Anti-Money Laundering Law (17/04/2007)
1. What does the anti-money laundering law consists of?
The Law of Anti-Money Laundering (the "Law") consists of seven chapters including 37 articles in total. It contains provisions on the supervision and administration of anti-money laundering, the anti-money laundering obligations of financial institutions, anti-money laundering investigations, international anti-money laundering cooperation, and international legal responsibilities. The Law provides that the administrative department of the State Council responsible for anti-money laundering is responsible for the supervision and administration of anti-money laundering. The Law also provides that a financial institution established within the territory of the People's Republic of China, or certain non-financial institutions, which are required to perform anti-money laundering obligations, must adopt relevant measures for the prevention and supervision of anti-money laundering.
2. What is a client identification system?
These measures include establishment and improvement on a client identification system, a system of preservation of clients' identity materials and transactional records, and a system of reporting large sum transactions and doubtful transactions.
3. Who is responsible for anti-money laundering?
The Law expressly provides that where the administrative department responsible for anti-money laundering or its subordinates at the provincial level finds any doubtful transaction and if an investigation and verification are therefore required, they may conduct an investigation into the related financial institutions, and the latter shall be obliged to provide assistance, documents, and materials with respect to such doubtful transactions.
4. What are some of the other issues raised by the anti-money laundering law?
The Law provides that the People's Republic of China shall, according to the international treaties to which China is a party and to the principles of equality and reciprocity, cooperate with international anti-money laundering efforts.
The Law contains provisions on specific legal consequences arising from violations of the Law by the staff engaged in anti-money laundering of the administrative departments of anti-money laundering, other administrative departments or institutions responsible for supervision and administration of anti-money laundering, and by financial institutions.