2008-2012反洗钱战略-EN.docx

China 2008-2012 Anti-Money Laundering StrategyPromulgation date:12-30-2009Department:Peoples Bank of ChinaEffective date:12-30-2009Subject:Banking&FinanceChina 2008-2012 Anti-Money Laundering Strategy(Inter-Ministerial Anti-Money Laundering Joint Conference*; Issued on December 30, 2009) Abstract China has established a fairly sound system of anti-money laundering legislation, regulation and organization. At present, as the various anti-money laundering tasks are developing in both depth and breadth, the Peoples Bank of China, jointly with the members of the Inter-Ministerial Anti-Money Laundering Conference, has formulated and issued the China 2008-2012 Anti-Money Laundering Strategy (hereinafter referred to as the “Strategy) to centrally plan, direct and promote the anti-money laundering work nationwide and jointly prevent and combat the crime of money laundering.The Strategy has a planning period commencing in 2008 and ending in 2012, and does not cover the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan Province. Table of Contents I. Overview of Anti-Money Laundering Development (I) Current situation of anti-money laundering development (II) Opportunities and challenges II. Guiding Ideology and Overall Objective (I) Guiding ideology (II) Overall objective (III) Implementing principle (IV) Implementing steps III. Specific Goals and Key Actions(I) Improving criminal legislation against money laundering (II) Building a national anti-terrorist financing network (III) Enhancing the effectiveness of anti-money laundering regulation (IV) Establishing anti-money laundering regimes for certain industries other than the financial industry (V) Strengthening inter-departmental exchange and collaboration at home (VI) Building a team of highly qualified anti-money laundering experts (VII) Participating actively in international cooperation and standard setting(VIII) Strenuously recovering overseas criminal gainsI. Overview of Anti-Money Laundering Development (I) Current situation of anti-money laundering development From 2003 to 2008, Chinas anti-money laundering efforts had witnessed rapid development and significant progress in terms of criminal legislation, preventive measures, institutional arrangements and international cooperation, based on this countrys national situation and reference to the relevant international standards. As a result, a basic framework of anti-money laundering legislation, regulation and organization of China has been established, as well as fairly complete anti-money laundering regimes.In terms of criminal legislation, the Standing Committee of the National Peoples Congress amended the Criminal Law twice in 2001 and 2006, and the current core clauses, including Article 191 “Crime of Money Laundering, Article 312 “Crime of Disguising or Concealing Income from Crime or Proceeds from Income of Crime” and Article 349 “Crime of Sheltering, Transferring or Concealing Drugs or Booty Drugs, cover all main acts of money laundering.In terms of preventive measures, the Standing Committee of the National Peoples Congress adopted after deliberation the Anti-Money Laundering Law of the Peoples Republic of China in October 2006, which signaled the establishment in law of Chinas anti-money laundering administration system and clarified the anti-money laundering obligation of financial institutions. By revising three sets of anti-money laundering rules which were enacted in 2003 and enacting, independently or jointly with concerned departments, four sets of anti-money laundering rules, including the Anti-Money Laundering Rules for Financial Institutions, the Peoples Bank of China has extended the coverage of anti-money laundering regulation from financial institutions in the banking industry to those in the securities, futures and insurance industries; unified the anti-money laundering management of RMB and foreign currencies; and adjusted the criteria, path, time, etc. for reporting large-sum and questionable transactions. The Peoples Bank of China has continuously conducted on-site inspection against money laundering among financial institutions since 2004, and began to shape the off-site regulation system against money laundering in 2007. After years of efforts, Chinese financial institutions have universally established the anti-money laundering internal control system, conducted due diligence investigation of clients, and implemented the large-sum and questionable transaction reporting system and the system of keeping client identity information and transaction records.In terms of institutional arrangements, in 2003, the Peoples Bank of China set up the Anti-Money Laundering Bureau to assume the duty of anti-money laundering coordination in China which was formerly assumed by the Ministry of Public Security, established and improved the 23-member inter-ministerial anti-money laundering joint conference mechanism and the anti-money laundering coordination mechanism for financial regulatory authorities, and played an important role in drafting the Anti-Money Laundering Law of the Peoples Republic of China and applying for accession to the Financial Action Task Force on Money Laundering (FATF). In 2004, the Peoples Bank of China specially set up the China Anti-Money Laundering Monitoring and Analysis Center, which has realized network transmission of data with most financial institutions and formed an anti-money laundering monitoring and analysis network which covers all over the financial industry of China. The Peoples Bank of China has enacted a range of regulatory documents, conducted anti-money laundering inspection and investigation, and established a collaboration mechanism with the Ministry of Public Security and other concerned departments for assistance in case investigation. In 2006, the anti-money laundering function, institution, personnel and information systems of the State Administration of Foreign Exchange were transferred to the Peoples Bank of China, which led to the unified administration of anti-money laundering in RMB and foreign currencies. Today, the Peoples Bank of China has anti-money laundering divisions in all of its 36 branches at and above the sub-provincial level, which provides an organizational safeguard for anti-money laundering development.In terms of international cooperation, China has shown its determination to crack down on criminal activities of money laundering and terrorist financing by signing and ratifying the international conventions of the United Nations against money laundering and terrorist financing. As a permanent member state of the UN Security Council, China earnestly executes UN anti-terrorism resolutions and performs its international obligations. China actively takes part in activities of international anti-money laundering organizations: China founded the regional international anti-money laundering organization Eurasian Group on Combating Money Laundering and Financing of Terrorism (EAG) together with concerned countries in 2004, and became a formal member of the international organization for global anti-money laundering Financial Action Task Force (FATF) in 2007. On the principle of equality and mutual benefit, China is unremittingly engaged in international cooperation in intelligence exchange, cooperative training, assisted investigation, property recovery, extradition or repatriation of criminal suspects, etc. By February 2008, China has entered into financial intelligence exchange and cooperation MOUs or agreements against money laundering and terrorist financing with financial intelligence institutions of 14 countries and regions.(II) Opportunities and challenges During years of development, Chinas anti-money laundering has gone through the stages of initial research, exploration, innovation and adjustment, and is now striding toward the stage of full development in both depth and breadth. The five years from 2008 to 2012 will be a critical period of strategic opportunities for Chinas anti-money laundering development and for testing and improving the anti-money laundering system. On the one hand, as various anti-money laundering tasks advance, the level of anti-money laundering compliance of financial institutions will be raised step by step, the general public and all concerned departments will have an increasingly profound awareness of money laundering activities, and the unique role and effectiveness of the anti-money laundering system and mechanisms will be increasingly evident. On the other hand, China has actively participated in setting and executing the international anti-money laundering standards after its entry into the FATF, and the FATF is now reviewing and revising the existing international anti-money laundering standards for the fourth round of mutual evaluation in 2011. Making the anti-money laundering strategy is predicated upon analyzing and evaluating the current situation of anti-money laundering work. Chinas anti-money laundering work is still in the starting stage on the whole, despite its great achievements in this regard. The system of anti-money regimes still needs to be further improved, the anti-money laundering mechanisms have not fully played their role yet, imbalance in anti-money laundering work exists across industries and regions, and the effectiveness of the anti-money laundering regimes still needs to be further enhanced on the whole. II. Guiding Ideology and Overall Objective (I) Guiding ideology The guiding ideology of the Strategy is to analyze the domestic and international anti-money laundering situations and challenges, summarize practical experience and continue to improve the existing anti-money laundering system; test the reasonability of applying international standards to China, in view of Chinas national situation, on the basis of domestic risk assessment and by focusing on Chinas practice and innovation; formulate a unified national anti-money laundering development strategy covering the whole society, clearly define the overall objective and implementing principle and steps of anti-money laundering tasks, and try to explore and create an effective anti-money laundering mode with Chinese characteristics; and, on the principle of equal importance of pertinence, balance and effectiveness, formulate Chinas anti-money laundering strategy through unified planning and giving consideration to all aspects, implement it by stages and steps, focus on the improvement of the core system, steadily promote the system structuring, make the working mechanism more efficient, and comprehensively enhance the effectiveness of the anti-money laundering regimes.(II) Overall objective The overall objective of the Strategy is to construct an anti-money laundering working mechanism that conforms to international standards and Chinas national situation; establish a sound anti-money laundering and anti-terrorist financing legislation system; and, build a network of monitoring questionable fund transactions which covers the financial industry and other particular industries and create an anti-money laundering mechanism of “centering on prevention, combining crackdown and prevention, close collaboration, and great efficiency and practicality with Chinese characteristics before 2012, so as to effectively prevent and combat money laundering and other criminal activities, maintain the normal financial management order and social order and ensure Chinas national interests and economic security.(III) Implementing principle The principle for formulating and implementing the Strategy shall be equal importance to pertinence, effectiveness and balance.-Pertinence. Pertinence means to allocate resources reasonably, define goals, and gather resources to prevent and suppress money laundering activities related to particular serious crimes, on the basis of risk assessment. -Effectiveness. Effectiveness means to effectively prevent, suppress and punish money laundering activities and design an index system for quantitatively measuring the effects of anti-money laundering measures on realizing the anti-money laundering objective.-Balance. Balance means to maintain a balance between the prevention and suppression of criminal activities of money laundering and the increase of resource input and protection of lawful rights and interests, by giving appropriate consideration to both the anti-money laundering costs of the financial industry and other particular industries and the protection of client privacy and trade secrets.(IV) Implementing steps Departments vested with the anti-money laundering function will conduct discussions under the framework of the Inter-Ministerial Anti-Money Laundering Joint Conference to promote the formation of common understanding, strengthen research on the types of money laundering, conduct money laundering risk assessment, and jointly formulate and execute the Strategy, so as to prevent money laundering activities and combat the crimes of money laundering. In the implementation of the Strategy, the various aspects shall be prioritized, emphasis shall be placed on the improvement of the core system, and attention shall be paid to the outcome of the Strategy. Progress of anti-money laundering tasks shall be assessed regularly to determine the key areas of next step. In the implementation of the Strategy, the Peoples Bank of China will make specific scheduling and division of assignments jointly with members of the Inter-Ministerial Anti-Money Laundering Joint Conference.III. Specific Goals and Key Actions The overall objective may be divided into eight specific goals, and key actions are assigned to each specific goal.(I) Improving criminal legislation against anti-money launderingThe criminal legislation on money laundering crimes shall be further improved, and judicial interpretations concerning the identification of money laundering crimes shall be made. The key actions are: 1. Analyze and summarize money laundering cases and promote legislative and judicial tasks related to punishment of money laundering crimes. The Peoples Bank of China and other concerned departments shall investigate and study the specific anti-money laundering judicial practice, summarize criminal issues on money laundering in application of law, and give solutions and proposals to provide a practical reference for improving criminal legislation and justice in respect of money laundering. 2. Formulate judicial interpretations concerning money laundering crimes and strengthen the prosecution and trial of money laundering cases. Problems concerning application of law in criminal cases of money laundering shall be studied and solved.(II) Building a national anti-terrorist financing network The legal and regulatory systems for preventing and cracking down on terrorist financing activities shall be established and improved. 1. Improve judicial interpretations concerning anti-terrorist financing and crack down on the acts of raising funds for terrorist activities.2. Establish the terrorism-related assets freezing mechanism. The relevant provisions concerning terrorist financing prevention and suppression and judicial assistance shall be further clarified, and the regimes, provisions and procedures concerning the reporting, seizure, freezing, detention and confiscation of terrorism-related assets shall be established. The anti-terrorist financing system and mechanisms shall be further improved according to the International Convention for the Suppression of the Financing of Terrorism, to which China is a party, other anti-terrorist conventions, and anti-terrorist financing clauses of anti-terrorist resolutions of the UN Security Council and in consideration of the actualities at home.3. Formulate an anti-terrorist financing strategic plan which is adapted to the current anti-terrorism situation in China after research, and determine the guiding ideology, objective and key actions of the nations anti-terrorist financing endeavor for a future period, under the framework of the national anti-terrorist coordination mechanism.4. Strengthen terrorism-related fund monitoring and build a nationwide terrorist financing prevention network. 5. Study and track the characteristics of terrorist organizations and terrorists activities, improve the level of monitoring and analysis of questionable transactions suspected of involvement with terrorist financing, and gradually develop anti-terrorist financing monitoring indictors and analysis models suitable for Chinas national situation.6. Strengthen the supervisory inspection of financial institutions and non-profit organizations about cross-border terrorist financing, improve the awareness of anti-terrorist financing among financial institutions and the general public, and contain and cut off terrorist organizations and terrorists financing channels. (III) Enhancing the effectiveness of anti-money laundering regulation A risk-based anti-money laundering regulatory approach shall be adopted, the anti-money laundering regulatory mechanisms shall be improved constantly, and the role of anti-money laundering regulation shall be fully played.1. Conduct risk assessment and carry out the risk-based regulation principle. Based on risk assessment, the risk-based regulatory mode shall be adopted, financial institutions awareness of money laundering risks shall be raised, and financial institutions shall be directed to establish and execute a risk-based anti-money laundering system to achieve boosted effectiveness of anti-money laundering efforts. 2. Establish a system of issuing lists of suspected money laundering crimes, terrorist organization