Actually, two guidances – one for stored value facility licensees and one for Authorized Institutions. Here’s the text of the Authorized Institutions one:
8 March 2018
The Chief Executive
All Authorized Institutions
Dear Sir/Madam,
FATF Guidance on Counter Proliferation Financing
I am writing to draw your attention to a guidance paper recently issued by the Financial Action Task Force (FATF) entitled “Guidance on Counter Proliferation Financing – The Implementation of Financial Provisions of United Nations Security Council Resolutions to Counter the Proliferation of Weapons of Mass Destruction”1, which is available on the FATF’s website (http://www.fatf-gafi.org/publications/financingofproliferation/documents/gui dance-counter-proliferation-financing.html).
The paper provides guidance to facilitate both public and private sector stakeholders in understanding and implementing proliferation financing-related Targeted Financial Sanctions made under United Nations Security Council Resolutions (UNSCRs). Various sections of the guidance are relevant for Authorized Institutions (AIs) to better understand and mitigate proliferation financing risks, including:
• Taking note of circumstances where customers and transactions are more vulnerable to be involved in proliferation financing activities, including factors that are relevant to the sanctions regime on the Democratic People’s Republic of Korea;
• Identifying high risk customers and transactions, and applying enhanced scrutiny, using a risk-based approach; and
• Undertaking reasonable efforts to collect additional information (e.g. available typologies of proliferation finance) related to identified high-risk customers and transactions in order to identify, and avoid engaging in, prohibited activities, and to enable follow-up actions.
AIs are recommended to review the paper carefully to enhance the understanding of proliferation financing-related Targeted Financial Sanctions and the range of possible approaches that can be adopted, depending on individual AI’s own situation, risk profile and risk appetite.
The HKMA is also reviewing the guidance to the public sector as set out in the paper, including the role of financial supervisors in contributing to the effective sharing of information such as typologies and case studies. The HKMA has recently discussed with industry representatives and other stakeholders to understand some of the challenges encountered in this area and we will continue to work closely with the banking industry and all relevant public authorities in combating proliferation financing.
Yours faithfully,
Links:
FATF Guidance – Stored Value Facility Licensees, Authorized Institutions
