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China’s dirty laundry – international organizations posing a risk to China’s AML systems

Mohammed Ahmad Naheem (Mayfair Compliance, London, UK)

Journal of Money Laundering Control

ISSN: 1368-5201

Article publication date: 8 May 2018




This paper aims to review some of the current challenges that international money laundering schemes are posing in the Chinese banking sector. Anti-money laundering (AML) systems in China are relatively new, and customer due diligence checks and other AML systems are underdeveloped in some areas.


The paper considers a particular case example of a multi-company organization that has known links to China. This company has been the target of both European and US investigations for suspected embezzlement and money laundering, and yet is still in operation.


The paper considers the complexities of this organization and how a seemly innocent link to a used clothing charity can fund an international organization spanning several countries. The paper offers a list of basic indicators of risk that could be applied to a risk-based system used within the Chinese banking context by using this group as an example.


The paper uses empirical and academic studies from other authors working in this region and supports many of the findings of the need to develop stronger risk-based, as opposed to rules-based, systems for managing AML risk assessment. Previous work by the author and suggestions from other authors are both used to suggest a basic framework for AML risk assessment. The paper concludes by reiterating the fact that China, like all other countries, is now operating in an international banking context, in much the same way that international organized crime is also operating at a global level.




Please note that this paper was composed and submitted for review to this journal in July 2015 – a time at which the author was working on his second doctorate-level research project titled “Trade Based Money Laundering: Exploring the Empirical Implications for International Banks”. This current paper contributes toward a series of papers that explore the links between charities, international money laundering and the formal financial services/banking sectors. All the content within this paper was current at the time of submission (July 2015). The banking and regulation industries have evolved since then, with new material from academic research also emerging. These points need to be taken into consideration when reading this paper.

The author is a specialist researcher and practitioner in the fields of trade-based money laundering and cryptocurrency regulation and is contracted exclusively to Mayfair Compliance ( The author acknowledges being the recipient of a research grant awarded by Princess Ālae as part of Seven Foundation’s “2020 Banking Vision – building banks of the future” and thanks her for the continued support and motivation both to himself and other students who benefit through her generosity ( The author also thanks Professor Muhammad Jum’ah (a leading economist of this era based in Damascus), who has continued to provide valuable input through his teaching of the science of economics and for his continued guidance.


Naheem, M.A. (2018), "China’s dirty laundry – international organizations posing a risk to China’s AML systems", Journal of Money Laundering Control, Vol. 21 No. 2, pp. 189-202.



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