Financial Crime World

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China’s Efforts to Combat Money Laundering: A Growing Regime

China has made significant progress in establishing a robust anti-money laundering (AML) regime, with a focus on risk-based approaches and international cooperation.

China’s AML and anti-terrorism financing (ATF) legal system is comprised of laws, regulations, and normative documents. These include:

  • Criminal Law
  • Anti-Money Laundering Law
  • Decisions of the National People’s Congress on Strengthening Anti-Terrorism Work

Comprehensive Supervision

The People’s Bank of China is responsible for supervising and reviewing financial institutions’ performance in fulfilling their AML obligations. The bank has:

  • Carried out on-site inspections
  • Requested organizations to effectively fulfill their responsibilities
  • Engaged in special surveys and studies of business models and money laundering risks

National Coordination Mechanism

China has established a national anti-money laundering coordinating mechanism, which includes:

  • Inter-ministerial joint conference mechanism
  • Sectoral regulation coordination task forces

The mechanism has been convened seven times, with discussions covering responsibilities, regulation, administration, international cooperation, and strategic planning.

International Cooperation

China has made significant progress in international AML cooperation, including its membership in the Financial Action Task Force (FATF) since 2007. China has also:

  • Engaged in bilateral cooperation with countries such as Argentina
  • Developed sound cooperation with overseas financial intelligence organizations

Risk-Based Approach

Chinese authorities are adopting a risk-based approach to anti-money laundering, focusing on high-risk areas and releasing risk alerts to financial institutions to guide them in their AML work. This approach is aimed at improving the legal regulatory system and risk control mechanism in this field.

China’s efforts to combat money laundering demonstrate its commitment to international standards and cooperation, highlighting its growing importance as a key player in global anti-money laundering initiatives.