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China's new rules on anti‐money laundering

TieCheng Yang (Counsel at Clifford Chance LLP, Beijing, People's Republic of China.)
Nan Zhang (Associate at Clifford Chance LLP, Beijing, People's Republic of China.)

Journal of Investment Compliance

ISSN: 1528-5812

Article publication date: 19 June 2007

Abstract

Purpose

The aim of this paper is to outline some key features of China's new rules on anti‐money laundering.

Design/methodology/approach

This paper describes the expanded definition of “anti‐money laundering”; the application of the rules to a broader group of financial institutions; the three required anti‐money laundering systems (client identity recognition, retention of client identity documents and trading records, and reporting of large‐sum transactions and suspicious transactions); the expected manner of anti‐money laundering investigations by the People's Bank of China; liabilities for breach; and anti‐money laundering regulations in the insurance and securities sectors.

Findings

The paper finds that new anti‐money laundering rules expand the definition of “anti‐money laundering” broaden the scope of institutions to which anti‐money laundering regulations apply, and establish more stringent requirements for the three key internal anti‐money laundering systems that financial institutions and certain non‐financial institutions must have: client identity recognition, retention of client identity documents and trading records, and reporting of large‐sum transactions and suspicious transactions. Compared to the old rules, the new anti‐money laundering rules impose more serious punishment on violations.

Originality/value

The paper provides a detailed and readable reference on the new Chinese anti‐money laundering regulations for those working in the China market and those who wish to compare these Chinese regulations with similar ones in other countries.

Keywords

Citation

Yang, T. and Zhang, N. (2007), "China's new rules on anti‐money laundering", Journal of Investment Compliance, Vol. 8 No. 2, pp. 58-62. https://doi.org/10.1108/15285810710759506

Publisher

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Emerald Group Publishing Limited

Copyright © 2007, Emerald Group Publishing Limited