China's latest AML guidelines to help authorities clamp down on large organised crime rings
Michael Thomas, director at Wolters Kluwer Financial Services, North Asia, feels that the country’s latest AML regulation will mean added costs for FIs, which may struggle to comply. June 12, 2013 | Michael ThomasWhen the new Chinese government was announced in late October 2012, the fight against fraud and corruption was a central plot of the new regime’s action plans. Following the change of guard in March 2013, the People’s Bank of China (PBoC) issued Yin Fa {2013} No. 2, Guidelines for Financial Institutions (FIs) on Their Risk Assessment on Money Laundering and Terrorist Financing and Classified Management of Clients. This marked the start of heightened supervision for different categories of financial crime, with several more legislations to further detail the compliance requirements expected in the coming few months, bringing China fully in line with international anti-money laundering (AML) and terrorist funding standards. China first recognised the significance of AML measures in 1997 when it mapped out a set of AML controls, although these were rudimentary and not supported through enforcement. The creation of the China Anti Money Laundering Monitoring Analysis Centre (CAMLMAC) in 2004 under the control of PBoC, followed by the criminalisation of money laundering activities in 2006 led to the full membership of the Financial Action Task Force (FATF) in 2007. A steady stream of regulations has since been launched, covering the different types of FIs and also non-financial institutions. However, these have all been prescriptive rules which, as soon as they are published become freely available to the very criminals and terrorists who soon find ways of bypassing rules that were put in place, often long before the FIs were even able to implement them in the first place. Consequently, the current set of AML regulations have enabled authorities to nab small-time criminals who are unaware of the regulations, but are generally ineffective against large organised crime rings. The latest guidelines issued focus on the need to risk w... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: China, Regulation, Risk and RegulationChina,riskregulation,Risk and Regulation, China,Regulation,Risk and Regulation, Keywords:Michael Thomas, Wolters Kluwer, PBoC, AML, CAMLMAC, FATF Michael Thomas, Wolters Kluwer, PBoC, AML, CAMLMAC, FATF
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