China Launches Nationwide Crackdown on Illegal Activities

Beijing - In a major effort to combat illegal activities, China’s central bank, the People’s Bank of China (PBC), has joined forces with relevant authorities to launch a nationwide operation aimed at tackling money laundering and related criminal offenses.

Targeting Underground Banks and Offshore Companies

The special operation, which was launched in 2015, targeted “underground banks” and offshore companies used for money laundering and other illegal activities. The effort resulted in the uncovering of 380 serious cases, highlighting the significant impact of the campaign on combating financial crimes.

Strengthening Efforts with Research and Cooperation

To further strengthen its efforts, the PBC has been actively researching various types of money laundering crimes, summarizing case characteristics and red flags to improve its ability to detect and prevent such activities. The bank has also released risk notifications for account opening and enhanced customer identification and transaction monitoring models.

The PBC has also strengthened its cooperation with law enforcement agencies, achieving significant results in cases involving telecommunication fraud and money laundering. In one notable case, the bank’s fund analysis helped uncover more than 20 cross-border telecom fraud gangs.

International Cooperation

Joining Forces to Combat Financial Crimes

China has made significant strides in international cooperation on anti-money laundering (AML) efforts, participating in various regional and global initiatives to combat financial crimes. The country is a member of the:

Financial Action Task Force (FATF)
Eurasian Group on Combating Money Laundering and Financing of Terrorism (EAG)
Asia/Pacific Group on Money Laundering (APG)

China has also established formal AML/CFT information exchange relationships with financial intelligence units in 38 countries and regions, and has increased its international investigation applications each year. In 2015, the country received 565 items of overseas intelligence and sent 353 abroad.

Continuous Improvement

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Despite these achievements, China’s AML work faces increasing challenges from evolving international political and economic environments, as well as rapid development in the domestic financial sector. To address these difficulties, the PBC’s AML departments will continue to improve and complete the AML system.

The bank has identified three key areas for improvement:

Countering Terrorist Financing (CFT)

Enhance cooperation with counter-terrorist departments to monitor and freeze terrorist-related funds
Track financial activities of terrorist groups and terrorists
Cut off TF sources to safeguard national security

Responding to the Growth of Internet Finance

Accelerate the development of the AML system in key sectors
Gradually bring internet financial institutions into the AML supervision system to ensure the long-term healthy development of the industry

Continue to strengthen efforts to combat illegal activities such as:
- Telecommunication fraud
- Illegal fund-raising
- Illegal pyramid schemes

The Chinese government’s commitment to combating financial crimes demonstrates its determination to protect the integrity of its financial system and ensure the security of its citizens.