Dealers in Precious Metals and Stones Registration Regime - An Overview of Registration Procedures and Obligations of Registrants (Part 1)

The Dealers in Precious Metals and Stones Registration Regime has been implemented since 1 April 2023. Dealers in precious metals and stones who have been operating before the implementation of the regime are required to apply for registration with the Hong Kong Customs and Excise Department (C&ED) within this year to conduct transactions with total value at or above HKD 120,000, and must fulfill their anti-money laundering and counter-terrorist financing (AML/CTF) statutory obligations as appropriate.

The number of registered dealers has already exceeded 2,800 and the number of applicants keeps surging. However, some dealers have not yet submitted their applications as they are still studying the requirements and application procedures of Category A and Category B registrations. In light of this, this article summarizes the registration procedures, required documents for application, and the obligations of registrants, so as to facilitate dealers in precious metals and stones to apply for registration and better understand their responsibilities.

1. Differences Between the two Categories of Registrants

There are two categories of registration under the Dealers in Precious Metals and Stones Registration Regime:

a.  Any dealer who intends to engage in non-cash transaction(s) with total value at or above HKD 120,000 (specified transactions) in the course of business is required to register as a Category A registrant.

b.  Any dealer who intends to engage in cash transaction(s) with total value at or above HKD 120,000 (specified cash transactions) and non-cash transaction(s) with total value at or above HKD 120,000 (specified transactions) in the course of business is required to register as a Category B registrant. A Category B registrant is subject to AML/CTF supervision.

For dealers who only carry out cash or non-cash transaction(s) with total value below HKD120,000, no registration is required.

2. Both Categories of Registrants Must Furnish Information of All Business Premises and Display the Certificate of Registration

When submitting a registration application, the dealer must provide information of all premises at which the dealer carries on a precious metals and stones business.

Upon successful registration, registrants must display the certificate of registration in a conspicuous place at the registrant’s principal place of business, and display the branch certificate(s) in a conspicuous place at each branch which is used for carrying out face-to-face transactions with customers. If the registrant also carries on the precious metals and stones business on a website or any online platform, the registrant shall also display registration information at the relevant website or online platform.

3. Documents Required for Category A Registration Application

The application for Category A registration is relatively straightforward. Dealers are simply required to complete the application form, provide relevant documents, and submit a declaration stating that the precious metals and stones business has been carried on and will be carried on for a lawful purpose.

4. Documents and Procedures Required for Category B Registration Application

After submitting all required documents, the applicant will be notified by the Customs to nominate a senior management staff, such as the sole proprietor, partner, or director, to attend an interview. During the interview, Customs officers will verify the original documents and the payment record. The nominated individual must sign the application form for Category B registration in the presence of the Customs officers and must clarify and elaborate any information of the submitted documents in relation to the application. To ensure that the applicant can fully understand and fulfill the obligations of a Category B registrant, Customs officers will brief the applicant on the registration and compliance requirements applicable to Category B registrants.

The person attending the interview must be:

a)  the sole proprietor, where the applicant belongs to sole proprietorship;

b)  the partner(s) of the applicant authorized in writing by every partner, where the applicant belongs to partnership; or

c)  the sole director or a director(s) or senior staff member(s) of the applicant authorized in writing by the board of directors, where the applicant belongs to corporation.

To Part 2

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