“Rule‐based but risk‐oriented” approach for combating money laundering in Chinese financial sectors

Abstract

Purpose

This paper attempts to examine the practical condition of implementing risk‐based approach (RBA) in Chinese financial sectors.

Design/methodology/approach

This paper compares the differences between rule‐based approach and risk‐based approach (RBA), and provides different options to financial institutions considering their own circumstances.

Findings

This paper finds that capacity constraint is an issue for directly transplanting the RBA performed by developed countries to Chinese financial institutions.

Originality/value

This paper creatively proposes a rule‐based but risk‐oriented AML approach or partial RBA that fits Chinese financial institutions' reality underpinned by Chinese culture, and correspondingly, different assessment methods are presented as well.

Citation

Ai, L. (2012), "“Rule‐based but risk‐oriented” approach for combating money laundering in Chinese financial sectors", Journal of Money Laundering Control, Vol. 15 No. 2, pp. 198-209. https://doi.org/10.1108/13685201211218225