Penalties

Consequences of operating a money changing business without MSO licence:

Section 29 of Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance, Cap. 615 stated that 

1) A person commits an offence if the person operates a money service without a licence.
2) A person who commits an offence under subsection (1) is liable on conviction to a fine at level 6 and to imprisonment for 6 months.
3) If a person is convicted of an offence under this section, the magistrate may order that the person is to be disqualified from holding a licence for a period specified in the order beginning on the date of the order.

 

AMLO Appendix 2 section 23 stated that:

A financial institution must take all reasonable measures— 

(a) to ensure that proper safeguards exist to prevent a contravention of any requirement under Part 2 or 3 of this Schedule;

     and

(b) to mitigate money laundering and terrorist financing risks.

 

Section 5 of AMLO stated that:

If a financial institution, i.e., the licence holder (1) knowingly contravenes a specified provision, or (2) with intent to defraud any relevant authority, the financial institution commits an offence and is liable— 

For (1): on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years

For (2): on conviction on indictment to a fine of $1,000,000 and to imprisonment for 7 years

If a person who is an employee of a financial institution or is employed to work for a financial institution or is concerned in the management of a financial institution, (1) knowingly contravenes a specified provision, or (2) with intent to defraud any relevant authority, causes or permits the financial institution to contravene a specified provision, the person commits an offence and is liable— 

For (1): on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years

For (2): on conviction on indictment to a fine of $1,000,000 and to imprisonment for 7 years

 

Section 21 of AMLO stated that:

If a financial institution contravenes a specified provision:

a) to publicly reprimand the financial institution;

b) to order the financial institution to take, by a date specified by the relevant authority, any action specified by the relevant authority for the purpose of remedying the contravention;

     and

c) to order the financial institution to pay a pecuniary penalty not exceeding the amount that is the greater of—

     i) $10,000,000; or

     ii) 3 times the amount of the profit gained, or costs avoided, by the financial institution as a result of the  contravention.

 

Drug Trafficking (Recovery of Proceeds) Ordinance:

- Authorities may investigate, freeze and forfeit the assets related to drug trafficking activities

 

Organized and Serious Crime Ordinance :

- Authorities may forfeit the assets related to organized and serious crime

 

Section 25 of Drug Trafficking (Recovery of Proceeds) Ordinance and Organized and Serious Crime Ordinance:

A person commits an offence if, knowing or having reasonable grounds to believe that any property in whole or in part directly or indirectly represents any person's proceeds of an indictable offence, he deals with that property, he is liable to:

- on conviction upon indictment to a fine of $5,000,000 and to imprisonment for 14 years

United Nations (Anti-Terrorism Measures) Ordinance sections 6, 7, 8, 13 and 14 stated that:

- Anyone providing financial services to terrorists or their associates are liable to fine and to imprisonment for up to 14 years

- Authorities may freeze and forfeit the assets related to terrorists

 

Section 25A of Drug Trafficking (Recovery of Proceeds) Ordinance and Organized and Serious Crime Ordinance, and section 12 & 14 of United Nations (Anti-Terrorism Measures) Ordinance stated that:

- A person commits an offence if, knowing or having reasonable grounds to believe that any property in whole or in part directly or indirectly represents any person's proceeds of an indictable offence or terrorist activity, he deals with that property, he is liable to a fine of $50,000 and to imprisonment for 3 months

- "Tipping off" is also a serious offence with maximum penalty of fine and imprisonment for 3 years