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Provisions by PBOC for the Administration of Reporting Large-amount Suspicious Payment Transactions in RMB - 2003


Article 1 In order to enhance the supervision and administration of RMB payment transactions and regulate the RMB payment transaction reporting system, and to prevent the criminal activities of money laundering by means of bank payment and settlement, these provisions have been promulgated pursuant to the Law of People's Bank of China and other relevant laws and regulations.

Article 2 RMB payment transactions as used in these provisions shall mean the transactions of currency payment and relevant funds settlement denominated in Renminbi (RMB) carried out by individuals or entities during the course of social and economic activities by the means of bills, bank cards, remittance, collection, on-line payment or cash payment.

Large-amount payment transactions shall mean RMB payment transactions in the amounts exceeding the prescribed limits.

Suspicious transactions shall mean the RMB payment transactions of which abnormal circumstances are found in the amounts, frequency, destinations, use and nature.

Article 3 The policy-oriented banks, commercial banks, urban and rural credit societies and associations, postal savings and remittance organizations (hereinafter referred to as "Financial Institutions") shall abide by these provisions in carrying out payment transactions.

Article 4 PBOC and its local branches shall be responsible for the supervision and administration of the reporting work of payment transactions.

Article 5 PBOC will establish a payment transaction surveillance system to oversee the payment transactions.

Article 6 The operational divisions of Financial Institutions shall set up anti money laundering positions, establish the responsibilities and rules of such positions and designate specific personnel to be in charge of the recording, analyzing and reporting of any large-amount and suspicious payment transactions.

Article 7 The following transactions shall qualify as large-amount payment transactions:

7.1 single bank account transfers by legal persons, other organizations and individual businesses (hereinafter referred to as "Entities") exceeding the amount of RMB 1,000,000

7.2 single cash gathering and payments exceeding the amount of RMB 200,000, by means of cash deposit, cash draw, cash remittance, cash draft, cash check release;

7.3 fund transfers exceeding the amount of RMB 200,000 between individual bank settlement accounts, or between individual bank settlement accounts and entity bank settlement accounts;

Article 8 The following transactions shall qualify as suspicious payment transactions:

8.1 disparate transfer-in and concentrated transfer-out, or concentrated transfer-in and disparate transfer-out of funds within a short period of time;

8.2 the frequency and amounts of fund transactions are significantly inconsistent with the business volume of the enterprise;

8.3 the origin and destination of fund flow is significantly inconsistent with the business scope of the enterprise;

8.4 the daily receiving and paying of funds is significantly inconsistent with the business characteristics;

8.5 the seasonality of the receiving and paying of large-amount of funds is significantly inconsistent with the nature and characteristics of the business;

8.6 frequent receiving and paying of funds between the same payers and payees within a short period of time;

8.7 suddenly activating an account that has been idle for a long time and such accounts pay and receive large-amount funds in a short period of time;

8.8 frequently receiving remittances from individuals that are obviously unrelated to the operations of the business;

8.9 the amounts, frequency and uses of cash deposited and drawn is significantly inconsistent with normal cash receiving and payment;

8.10 cash receiving and payment out of an individual bank account with an accumulative total exceeding RMB1,000,000 within a short period of time;

8.11 substantial increase of business transactions with those clients located in the regions where drug trafficking, smuggling and terrorism are serious, resulting in frequent funds payments and receiving funds within a short period of time;

8.12 frequently opened and closed accounts accompanied with large-amount payments prior to closing such accounts;

8.13 intentionally breaking the whole payment into parts in order to circumvent the large-amount payment surveillance;

8.14 other suspicious payments as set forth by PBOC;

8.15 other suspicious payments determined by financial institutions.

"Within a short period of time" as used in Article 8 shall mean within ten business days.

Article 9 When a depositor opens a bank settlement account, the financial institutions shall examine the authenticity, integrity and legitimacy of the relevant client profiles and materials.

Article 10 The financial institutions shall establish depositor information digital files to conserve the information concerning the depositors of bank settlement accounts. Such information shall include, for entity depositors, the name of the depositor, name of the legal representatives/persons in charge and the name and code of their identity cards, certificates for opening the accounts, organization code, location, registered capital, business scope, major fund transfer partners, average daily balance of the account and for individual bank settlement accounts, the name, identity card name and code, domicile of the depositors.

Article 11 In the event that any circumstance listed in Article 8 are found by the financial institutions related to any client in the payment transactions, such institutions shall record and analyze such suspicious transactions and fill out the Suspicious Payment Transaction Report Form attached hereto as Schedule 1.

Article 12 If any further investigation is required of any suspicious payment transaction, a report of such shall be submitted to the PBOC.

In the event that the PBOC inquires about any suspicious payments, the relevant financial institutions shall be responsible to investigate such payments and reply promptly with records of such transactions.

Article 13 the financial institutions shall keep and preserve the payment transaction records in accordance with the Rules of the Administration of Accounting Files of Banks.

Article 14 the financial institutions shall set up internal administration rules regarding the payment transaction reports and operation guidance and shall report such to the PBOC.
The financial institutions shall also be responsible for the implementation of such internal administration rules in their respective branches.

Article 15 Large-amount payments by inter-accounts transfers shall be reported by financial institutions by interlinking relevant systems and the payment transaction surveillance system.

Large-amount cash payments shall be reported by financial institutions through their transaction processing systems or in written form.

Suspicious payment transactions over the counter shall be examined by the financial institutions and be reported in writing or by some other form..

Article 16 the financial institutions shall report to the PBOC's headquarter any large-amount inter-account transactions the second day after the date of the transaction.

Large-amount cash payments shall be reported to local PBOCs, which will resubmit such reports to PBOC headquarter, the second day after the date of transaction.

Article 17 Should policy-oriented banks, solely state-owned banks, and the branches of commercial banks by stocks identify any suspicious payment transactions, such entities shall fill out Suspicious Payment Transaction Report Forms and submit such to their first class subsidiary banks, which will analyze such reports and re-submit such reports the second day after the date of receipt of reports to local PBOCs, to their business administration departments, major branches in provincial capitals and their superior entities.

Should city commercial banks, rural commercial banks, urban and rural credit societies, wholly foreign invested banks, joint venture banks with foreign investment and agencies of foreign banks, identify any suspicious payments, such entities shall fill out a Suspicious Payment Transaction Report and submit the same to local PBOCs, their business administration departments, major branches in provincial capitals and other regional-level city branches. . The local PBOCs in regional-level cities shall submit the reports the second day after the date of receipt to their provincial PBOC, business administration department and major PBOCs branches in provincial capitals.
Article 18 Should the business branches of financial institutions determine, after analyzing the relevant RMB payment transactions, that such transactions constitute obvious criminal offences, they shall immediately report such transactions to local Public Securities agencies and their superiors.

Article 19 Provincial subsidiaries, business administration department and major branches in provincial capitals of PBOC shall analyze the reported Forms and notify relevant institutions if further clarification is needed.

Article 20 Provincial subsidiaries, business administration department and major branches in provincial capitals of PBOC shall summarize the reported Forms on a weekly basis (see Schedule 2) and shall report to the PBOC headquarter on the first working day of each week. The major suspicious payment transactions shall be reported immediately to the PBOC headquarters.

Article 21 Neither PBOC nor other financial institutions shall disclose to any person or entity information related to suspicious transactions, unless required by law.

Article 22 In case financial institutions fail to review the required materials when opening accounts, PBOC may admonish the contravening party and charge a monetary penalty between RMB1000 and RMB5000, and in serious cases, to revoke the qualifications of the senior executive(s) directly responsible.

Article 23 In the following circumstances, PBOC will demand correction within certain time and charge a penalty; if no correction is made when the periods expire, an additional monetary penalty less than RMB30, 000 may be charged:

23.1 failure to review the account profile that results in fake settlement accounts established s;

23.2 failure to establish a database of depositors or have incomplete data;

23.3 failure to keep clients transaction records as required;

23.4 failure to examine and report payment transactions as required by the Rules;

23.5 failure to report suspicious transactions that are known or should have been known;

23.6 disclosure of information related to suspicious transaction in violation of Article 21 hereof.

Article 24 Should any personnel of financial institutions participate in forging of a account opening profile, or to open accounts for depositors to assist money laundering, such personnel shall be disciplined or, if they have committed a criminal offence, the matter shall be transferred to law enforcement agencies.

Article 25 In case of serious violation of these Rules by financial institutions, PBOC will withhold its approval of any new open basic deposit accounts, suspend or terminate all or part of their settlement business, and revoke the qualifications of the senior executives directly responsible for such violations.

Article 26 Any personnel of PBOC shall be charged with administrative discipline if Article 21 hereof is violated.

Article 27 the terms "exceeding" or "below" as used in these Rules shall include the base numbers.

Article 28 These Rules shall take effect since March 1 2003.

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