-border wire transfers that lack required originator information or required recipient information; and
(b) having risk-based policies and procedures for determining: (i) when to execute, reject, or suspend a wire transfer lacking required originator information or required recipient information; and (ii) the appropriate follow-up action.
s.12(10)(a), Sch. 2 10.16 In respect of the risk-based policies and procedures referred to in paragraph 10.15, if a cross-border wire transfer is not accompanied by the required originator information or required recipient information, the intermediary institution should as soon as reasonably practicable, obtain the missing information from the institution from which it receives the transfer instruction. If the missing information cannot be obtained, the intermediary institution should either consider restricting or terminating its business relationship with that institution, or take reasonable measures to mitigate the risk of ML/TF involved.
s.12(10)(b), Sch. 2 10.17 If the intermediary institution is aware that the accompanying information that purports to be the required originator information or required recipient information is incomplete or meaningless, it should as soon as reasonably practicable take reasonable measures to mitigate the risk of ML/TF involved.
Beneficiary institutions
s.19(2), Sch. 2 10.18 A beneficiary institution should establish and maintain effective procedures for identifying and handling incoming wire transfers that do not comply with the relevant originator or recipient information requirements, which include:
(a) taking reasonable measures (e.g. post-event monitoring) to
identify domestic or cross-border wire transfers that lack required originator information or required recipient information; and
(b) having risk-based policies and procedures for determining: (i) when to execute, reject, or suspend a wire transfer lacking required originator information or required recipient information; and (ii) the appropriate follow-up action.
s.12(9)(a) &
s.12(10)(a), Sch.2 10.19 In respect of the risk-based policies and procedures referred to in paragraph 10.18, if a domestic or cross-border wire transfer is not accompanied by the required originator information or required recipient information, the beneficiary institution should as soon as reasonably practicable, obtain the missing information from the institution from which it receives the transfer instruction. If the missing information cannot be obtained, the beneficiary institution should either consider restricting or terminating its business relationship with that institution, or take reasonable measures to mitigate the risk of ML/TF involved.
s.12(9)(b) &
s.12(10)(b), Sch.2 10.20 If the beneficiary institution is aware that the accompanying information that purports to be the required originator information or required recipient information is incomplete or meaningless, it should as soon as reasonably practicable take reasonable measures to mitigate the risk of ML/TF involved.
s.3(1)(c), Sch. 2 10.21 For a wire transfer of amount equal to or above $8,000 (or an equivalent amount in any other currency), a beneficiary institution should verify the identity of the recipient, if the identity has not been previously verified.
Chapter 11 – CORRESPONDENT BANKING AND OTHER SIMILAR