China publishes draft AML/CFT legislation to meet international standards

China’s central bank has published revised draft legislation in its efforts to bring its anti-money laundering and counter financing of terrorism (AML/CFT) regulations up to international standards.

As well as financial institutions, the proposed legislation would cover the activities of precious metal dealers, property developers and accounting firms. The draft also contemplates nonbank payment companies and online micro lenders conforming to the new regulations.

Foreign financial institutions would be required to cooperate with money laundering investigations or risk being blacklisted according to the draft posted on the People Bank of China’s (PBOC’s) website.

Hefty fines

The legislation contemplates heftier penalties for failing to conduct due diligence on clients report large or suspicious transactions. Offenders would face fines of up to 2 million yuan (US$309,000) up from the current 500,000 yuan.

Institutions face fines of up to 10 million yuan if they are found to have helped conceal criminal gains or terrorist financing, up from 5 million yuan previously.

FATF alignment

The draft measures represent the efforts of Chinese regulator in response to the requirements and comments raised by the Financial Action Task Force (FATF) during its review and assessment of China’s overall AML/CFT work in 2019.

China has already made progress. Last year the FATF re-rated the country on aspects of regulation and supervision of financial institutions as well as its recommendations on guidance and feedback from partially compliant to largely compliant.


Categories: Trade Based Financial crimes News

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