Customs and Excise Department
Guidance Notes on theCompetence Assessment forMoney Service Operators

December 2022

1Guidance Notes on the Competence Assessment for Money Service Operators

Table of ContentsPage No.

1.

Introduction

3

2.

Statutory and Regulatory Requirements

33.

Licensing Requirement

44.

Eligible Person(s) for the Assessment

45.

Mode and Scope of the Assessment

5

6.

Suggested Reference

57.

Sample Question

6

8.

Validity of the Assessment’s result

6

9.

Documents and Papers for the Assessment

7

10. Important Notes to Candidates

7

11. Proper Ways of Filing in the Multiple-choice Answer Sheet

812. Notification of the Results

1013. Severe Weather Arrangements

1014. Other Matters1015. Enquiries

112

Guidance Notes on the Competence Assessmentfor Money Service Operators
1. Introduction
1.1

The implementation of Competence Assessment (Assessment) aims at ensuring thatthe senior management of a licensed Money Service Operator (MSO) has afundamental knowledge and clear understanding of anti-money laundering andcounter-financing of terrorism (AML/CFT) to duly oversee all aspects of theAML/CFT systems set out for operating the money service business with a view toeffectively mitigating the risks of money laundering and terrorist financing (ML/TF)
arising from the business and complying with the statutory and regulatory AML/CFTrequirements. The Assessment is conducive to uplifting the compliance level of theMSO sector and safeguarding the integrity of the AML/CFT regime under Anti-Money
Laundering and Counter-Terrorist Financing Ordinance, Chapter 615 (AMLO).

1.2

The purpose of this Guidance Notes is to provide candidates with more information
with respect to the Assessment, especially on the examination format as well as theAssessment criteria, so that candidates can better prepare for the Assessment.

2. Statutory and Regulatory Requirements
2.1

Under section 30 and 31 of the AMLO, the Commissioner of Customs and Excise(CCE) may grant/renew an MSO licence to an applicant/a licensee only if the CCE issatisfied that the sole proprietor/each partner/each director and the ultimate owner of
the applicant/licensee is a fit and proper (F&P) person to be associated with thebusiness of operating a money service. Besides, the sections detail the matters, inaddition to any other matter that the CCE considers relevant, the CCE must have regard
to in determining whether an applicant for an MSO licence/a licensee is a F&P person
in considering the grant/renewal of a licence to operate a money service.

2.2

To provide greater clarity to licence applicants as well as licensees on the criteria for
determining the fitness and propriety of a person, the CCE promulgated the Guideline
on Criteria for Determining Fitness and Propriety (F&P Guideline) and theSupplementary F&P Guideline in April 2018 and January 2020 respectively. TheGuidelines provide the matters and examples that the CCE considers relevant indetermining the F&P status of a person to be associated with the business of operatinga money service which include, among others, “Whether the person is equipped withthe skills, knowledge, experience and professionalism necessary to perform thebusiness’s functions efficiently and effectively. In making such an assessment, theperson is generally expected to be able to display an understanding of the statutory
and regulatory requirements that apply to the business. Examples are a person who
did not take or failed to pass the relevant test if any conducted by the Customs andExcise Department in the course of processing licence application.”33. Licensing Requirement
3.1

To tie in with the implementation of the Assessment, the application procedures for thegrant/renewal of an MSO licence stipulated in the Licensing Guide are revised
accordingly. The Licensing Guide is promulgated by the CCE to set out the licensing
requirements for an MSO licence under the AMLO and its updated version in March
2021 provides that at least one member of the senior management of a licenceapplicant/a licensee must pass the Assessment. The result of the Assessment will
constitute a substantial weighting in the evaluation of the overall F&P person status
and thus be one of the factors that the CCE will have regard to in considering the grantor renewal of an MSO licence. Failure of a licence applicant/ a licensee to attend or
pass the Assessment may result in refusal of the licence application.

4. Eligible Person(s) for the Assessment
4.1

An eligible person of an MSO for the Assessment means the person who:
(i)
(ii)
(iii)

4.2

must be the senior management of the licence applicant/licensee in overseeing
the operation of money service business;has a direct involvement in making decision on company policy and governancearrangement; andis held accountable in the compliance functions and systems of the company.

The senior management of an MSO is defined as follows:(i)where the MSO licence applicant/licensee is a natural person –(a) the sole proprietor; or(b) the partners in the partnership (not more than THREE partners can be
nominated to participate in the Assessment).

(ii)

where the MSO licence applicant/licensee is a legal person, i.e. corporation –(a) the sole director of a corporation; or(b) the individual directors, who must be natural persons, of a corporation (notmore than THREE directors can be nominated to participate in theAssessment).

4.3

Given that the Assessment is conducted on a company basis, the candidates of the same
company/corporation under an application/an MSO licence must attend the samesession of the Assessment in all circumstances.

4.4

Nomination for eligible person(s) to attend the Assessment would be made by a licenceapplicant / a licensee only for once and under the following circumstances:(i)(ii)(iii)

A new licence application is filed;
Within 90 days before the expiry of the licence and the licensee has no eligible
person who has passed the Assessment; andUpon notification by a licensee of the deletion of the only eligible person whohas passed the Assessment.

4

4.5

For granting an MSO licence, the eligible person(s) of the licence applicant shall attend
the Assessment within 30 days upon attending the interview with the officers of theCustoms and Excise Department (C&ED). In case that the eligible person(s) of theapplicant fail the Assessment, the applicant will be given another opportunity toarrange the eligible person(s) to re-take the Assessment after 30 days upon thenotification of result. The corresponding licence application could be refused by theCCE upon the circumstance that the CCE considers the licence applicant to be not fit
and proper to operate the money service business.

4.6

For renewing an MSO licence, the eligible person(s) of the licensee shall attend theAssessment within 30 days upon the issue of reminder letter, which would be deliveredto each licensee 90 days before the expiry of the licence. In case that the eligible
person(s) of the licensee fail the Assessment, the licensee will be given anotheropportunity to arrange the eligible person(s) to re-take the Assessment after 30 days
upon the notification of result and before the expiry of the licence. If all the eligible
person(s) of the licensee still fail the Assessment before the expiry of the licence, thecorresponding licence application for licence renewal could be refused upon thecircumstance that the CCE considers the licensee to be no longer fit and proper tooperate the money service business.

5. Mode and Scope of the Assessment
5.1

The Assessment comprises 35 multiple-choice questions in Chinese or English
languages, and there is only one correct answer for each question. Candidates are
required to complete the Assessment in 1 hour and 15 minutes.

5.2

The Assessment is composed of seven modules and each module consists of fivemultiple-choice questions. The seven modules are:
(1)
(2)
(3)
(4)
(5)
(6)
(7)

5.3

General knowledge on AML/CFT and Counter Proliferation Financing
Part 1-7 of the AMLO
Schedules to the AMLO
Guidelines promulgated by the C&ED
MSO's systems and controls (i) Institutional governance and strategy
MSO's systems and controls (ii) AML/CFT control areas
MSO's systems and controls (iii) Demonstrating and monitoring compliance

To obtain a “Pass” in the Assessment, the candidate must not make more than two
mistakes in each module AND attain a total score of 25 or above for the entire
Assessment paper.

6. Suggested Reference
6.1

All the multiple-choice questions of the Assessment are set mainly based on thefollowing publicly available materials:(1) Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615)
(2) Guideline on Anti-Money Laundering and Counter-Financing of Terrorism forMSOs promulgated by C&ED

5

(3) Licensing Guide issued by C&ED to MSOs
(4) Guidelines issued by C&ED to MSOs
(5) Circulars issued by C&ED to MSOs

7. Sample Question
7.1

The following is the sample question for the Assessment:

1. What are the three common stages of Money
Laundering?
1.
2.
3.
4.
5.

Layering
Identifying
IntegratingPlacementCollectiona)
b)
c)
d)
e)

1,2 and 3
2,3 and 4
1,3 and 4
1,2 and 5
3,4 and 5

Correct Answer: C
8. Validity of the Assessment’s result
8.1“A pass in the Assessment” is considered by the CCE to be a company-based
qualification which is also one of the F&P person statuses to be associated with thebusiness of operating a money service.

8.2

Please note that when the licensee no longer has at least one member of the senior
management, i.e. the sole proprietor, partner or director, who passed theAssessment, the validity of this company-based qualification will be void
automatically. Under such circumstance, except for the licensee belonging to sole
proprietorship, the licensee belonging to partnership and corporation will be given anopportunity to arrange any eligible person(s) of its senior management to take theAssessment within 30 days upon notification to the C&ED of change in partnership ordirectorship. In case that the eligible person(s) fail the Assessment, the licensee will
be given another opportunity to arrange the eligible person(s) to re-take the Assessment
after 30 days upon notification of result. For licensees that are due for renewal within
180 days, the Assessment arrangement will follow para. 4.6 relating to the renewal oflicence.

8.3

Having considered the merits of each case, the CCE may exercise discretion to allow
the licensee to continue its money service business when none of eligible person of thelicensee passed the Assessment. In granting the exemption, the CCE will impose
relevant licensing condition(s) that the CCE deemed appropriate and necessary for6ensuring the licensee to have the capability to operate the money service business witheffective AML/CFT systems.

9. Documents and Papers for the Assessment
9.1

Candidates should present the following documents and papers for inspection whenattending the Assessment:(1) Hong Kong Identity Card or an alternative identification document with photo, e.g.
valid travel documents;(2) Authorization letter, i.e. only for the partnership company and corporation; and(3) Assessment invitation letter.

9.2

Any candidate who is unable to present the above documents will not be allowed toattend the Assessment as scheduled.

9.3

If the identification documents presented by a candidate is damaged or defaced, thecandidate may not be allowed to attend the Assessment. Candidates are therefore
recommended to carefully inspect their identification documents before theAssessment.

10. Important Notes to Candidates
10.1 Candidates MUST follow the rules set out in this set of Guidance Notes and instructionsof the invigilators. Anyone who violates the rules or acts dishonestly in any way during
the Assessment, is LIABLE TO BE DISQUALIFIED. You may also be requested toleave the Assessment centre immediately.
10.2 Candidates MUST take the Assessment at the time and place specified in the invitation
letter. Any requests for change of Assessment date/time/centre will not be
considered. Once the Assessment has started, you will NOT be allowed to enter thepremises to take the Assessment.
Before the Assessment
10.3 Candidates should check your body temperature before departing for the Assessment
centre. If you have a fever and/or contagious diseases, you should NOT attend theAssessment. If you have respiratory symptoms, such as cough and runny nose, you
should put on surgical mask properly whenever you are within the Assessment centre
but will be required by the invigilators to remove your mask for verification of youridentity.
10.4 You MUST bring to the Assessment centre your personal identification document, e.g.
Hong Kong Identity Card, valid local/foreign Passport and etc., AND a printed copyof the invitation letter for identity verification. If you fail to produce your personal
identification document for identity verification, you will NOT be allowed to sit
for the Assessment. Please note that you may be required to undergo identity
verification at different stages of the Assessment. In case of any doubt on youridentity, the invigilator may make copy(ies) of your identification document at the7Assessment centre for further verification as and when required.
10.5 Stationery will be provided at the Assessment centre.
During the Assessment
10.6 Do not leave the Assessment centre without permission from the invigilator. Early
leavers must make sure the answer scripts and related materials have been collected by
the invigilator on the spot.
Candidates are strictly forbidden to take away anyquestion book or answer sheet, whether used or unused, out of the Assessment centre.
10.7 Only necessary and permitted stationery can be put on the desk. All other personal
belongings, such as books, dictionaries, notes, paper, notebooks and all kind ofelectronic devices (e.g. calculators, tablets, PDA, mobile phones, Bluetooth headsets,
pagers, MP3 players, electronic dictionaries, digital cameras/recorders, databankwatches, smart watches with mobile applications installed or wireless technologies
supported, etc.), MUST be put under your chair. Mobile phones must NOT becovered by anything and should be clearly seen by the invigilators. You must NOT put
any unauthorized articles (including mobile phones and other electronic devices) on/inyour desk, on your body or in your pockets during the Assessment. Mobile phones,
other electronic devices or articles that can emit sound MUST be switched off
throughout the examination. Please keep safe custody of your personal belongings, theC&ED or Assessment centre assumes no responsibility for any loss or damage.
10.8 You must NOT –(a)communicate or attempt to communicate improperly with any person inside oroutside the Assessment centre; or(b)disturb other candidates in whatever way; or(c)take photographs, audio-record or video-record inside the Assessment centre.

10.9 You must mark the answers on the multiple-choice answer sheet provided. Answers
not written on the multiple-choice answer sheet will NOT be marked. You must
NOT copy anything from the question book onto the invitation letter, and, or yourpersonal belongings or parts of your body.

11. Proper Ways of Filling in the Multiple-choice Answer Sheet
11.1 Failure to follow the instructions below may result in your answers being rejected withNO MARKS given to you.
11.2 Before going to the questions, you have to write down the following particulars on themultiple-choice answer sheet as instructed by the Presiding Invigilator:(a) Name of Company: Write down full name of your company in Chinese
and/or English and in block letters.

8

(b) Application Number: Write down your Application Number. Your
Application Number is shown in the invitation letter.

(c) Name of Candidate: Write down your full name in Chinese and/or English
and in block letters.

(d) Status of Candidate: Write down your position in the company.

(e) Date of Assessment: Write down the date you take the Assessment(f) Signature of Candidate: Sign your name11.3 An example of the instructions at paragraph (11.2) (a) to (f) is given below :11.4 Fill in the answer boxes in the same way as the example shown above.
answers thoroughly and do not fold the answer sheet.

Erase wrong

11.5 You will score NO marks for marking two or more answers to the same question.
11.6 When you fill in an answer, check to see that you are answering the right question.

9Any requests for amending the answers made beyond the Assessment time will NOT
be considered.

12. Notification of the Results
12.1 Candidates will only be notified of the results, i.e. PASS or FAIL, by E-MAIL only
within 14 days after the Assessment. Please keep this notification as a certification ofthe Assessment result in any future event.
12.2 Candidates who are not satisfied with their Assessment results may, within seven days
after the date of issuance of the result notification, write to the Licensing Control
Division at Units 402-403, 4/F, Centre Parc, 11 Sheung Yuet Road, Kowloon Bay,Kowloon or by e-mail: msoenquiry@customs.gov.hk for re-checking of theAssessment papers. Late submission will not be considered.
12.3 The C&ED will re-check the candidate’s answers of the answer sheet and the result
will be sent to the candidates concerned in writing within 14 days after receipt of the
re-checking request. The answer sheet will be re-checked for technical errors such asincorrect mark entries and data inconsistencies.
12.4 The result of the re-checking is final. The C&ED will not disclose the exact scores,
the Assessment questions and the corresponding correct answers in any case.
12.5 VERY IMPORTANT: A pass in the Assessment does not necessarily mean that you
are eligible for a licence. For granting a licence, applicants are also required to meetthe licensing requirements stipulated in the AMLO and the licensing guidepromulgated by the C&ED.

13. Severe Weather Arrangements
13.1 As a general rule, the Assessment will be held as scheduled when typhoon signal No. 3or lower, and/or rainstorm signal “Amber” or “Red” is issued by the Hong KongObservatory. If typhoon signal No. 8 or above, and / or rainstorm warning “Black” isstill hoisted at or after 8:00 a.m. on the scheduled date, the Assessment will besuspended. Alternative arrangements, if any, will be published on the website ofMoney Service Operators Licensing System on the first working day that follows.

14. Other Matters14.1 The invitation to the Assessment does not imply that a candidate has fully met thelicensing requirements as the vetting process is still in progress.
Applicants/Licensees who do not meet the licensing requirements will not be further
considered irrespective of their Assessment results.
14.2 Where changes to the Assessment arrangements are required by C&ED, candidates will
be informed by email before the Assessment as soon as practicable.
14.3 As regards the facilitating arrangements of Assessment available for persons with10

disabilities, candidates may contact the C&ED at 3742 7742 for enquiries. TheC&ED may require, as appropriate, the candidates to produce medical proof to confirm
their disabilities in order to make suitable arrangements.
14.4 You should not, without permission, enter the offices, classrooms or any area in theAssessment centre not open to candidates. C&ED and the Assessment centre should
not be held responsible for any injury suffered by candidates due to their unauthorized
entry into the aforesaid places.
14.5 In case of any dispute, the decision made by the C&ED shall be final and conclusive.

15. Enquiries
15.1 You
may
find
more
information
about
theAssessment
athttps://eservices.customs.gov.hk/MSOS/. You can also make enquiry to the departmentby the following ways:
By phone at 3742 7742 (during office hours from Monday to Friday except
Public Holidays);(ii) By post to the Money Service Supervision Bureau, Customs and Excise
Department at Units 402-403, 4/F, Centre Parc, 11 Sheung Yuet Road, Kowloon
Bay, Kowloon;(iii) By fax to 3742 7758; or(iv) By email to msoenquiry@customs.gov.hk(i)- End -11