Acting in response to recommendations from the Asia/Pacific Group on Money Laundering (APG), the FSC on 24 December 2020 amended the aforementioned Regulations in order to subject CPAs to stronger due diligence requirements. Key points of the amended provisions are as follows:
1.Timetable for the performance of customer due diligence: Newly added provisions expressly state that before a CPA completes customer due diligence, the CPA shall not establish a business relationship or conduct a transaction with that customer, provided that this restriction does not apply when a CPA verifies the existence of the following conditions: (1) the customer’s ML/TF exposures are being effectively managed; (2) the business relationship will not interfere with normal conduct of the customer’s business; and (3) the CPA will promptly verify the identities of the customer and the customer’s beneficial owners as quickly as possible after establishment of the business relationship.
2.Mechanism for screening of surnames and entity names: Newly added provisions require a CPA to use a risk-based approach to establish a set of policies and procedures for screening the surnames and/or entity names of a customer’s transaction counterparties, to record screening results, and to keep the results on file.