Customs Sanctions MSO Bank Account Lapses
In September 2023, Customs penalised an MSO for failing to report bank account changes within statutory deadlines.
On September 20, 2023, the Hong Kong Customs and Excise Department (C&ED) issued a formal Statement of Disciplinary Action against a licensed Money Service Operator (MSO) under Part 5B of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO). The licensee was ordered to take mandatory corrective action for contravening Section 40 of the Ordinance by failing to notify the Commissioner of Customs and Excise within the specified timeframe regarding changes to a bank account used for providing money services.
Under the regulatory regime, MSOs are strictly prohibited from utilizing undeclared bank accounts for currency exchange or cross-border remittance activities. The C&ED mandates that any addition, termination, or modification of business bank accounts must be formally submitted and pre-cleared or reported within the statutory window. Undeclared banking corridors are viewed by supervisory authorities as significant money laundering vulnerabilities because they can allow high-velocity funds to bypass oversight and routine audit sampling.
This disciplinary determination serves as a critical operational warning to the remittance sector. Compliance departments must maintain rigorous internal controls to ensure that corporate treasury, banking channel changes, and settlement rails are immediately reported to Customs. Failing to update regulatory registrations before processing transactions through new accounts directly undermines an operator’s “Fit and Proper” standing and invites supervisory penalties.