C&ED Enforces FATF Countermeasures
An October/November 2025 Customs circular requires MSOs to apply heightened countermeasures against FATF-listed high-risk jurisdictions.
Following the Financial Action Task Force (FATF) plenary outcomes in late October 2025, the Hong Kong Customs and Excise Department (C&ED) released circular MSSB/FATF_03/2025 to all licensed Money Service Operators (MSOs) on November 18, 2025. The circular mandated strict compliance with international countermeasures against jurisdictions classified as High-Risk Jurisdictions subject to a Call for Action.
The notice explicitly reiterated the FATF’s concerns regarding illicit finance threats emanating from the DPRK and Iran, instructing licensees to apply enhanced countermeasures. For MSOs, these obligations include terminating correspondent relationships with high-risk financial institutions, limiting cross-border business relationships, and systematically scrutinizing opaque corporate structures, shell entities, and joint ventures frequently utilized to bypass sanctions.
Additionally, the circular drew attention to jurisdictions subject to Enhanced Due Diligence (EDD), such as Myanmar, warning that failure to achieve remediation benchmarks could trigger full international countermeasures.
The C&ED reminded MSOs that processing cross-border payments through higher-risk corridors without documented, enhanced due diligence constitutes a material AML breach. Compliance teams are required to update their automated transaction screening rules immediately upon the issuance of each FATF plenary update, ensuring that any transactions linked to listed jurisdictions are subjected to senior management pre-approval and immediate suspicious activity analysis.