Carrying out a risk‐based approach to AML in China: partial or full implementation?

Abstract

Purpose

The purpose of this paper is to explain the rule‐based and risk‐based anti‐money‐laundering (AML) approach, to demonstrate the implementation problems in carrying out a risk‐based approach (RBA) to AML and finally propose in what way the RBA should be conducted in China.

Design/methodology/approach

This paper analyzes the practice of money‐laundering risk management in Chinese AML programs, compares the rule‐based AML approach and the risk‐based AML approach, and discusses the practical condition of carrying out the risk‐based AML approach in China.

Findings

Although China has made significant progress on combating money laundering, the practice of money‐laundering risk management in Chinese AML programs is still weak, and the pre‐conditions for fully implementing the RBA in China are yet to be met.

Originality/value

This paper highlights the practical issues preventing Chinese authorities from fully implementing a risk‐based AML approach, and proposes a “rule‐based but risk‐oriented” AML approach (a partial RBA) in the context of Chinese realities.

Citation

Ai, L., Broome, J. and Yan, H. (2010), "Carrying out a risk‐based approach to AML in China: partial or full implementation?", Journal of Money Laundering Control, Vol. 13 No. 4, pp. 394-404. https://doi.org/10.1108/13685201011083894