China’s financial authorities look set to issue stricter compliance procedures for establishing the beneficial ownership of all account holders after opening a public consultation process on draft customer due diligence regulations for financial institutions.
The draft regulations contemplate requiring financial institutions to identify and verify the identities of all ultimate beneficial owners of accounts held by new and existing customers.
Alignment with international standards
The People’s Bank of China, China Banking and Insurance Regulatory Commission, and China Securities Regulatory Commission have published draft regulations as part of China’s efforts to align its anti-money laundering and combatting the financing of terrorism (AML/CFT) regulations with international standards.
New AML/CFT regulations also aim to prevent and minimise financial risks and improve standards of AML/CFT compliance processes executed by financial institutions.
Risk-based approach
The draft regulations contemplate the identification and verification of all customers whereas current regulations only require financial institutions to verify account holders identities before processing transactions for them.
The proposed new regulations also emphasise a more risk-based approach to customer due diligence for financial institutions.
Soliciting opinions
The financial authorities are now soliciting opinions from the public on the draft regulations.
Opinions can be submitted either online or by mail by the deadline of 29 April 2021.
The authorities call for opinions from the public on the draft regulations and a link to download the draft regulations, Customer due diligence of financial institutions and management measures for the preservation of customer identity information and transaction records (Revised Draft for Solicitation of Comments), can be found here (in Chinese).
Categories: Trade Based Financial crimes News
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