Office of the Commissioner of Insurance - Circulars on Anti-Money Laundering Matters in 2001

I wrote to you on 5 October 2001 advising you that the Philippines enacted the "Anti-Money Laundering Act of 2001" on 29 September 2001 and hence the proposed further counter-measures against the Philippines was suspended.

In November 2001, the FATF completed its assessment of the new law in the Philippines. It decided not to apply counter-measures to the Philippines at this stage but the situation in this country should be closely reviewed in January/February 2002. I will keep you informed of any further development on this subject in due course.

Notwithstanding the suspension of the application of the proposed counter-measures, the Philippines is still included in the FATF's list of non-cooperative countries and territories ("NCCTs"). You are therefore advised to continue to give special attention to businesses and transactions with persons, including companies and financial institutions, in the Philippines, in accordance with Recommendation 21 Note of the FATF Forty Recommendations. Where applicable, the updated list of suspicious activity indicators attached to my letter of 27 September 2001 should be used to help identify suspicious transactions which are reportable to the Joint Financial Intelligence Unit ("JFIU") for prompt investigation in order to ensure compliance with the Guidance Note on Prevention of Money Laundering issued by the Insurance Authority.

The Nauru Government enacted an Anti-Money Laundering Act in August 2001 after the FATF notified the country of its inadequate progress made to address the serious deficiencies in its anti-money laundering regime. However, this new legislation was found to have several deficiencies and did not address the major money laundering problem in Nauru. In September 2001, the FATF urged the Nauru Government to enact appropriate legislative amendments by 30 November 2001, failing which counter-measures would apply to Nauru.

On 30 November 2001, the Nauru Government still had not enacted appropriate legislative amendments as requested by the FATF. The FATF therefore called on its members to apply counter-measures to Nauru with immediate effect. Such counter-measures, as applicable in the Hong Kong context, are detailed in paragraphs 7 to 11 of the jurisdiction-specific advisory which is attached at Annex I. Hong Kong, being one of the FATF members, is obliged to follow the decision of the FATF and you are requested to implement counter-measures to Nauru.

The FATF will further review the NCCT list. Changes to the list, if any, will be conveyed to you through similar advisory in due course.

United States Executive Order 13224 ("Executive Order")

Meanwhile, you may recall that I drew your attention to the above Executive Order and four lists of persons/entities designated under the Executive Order in my previous letters of 5 October 2001,
19 October 2001 and 8 November 2001 .

The US Government designated under the Executive Order a fifth list of 3 entities on 4 December 2001 which are believed to provide financial or material support to, financial or other services in support of, or are otherwise associated with Hamas, a Foreign Terrorist Organization already designated under the Executive Order. The list of these 3 entities is attached at Annex II. You are advised to browse the website of the Office of Foreign Assets Control under the US Treasury (www.ustreas.gov/ofac) regularly for the latest information.

You should review your records carefully to see whether you have had, or currently have, accounts, transactions or dealing with those 3 entities. If such review reveals any suspicious accounts, transactions or dealings, you should promptly notify the JFIU in order to ensure that you fulfil your obligations under section 25A of the Organized and Serious Crimes Ordinance in the usual way.

Should you have any enquiries, please contact Mr. William Hsieh at 2867 4529 or Ms Carol Hui at 2867 2551.