The Peoples’ Bank of China (PBOC) has warned that it will use the full force of China’s anti-money laundering (AML) and counter terrorist financing (CFT) legislation to stem illicit financial flows out of the country.
This is one of several measures the central bank is taking as China grapples with widespread capital flight precipitated by its industrial slump.
Capital outflows from China have surged to $190bn over the last two months, forcing the authorities to intervene on an unprecedented scale to defend the Chinese currency.
The PBOC warned in July that it would deploy what it described as ‘the coercive might’ of the Communist regime to stop anybody smuggling money abroad under false pretexts, and with bank would invoke AML and CFT laws to do so.
Violators will be ‘severely punished’ according to a PBOC statement.
But capital flight for the first three weeks of August was already close to $100bn, despite reports that AML and CFT legislation had already been deployed to curb illicit financial flows.
China analysts say the PBOC has intervened very aggressively to stabilise the currency and prevent the devaluation of the Chinese currency getting out of hand.
Categories: Trade Based Financial crimes News