Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Bill 2022 Gazetted
ISSUING AUTHORITY:
Government of Hong Kong SAR
DATE OF GAZETTAL:
June 24, 2022
On June 24, 2022, the Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Bill 2022 (“Amendment Bill”) was gazetted. The aim of the Amendment Bill is to mitigate risks of money laundering and terrorist financing in response to recommendations from Financial Action Task Force (“FATF”) and recent changes to FATF standards.
Two new regimes are introduced by the Amendment Bill:
(1) A licensing regime for virtual asset service providers (“VASP”)
(2) A registration regime for dealers in precious metals and stones (“DPMS”)
Under the proposed VASP licensing regime, anyone who seeks to carry on the business of operating a virtual asset exchange will be considered a VASP and will be required to obtain a licence from the Securities and Futures Commission in Hong Kong, and to abide by the anti-money laundering and counter-terrorist financing (“AML/CTF”) obligations and other regulatory requirements.
The proposed DPMS registration regime requires a DPMS, that is any person who seeks to carry on a business of dealing in precious metals and precious stones in Hong Kong, to register with the Commissioner of Customs and Excise. Registrants will be classified into two categories. Only Category B (but not Category A) registrants may engage in cash transactions with customers at or above HK$120,000, and they must meet a fit and proper test and will be subject to AML/CTF and other regulatory requirements.
The Amendment Bill has been introduced into the Legislative Council of Hong Kong SAR. It is proposed that the new regimes will come into effect in the first quarter of 2023.
Reference:
Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Bill 2022
Shandong Chenming Paper Holdings Limited v Arjowiggins HKK 2 Limited – Hong Kong Court of Final Appeal Clarified the “Benefit” Requirement for Winding Up Foreign-Incorporating Companies in Hong Kong
ISSUING AUTHORITY:
Court of Final Appeal of Hong Kong SAR
DATE OF JUDGMENT:
June 14, 2022
On June 14, 2022, the Court of Final Appeal of Hong Kong SAR (“CFA”) handed down a judgment in the case of Shandong Chenming Paper Holdings Limited v Arjowiggins HKK 2 Limited [2022] HKCFA 11. The judgment concerns the second of the three core requirements for the Hong Kong court to exercise its jurisdiction to wind up a foreign-incorporated company in Hong Kong. The said three core requirements are that:
(1) There must be a sufficient connection with Hong Kong;
(2) There must be a reasonable possibility that the winding-up order would benefit those applying for it; and
(3) The court must be able to exercise jurisdiction over one or more persons in the distribution of the company’s assets.
One of the main contentions of the Appellant in its appeal to the CFA was that the benefit under the second requirement had to be a benefit resulting from the making of a winding-up order, not from any pressure or leverage arising before such an order was actually made. Further, the relevant benefit had to be money or property convertible into money, not an intangible benefit such as leverage.
The CFA held that the second requirement could be satisfied by the commercial pressure placed on the debtor to pay an undisputed, or indisputable, debt by the invocation of the court’s winding-up procedures. In the present case, this was satisfied by the presentation of the winding-up petition. The benefit for the purposes of the second requirement is not limited only to one arising from the making of a winding-up order and need not be monetary or tangible in nature.
As the law now stands, it has become easier for creditors to wind up foreign-incorporated companies in Hong Kong in order to recover their disputed debts.
Reference:
Shandong Chenming Paper Holdings Limited v Arjowiggins HKK 2 Limited [2022] HKCFA 11
Arbitration and Legal Practitioners Legislation (Outcome Related Fee Structures for Arbitration) (Amendment) Ordinance 2022 Came into Effect
ISSUING AUTHORITY:
Government of Hong Kong SAR
EFFECTIVE DATE:
June 30, 2022
On June 30, 2022, the Arbitration and Legal Practitioners Legislation (Outcome Related Fee Structures for Arbitration) (Amendment) Ordinance 2022 (“Ordinance”) came into effect. The Ordinance recognises the effectiveness of outcome related fee structures (“ORFS”) and authorises the adoption of ORFS by practitioners in arbitration and related proceedings.
The Ordinance introduces three types of ORFS, namely:
(1) Conditional fee agreement (CFA): A lawyer agrees with client to be paid a success fee in the event of a successful outcome for the client in the matter, where the success fee is calculated by reference to the fee that the lawyer would otherwise have charged the client for the matter;
(2) Damages-based agreement (DBA): A lawyer agrees with client to be paid for the matter only in the event the client obtains a financial benefit in the matter, and such payment is calculated by reference to the financial benefit that is obtained by the client in the matter;
(3) Hybrid damages-based agreement (Hybrid DBA): A lawyer agrees with client to be paid (a) in the event the client obtains a financial benefit in the matter — a payment calculated by reference to the financial benefit; and (b) in any event — a fee, which may or may not be calculated at a discount, for the legal services rendered by the lawyer for the client during the course of the matter.
ORFS is applicable in relation to an arbitration for which the place of arbitration is in or outside Hong Kong. It provides clients with more flexible fee arrangements. It also allows apportionment of risks which will certainly attract more clients to adopt arbitration as an alternative dispute resolution mechanism.
Reference:
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