In the wake of Hong Kong's implementation of the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) (Amendment) Ordinance 2018 (AMLO), the role of the Designated Representative has emerged as a pivotal aspect of corporate governance. With the introduction of this regulation, the Designated Representative's role has gained prominence in safeguarding transparency and accountability within companies.
What is the role of a Designated Representative in Hong Kong under the AMLO Regulation?
The AMLO Regulation, enacted to combat money laundering and terrorist financing, requires companies to designate a representative who can assist law enforcement agencies with access to the company's beneficial ownership information. This representative is crucial in ensuring transparency and accountability in financial transactions.
The Designated Representative serves as the link between the company and law enforcement authorities, providing access to the Significant Controllers Register (SCR).
What is the Significant Controllers Register (SCR)?
The SCR contains information about the company's ultimate beneficial owners (UBOs) and individuals with significant control over the company.
A significant controller is an individual or legal entity that holds more than 25% of the company's issued shares, holds more than 25% of the company's voting rights, has the right to appoint or remove a majority of directors, or has significant influence or control over the company.
Reporting and Compliance
Companies are obligated to establish and maintain an up-to-date SCR. The Designated Representative is responsible for ensuring that the SCR accurately reflects the company's significant controllers. Additionally, the Designated Representative must be available to provide information to law enforcement agencies upon requests.
Which info are mandatory to state in the SCR?
The necessary information for an individual subject consists of:
- Full name.
- Correspondence address.
- Identity Card Number or passport number along with the issuing country.
- The date when the individual assumed the role of a registrable person within the company.
- The specifics of the individual's influence over the company in accordance with the five aforementioned conditions.
For a legal entity, the essential details are:
- Full name.
- The registration number of the legal entity or its equivalent as per the jurisdiction of incorporation or formation.
- The address of its registered office or principal office.
- The legal structure of the legal entity and the governing law.
- The date when the legal entity assumed the status of a registrable legal entity within the company.
- The nature of the legal entity's control over the company in line with the five specified conditions.
As part of Hong Kong's commitment to international anti-money laundering efforts, the Designated Representative role plays a pivotal role in ensuring that companies maintain accurate and transparent records of their significant controllers. Failure to comply with the above obligation is a criminal offence. The company and every responsible person of the company are liable to a fine at HK$ 25,000 and further daily fine of HK$700.
Who can be appointed as Designated Representative in Hong Kong?
A company's designated representative must be either
- A member, director or an employee of the company who is a natural person resident in Hong Kong; or
- An accounting professional, a legal professional or a TCSP licensee as defined in the Anti-Money Laundering and Counter-Terrorism Financing Ordinance Cap. 615 (namely “AMLO”).
Conclusion
In conclusion, the role of the Designated Representative in Hong Kong, as mandated by the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) (Amendment) Ordinance 2018 (AMLO), stands as a vital pillar of corporate governance. Non-compliance with these obligations is not taken lightly, as it constitutes a criminal offence.
If you are looking for a Designated Representative, contact us and we can find the solution that fits all your needs.