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China’s Anti-Money Laundering Department Receives International Cooperation Boost

Beijing - The administrative department in charge of anti-money laundering under the State Council has been authorized to represent China in international cooperation efforts to combat money laundering, according to a new law.

New Responsibilities Under the Law on Preventing and Controlling Money Laundering

The Law on Preventing and Controlling Money Laundering, which came into effect on January 1, 2007, requires the department to work with foreign governments and relevant international organizations to exchange information and data related to anti-money laundering efforts.

  • Providing judicial assistance in investigations of money laundering crimes
    • Handling requests from foreign authorities for cooperation in criminal investigations

In addition to its new international role, the department is also responsible for overseeing China’s financial institutions and ensuring they comply with anti-money laundering regulations. The law sets out strict penalties for financial institutions that fail to establish internal control systems or conduct employee training on anti-money laundering measures.

Penalties for Non-Compliance

Financial institutions that violate anti-money laundering rules can face:

  • Fines of up to 500,000 yuan (approximately $67,000 USD)
  • Revocation of business licenses

Individuals found guilty of money laundering can face criminal charges under Article 33 of the law.

Requirements for Financial Institutions

The law sets out specific requirements for financial institutions to:

  • Identify clients
  • Preserve records of transactions
  • Report suspicious transactions

Failure to comply with these regulations can result in administrative sanctions or fines.

Impact on China’s Financial Sector

China’s anti-money laundering efforts are seen as a key step in reducing the country’s role in global money laundering schemes and improving its reputation as a major economic player. The law is expected to have a significant impact on China’s financial sector and help to prevent the use of Chinese banks and other financial institutions for illegal activities.

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