Financial Crime World

China Steps Up Anti-Money Laundering Efforts

Implementing Internal Anti-Money Laundering Systems

Chinese commercial banks have implemented an internal anti-money laundering (AML) system based on client information, transaction reports, and records to prevent and crack down on money laundering.

Combating Money Laundering

In 2003, the People’s Bank of China (PBC) reported over 2.6 million large-value or suspicious fund transactions worth USD 600 billion in foreign exchange transactions. The judiciary and law enforcement departments have been actively combating money laundering, with public security authorities striking illegal underground financing activities and closing 62 underground banks.

Strengthening International Cooperation

China has been strengthening international cooperation to enhance AML efforts, including:

  • Examining over 30 domestic banking accounts opened by foreign criminal organizations and individuals
  • Investigating cross-border money laundering offenses involving Chinese organizations and individuals

Challenges and Improvement Areas

Despite progress made, there are still gaps between China’s AML activities and international practices. The PBC has identified several areas that require improvement, including:

  • The need for a systematic AML law
  • Clarification of responsibilities among departments
  • Development of an AML monitoring and analysis system
  • Reinforcement of internal AML systems in financial institutions

Measures to Strengthen AML Work

To address these issues, the Chinese government has taken measures to strengthen and improve AML work, including:

  • Advancing AML legislation
  • Improving coordination mechanisms
  • Upgrading AML monitoring and analysis systems
  • Strengthening internal AML systems in financial institutions
  • Promoting AML training
  • Actively involving in international cooperation on AML

Looking Ahead

Experts are confident that China’s AML efforts will make significant progress with the implementation of these measures. However, there remain many tasks to be done and challenges to be overcome, including:

  • Addressing disparities in economic and finance development among different countries
  • Overcoming cultural and institutional differences

Future Development of AML Activities

To further develop its AML activities, China must take into account its specific circumstances and select a cooperation mechanism that suits its reality. The establishment of reporting systems should also depend on China’s unique situation, taking into consideration the characteristics of different industries and the specific requirements of international conventions.