Financial Crime World

China’s War on Financial Crime: Progress in Money Laundering Prevention Measures

Amidst the global fight against financial crime, China has been actively implementing measures to prevent money laundering and terrorism financing. The country’s efforts are centered around the “one law and five decrees” regime, which has been gradually adopted since 2003 to build a national anti-money laundering (AML) and anti-terrorism financing (ATF) legal system in accordance with international standards.

  • China’s AML/ATF legal system consists of various laws such as the Criminal Law, Anti-money Laundering Law, and administrative measures for financial institutions and customer identification.
  • These regulations aim to cover various sectors, including banking, securities, futures, and insurance.

II. Coverage of the Financial Sector

  • The People’s Bank of China plays a crucial role in overseeing financial institutions’ compliance with AML/ATF obligations.
  • This includes on-site inspections, requirements for large-value and suspicious transactions reporting, and the freezing of assets suspected of terrorist activities.

III. National Coordination Mechanism

  • In 2004, China set up an inter-ministerial joint conference mechanism to improve the AML/ATF coordination process between various departments.
  • This includes the release of rules for anti-money laundering inter-ministerial joint conferences and regular briefings on AML/ATF developments.

IV. International Cooperation

  • China’s commitment to international AML/ATF cooperation includes its membership in the Financial Action Task Force (FATF) since 2007.
  • China successfully hosted the sixteenth annual meeting of the Asia/Pacific Group on Money Laundering in 2014.
  • China has signed anti-money laundering memorandums of understanding with entities such as the Central Bank of Argentina and cooperates with various foreign financial intelligence organizations.

Conclusion

China’s progress in preventing money laundering and terrorism financing reflects its commitment to the global fight against financial crime. The implementation of a robust regulatory framework and international cooperation demonstrates the country’s proactive approach to ensuring the integrity of its financial system.