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New registration regime for Dealers in Precious Metals and Stones (DPMS) in Hong Kong.

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The Legislative Council of Hong Kong has approved the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO), establishing a registration regime for dealers in precious metals and stones (DPMS).

The AMLO has been amended to introduce a DPMS registration regime in accordance with Hong Kong’s obligations under the Financial Action Task Force (FATF) and will come into force on 1 April 2023.

This article summarises key amendments to the AMLO concerning DPMS.

Definition of “dealing in precious metals and stones”

According to section 53ZU of the Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Ordinance 2022, a person deals in precious metals and stones if the person carries on any of the following activities by way of business:

  1. Trading in, importing or exporting precious metals, precious stones or precious products
  2. Manufacturing, refining or carrying out any value-added work on precious metals, precious stones or precious products
  3. Issuing, redeeming or trading in precious-asset-backed instruments
  4. Acting as an intermediary in respect of any of the activities in paragraphs (1), (2) or (3)

Articles regulated under the DPMS registration regime

The articles covered by the DMPS registration regime include the following:

Precious metals:

  • Gold, silver, platinum, iridium, osmium, palladium, rhodium or ruthenium in a manufactured or unmanufactured state

Precious stones:

  • Diamond, sapphire, ruby, emerald, jade or pearl, whether natural or otherwise

Precious products:

  • Any jewellery or watch that is made up of, containing or having attached to it any precious metal or precious stone, or both

Precious-asset-backed instruments:

  • Any certificate or instrument backed by one or more precious metals, precious stones or precious products that entitled the holder to such assets (in entirety or in part); but does not include:
    • Any securities, a futures contract, any interest in a collective investment scheme, a structured product or an OTC derivative product as defined by the Securities and Futures Ordinance (Cap.571)
    • A virtual asset

Registration categories

Anyone wishing to conduct business in Hong Kong dealing in precious metals and stones and engage in transactions with a total value of HKD 120,000 or above is required to register with the Commissioner of Customs and Excise.

There are two categories of registration:

Category A

Category A registration is required for DPMS who intend to engage in non-cash transactions of HKD 120,000 or more. Applications must provide the following documents:

  • Valid business registration certificate
  • Business address of all premises in Hong Kong
  • Declaration that the registration is obtained for a lawful purpose

Other than the requirement to notify the Registrar of any subsequent changes in particulars, Category A registrants are not subject to AMLO’s AML/CTF requirements or other registration conditions. Category A registrations are valid as long as the registrant is in business and an annual fee payment is paid.

Category B

Any dealer who wishes to conduct cash transactions with a total value of HKD 120,000 or above is required to register as a Category B registrant. They will be subject to a fit-and-proper test similar to other designated non-financial businesses and professions (DNFBPs) under the AMLO as well as AML/CTF supervision. Category B registration is valid for three years, and once the registration has expired, the DPMS must ensure that the fit-and-proper requirements are met to be able to renew it.

Transitional arrangements

There is a nine-month transitional period starting from the day of the commencement of the amendment (1 April 2023) to apply for registration. Until the DPMS’s application is decided upon or withdrawn, the DPMS will be considered a Category B registrant for carrying on a precious metals and stones business.

Anyone who begins operating a precious metals and stones business after the regime’s commencement and intends to engage in specified transactions or specified cash transactions must register before engaging in any cash or non-cash transactions.

Display of registration certification

The certificate of registration and branch certificates (if any) must be displayed to the public at the registrant’s principal place of business and each branch (if any).

A registrant who conducts business in precious metals and stones online or through other electronic channels must provide on the website or other platforms specified by the Customs and Excise Department (C&ED) to verify their registrant status.

Notification of changes in particulars

Under section 53ZVA of the AMLO, in the case of any changes to the particulars provided by the registrant for registration or renewal, the registrant is required to notify the C&ED in writing within one month from the date of the change.

In accordance with section 53ZVB, the registrant is required to notify the C&ED in writing before the expected date of business cessation if the registrant intends to cease to:

  • Carry on precious metals and stones business
  • Carry out specified transactions (Category A registrants)
  • Carry out specified transactions and specified cash transactions (Category B registrants)

DPMS registration exemption

Non-Hong Kong precious metals and stones dealers are exempted from DPMS registration and are those who:

  • Does not ordinarily reside in Hong Kong, or a legal person, other than an individual, that is incorporated or established outside Hong Kong and is not registered under the Companies Ordinance as a non-Hong Kong company
  • Does not have a place of business in Hong Kong
  • The total number of days on which the person’s precious metals and stones business is carried on in Hong Kong does not exceed 60 days in a calendar year

Non-Hong Kong precious metals and stones dealers are required to provide the C&ED with a cash transaction report when engaging in cash transactions of HKD 120,000 or more within one day of completing the transaction before their departure from Hong Kong, whichever is earlier.

Final thoughts

The DPMS registration regime will be effective from 1 April 2023, and those who want to operate a precious metals and stones business will have a nine-month period to apply. It is important to ensure that businesses that are dealers of precious metals and stones understand this new regime and comply with the regulations under the AMLO. If you have any further questions regarding this regime, feel free to contact Acclime.


About Acclime.

We are a premier provider of professional formation, accounting, tax, HR & advisory services in Hong Kong, focusing on providing high-quality outsourcing and consulting services to our international clients in Hong Kong and throughout the region.

New registration regime for Dealers in Precious Metals and Stones (DPMS) in Hong Kong