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Chinese Banking and Insurance Regulatory Commission Strengthen Oversight on Money Laundering and Terror Financing

2019-02-22 15:40 Friday


China faces the greater risk of money laundering and the financing of terrorist groups as the nation becomes more integrated into global markets. To combat money laundering and terror financing, Chinese Banking and Insurance Regulatory Commission issued new guidelines, which has taken effect since 29th January,2019.

  Chinese Banking and Insurance Regulatory Commission Strengthen Oversight on Money Laundering and Terror Financing

The guidelines stipulate that banks should update and optimize their systems to prevent tax evasion, improve compliance with international regulations, increase consumer protection and internet security, as well as crack down on money laundering and terrorist financing.

Over the past few years, some Chinese state-owned banks have been warned or even fined for violating money laundering regulations. In 2016, several senior executives at the Madrid branch of the Industrial and Commercial Bank of China (ICBC) were arrested for money laundering suspicions. In addition, the U.S. unit of ICBC had also been fined USD 6.16 million for having insufficient anti-money laundering measures. Bank of China in Milan is also under investigation for the suspected laundering of billions of dollars.

Facing increasing pressures, Chinese regulating departments started to crack down on violations of money laundering and terror financing regulations in 2017 with more inspections, fines and rules. New rules also increase the scrutiny on suspicious activities within the burgeoning internet financial sector.

The new regulations stipulate that banks' overseas branches should comply with local regulations, while also require that headquarters cannot relax their supervision of branches' activities。

"Risks of money laundering and terrorist financing are further increasing in line with cross-border uses of the yuan, the rise of internet financing and the opening of capital accounts. Regulators should continue to improve measures to monitor money laundering and terrorist financing." said Hao Jinghua, deputy director at the anti-money laundering bureau at the central bank.

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