Laundering legislation to spread net wider
By Jiang Zhuqing (China Daily)
Updated: 2005-09-30 06:01

Anti-money laundering efforts will be extended to cover insurance and securities sectors, as well other "vulnerable fields," such as real estate, sales of precious jewellery and the private sector, a leading official said yesterday in Beijing.

"Most acts of corruption (in China) are closely related to economic activities and accompanied by illegal money transfers," said Cai Yilian, deputy director of the Anti-money Laundering Bureau under the People's Bank of China (PBOC), at the fifth Anti-Corruption Conference for the Asia-Pacific Region yesterday in Beijing.

Valuable experience has already been accumulated by the bureau in countering money laundering through nationwide inspections in commercial banks, said Cai.

Reports said China's 17 major commercial banks have made 654,400 reports of suspicious transactions involving 248 billion yuan (US$31 billion) in local currency dealings and US$76.9 billion in foreign currency dealings since April, 2004, when the central bank set up its Anti-Money Laundering Monitoring and Analysis Centre.

More than 1,500 cases were handed over to police for investigation, reports said.

China also took action against 155 underground private banks and operations offering illegal foreign exchange transaction from April to December last year, putting an end to a total 12.5 billion yuan (US$1.5 billion) worth of illegal business, said the official.

To ensure the consolidation of anti-money laundering work, a draft of an anti-money laundering law will soon be submitted to the Standing Committee of the People's National Congress for reviewing, the official added.

The draft covers corruption and economic crimes, ensuring the Criminal Law is able to deal with the latest financial crimes, Cai said.

According to the existing Criminal Law, only four major crimes fall into the category of money laundering: drug trafficking, smuggling, terrorism and underworld activities. However, this definition is considered too limited to control today's numerous other money laundering crimes, experts said. In January 2003, the PBOC promulgated three anti-money laundering regulations relating to financial institutions.

The anti-money laundering campaign calls for international co-operation between all regions and countries, said Cai, adding that the PBOC is actively engaged in international co-operation.

In October 2004, China worked with Russia to establish "the Eurasian Group on Combating Money and Financing of Terrorism."

To pursue on-the-run corrupt officials who often escape abroad with large sums of laundered or illicit funds, China signed 44 agreements and treaties on judiciary support and assistance with 41 countries between September 1987 and December 2004, said Jia Qingguo, a professor with the Peking University.

China is conducting appraisal work with the aim of an early entry to the Financial Action Task Force on Money Laundering (FATF), to which China was accepted as an observer last January, said Cai.

(China Daily 09/30/2005 page2)