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Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) Framework in China

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Overview of the Report

The report appears to be from the International Monetary Fund (IMF) regarding the AML/CFT framework in China. The report assesses various aspects of China’s AML/CFT system, including the Financial Intelligence Unit (FIU), law enforcement agencies (LEAs), and the criminal justice system.

Key Findings

Here are the main points covered in the report:

Decentralized FIU

  • China’s FIU is decentralized, with three components: CAMLMAC and AMLB at the central level, and AML units within each of the 36 provincial branches.
  • However, this decentralization limits the FIU’s ability to analyze and share financial intelligence effectively.

Suspicious Transaction Reporting (STR)

  • STR requirements only extend to Financial Institutions (FIs) and are not implemented sufficiently.

Law Enforcement Agencies (LEAs)

  • LEAs access and use financial intelligence, but their focus is on supporting investigations and prosecutions of domestic predicate offenses rather than standalone Money Laundering (ML) and Terrorist Financing (TF) investigations.

Criminal Justice System

  • China has three discrete ML offenses, including accomplice liability, self-laundering, and receiving stolen property.
  • However, the lack of clear convictions under specific articles challenges the assessment of effectiveness.

Asset Forfeiture

  • China has the ability to confiscate property in the absence of conviction in certain circumstances, such as when the criminal has absconded or died.

Terrorist Financing and Financing Proliferation (TF and PF)

  • The report highlights three fundamental deficiencies in China’s TF and PF framework:
    • Scope coverage
    • Types of assets and funds that can be frozen
    • Implementation delays for non-domestic designations