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China’s Anti-Money Laundering Efforts Yield Fruitful Results
A collaborative mechanism has been established among provinces, autonomous regions, municipalities, cities with independent budgets, and relevant agencies to combat money laundering. The People’s Bank of China (PBC) has conducted special examinations on commercial banks since April 2004, revealing that most banks have established internal control systems for anti-money laundering.
Progress Made
- The PBC has taken punitive measures against 72 main reporting banks, imposing fines totaling up to RMB 1.7 million yuan due to incomplete internal control systems or misreporting of suspicious transactions.
- The examinations played an active role in understanding the implementation of anti-money laundering regulations by commercial banks and enhancing their emphasis on the issue.
Development of Data Search and Verification Platform
The PBC has made significant progress in developing a data search and verification platform for public security, customs, taxation agencies, industrial and commercial administrations to improve the effective use of suspicious transaction information. The bank is willing to sign memoranda of understanding with relevant law enforcement agencies from other countries and regions to challenge new trends in increasingly more international and cross-border crimes.
Meeting FATF Requirements
China has developed rapidly anti-money laundering and combating terrorist financing, meeting the requirements of the Financial Action Task Force (FATF) 40 plus 9 recommendations. However, anti-money laundering and combating terrorist financing still faces serious challenges from changing society, rapid national economic development, advancements in science and technology, frequent international capital movements and continuous financial business innovations.
Future Plans
Legislative Reforms
- To continue improving anti-money laundering legislation by stipulating the Anti-Money Laundering Law, initiating revision procedures to the Criminal Law, speeding up legislation of the Anti-Terrorism Law, amending Provisional Rules for Cash Management, rules for financial institutions anti-money laundering and stipulating anti-money laundering rules for securities and insurance industries.
Departmental Collaboration Mechanism
- To improve departmental collaboration mechanism
- Strengthen anti-money laundering and terrorist financing research, publicity and training to improve participation by the whole society and different departments
China Anti-Money Laundering Monitoring and Analysis Center
- To strengthen the development of the China Anti-Money Laundering Monitoring and Analysis Center to detect, distinguish suspicious criminal information in time and cracking down seriously and strictly money laundering and terrorist financing activities, particularly underground banking criminal activities.
Examinations and Cooperation
- To continue conducting anti-money laundering examinations and expand examination scope to securities and insurance companies to encourage the “first protection line” function of financial institutions in anti-money laundering and terrorist financing.
- China is also striving to join the FATF as a full member and strengthen cooperation with other countries and regions within bilateral or multilateral frameworks based on equal and mutual beneficial principles in information exchange, training, investigation assistance, property seizure and criminal suspects extradition and repatriation.