Law of the People's Republic of China on Anti-money Laundering
Table of Contents
Chapter I General Provisions
Chapter II Supervision and Administration on Anti-money Laundering
Chapter III Obligations of Financial Institutions for Anti-money Laundering
Chapter IV Investigation on Anti-money Laundering
Chapter V International Cooperation on Anti-money Laundering
Chapter VI Legal Liabilities
Chapter VII Supplementary Provisions
Chapter I General Provisions
Article 1 For the purpose of preventing money-laundering, maintaining the financial order and restraining the crime of money-laundering and other related crimes, the present Law is formulated.
Article 2 The term "anti-money laundering" as mentioned in the present Law refers to the act of adopting related measures in accordance with the provisions of the present Law to prevent any money laundering activity so as to conceal or disguise, by all means, the sources and nature of criminal proceeds generated from any drug crime, organized crime in the nature of gangland, crime of terrorism, crime of smuggling, crime of corruption or bribery, crime of disrupting the financial management order, crime of financial fraud and etc..
Article 3 Financial institutions which are established within the territory of the People's Republic of China or special non-financial institutions that shall fulfill the obligations of anti-money laundering, shall adopt related prevention and supervision measures under law, establish and improve the clients' identity identification system, the preservation system of clients' identity materials and transactional records, the reporting system of large-sum transactions and doubtful transactions, and fulfill their respective anti-money laundering obligations.
Article 4 The competent department for anti-money laundering of the State Council shall be responsible for anti-money laundering supervision and administration throughout the country. The related departments and organs under the State Council shall, within their respective scope of functions and duties, fulfill their obligations of anti-money laundering supervision and administration.
The competent department of anti-money laundering of the State Council, the related departments and organs under the State Council and the judicial organs shall cooperate with each other in the anti-money laundering work.
Article 5 The identity material or transactional information of any client, which is acquired during the performance of the duties and functions of anti-money laundering under law, shall be kept confidential. None of the aforesaid information may be provided to any entity or individual unless it is admitted by related provisions of law.
The identity material and transactional information of any client, which is acquired by the competent department of anti-money laundering or any other department or organ undertaking the obligation of anti-money laundering supervision and administration under law when fulfilling their anti-money laundering functions and duties, shall only be used in the administrative investigation for anti-money laundering.
The identity material and transactional information of any client as acquired by the judicial organ according to the present Law shall only be used in the criminal litigation on anti-money laundering.
Article 6 The submission of a report on large-sum transaction or doubtful transaction under law by any organ or functionary bearing the anti-money laundering obligation, shall be protected by law.
Article 7 In case any entity or individual finds any money laundering activity, it/he has the right to tip it off to the competent department of anti-money laundering or to the public security organ. The organ accepting the tip-off shall keep confidential the tip-off maker as well as the tipped–off contents.
Chapter II Supervision and Administration on Anti-money Laundering
Article 8 The competent department for anti-money laundering of the State Council shall organize and coordinate the anti-money laundering work throughout the country, take charge of the supervision over anti-money laundering funds, formulate the related anti-money laundering regulations of financial institutions by itself or in collaboration with the related financial regulatory bodies under the State Council, undertake supervision and examination on the performance of anti-money laundering obligations by financial institutions, investigate into doubtful transactions within the power limit of its functions and duties, and fulfill other duties and functions of anti-money laundering prescribed by law or by the State Council.
The organs dispatched by the competent department for anti-money laundering of the State Council shall, within their respective power limits as authorized by the competent department for anti-money laundering of the State Council, undertake supervision and examination on the performance of anti-money laundering obligations by financial institutions.
Article 9 The related financial supervision and administration institutions under the State Council shall take part in the formulation of anti-money laundering regulations for financial institutions under their respective supervision and administration, require them to establish and improve an internal control system of anti-money laundering and fulfill other duties and functions of anti-money laundering as prescribed by law or by the State Council.
Article 10 The competent department for anti-money laundering of the State Council shall establish an Anti-money Laundering Information Center to be responsible for accepting and analyzing the reports on large-sum transactions and doubtful transactions, report the analysis results to the competent department for anti-money laundering of the State Council in light of the related provisions, and fulfill other functions and duties as prescribed by the competent department for anti-money laundering of the State Council.
Article 11 The competent department for anti-money laundering of the State Council, in order to fulfill its duties and functions of supervising anti-money laundering funds, may collect necessary information from related departments and organs of the State Council, which shall provide assistance.
The competent department for anti-money laundering of the State Council shall circulate the anti-money laundering work to related departments and organs of the State Council on a periodical basis.
Article 12 If the customs finds that any cash or secret securities carried by an individual exceed the prescribed sum, it shall report the case to the competent department for anti-money laundering in a timely manner.
The standards of amount that shall be circulated in the preceding paragraph shall be prescribed by the competent department of anti-money laundering of the State Council in conjunction with the General Administration of Customs.
Article 13 If the competent department for anti-money laundering or any other department or organ undertaking the obligation of anti-money laundering supervision and administration under law finds any transaction involved in the crime of money laundering, it shall report it to the investigation organ in time.
Article 14 If the related financial supervision and administration institution under the State Council conducts examination and approval of the establishment of a new financial institution or establishment of any branch or sub-branch of a financial institution, it shall examine the internal control system of anti-money laundering of the new institution and may not approve any application for establishment that fails to accord with the provisions of the present Law.
Chapter III Obligations of Financial Institutions for Anti-money Laundering
Article 15 Financial institutions shall, in accordance with the provisions of the present Law, establish and improve their internal control systems for anti-money laundering, and the principal thereof shall be responsible for the effective implementation of their internal control systems for anti-money laundering.
Financial institutions shall establish special institutions of anti-money laundering or designate internal departments to be responsible for anti-money laundering.
Article 16 Financial institutions shall establish a clients' identity identification system in accordance with the related provisions.
If any financial institution establishes business relationship with a client or provides one-off financial services such as cash remittance, cash conversion and bill payment beyond the prescribed amount, it shall require the client to show its/his authentic and effective identity certificate or any other identity certification document, and make related verification and registration.
If a client entrusts an agent to deal with the transaction on its/his behalf, the related financial institution shall make verification and registration of the identity certificates or other identity certification documents of both the agent and the principal at the same time.
If a financial institution establishes business relationship of personal insurance or trust with his client, in case the contractual beneficiary is not the client himself, the financial institution shall make verification and registration of the identity certificate or any other identity certification document of the beneficiary as well.
Financial institutions may not provide any service to or make any trade with any client who fails to clarify his identity or establish any anonymous or pseudonymous account.
If a financial institution has any doubt about the authenticity, effectiveness or integrality of a client's identity material, it shall check the client's identity again.
In case any entity or individual establishes business relationship with any financial institution or requires it to provide any one-off financial service, it/he shall provide its/his authentic and effective identity certificate or any other identity certification document.
Article 17 If a financial institution certifies the identity of its client through a third party, it shall be assured that the third party has adopted measures for clients' identity clarification as prescribed by the present Law. In case any third party fails to adopt the measures for the clients' identity clarification as prescribed by the present Law, the financial institution shall bear the liabilities for its failure to fulfill the obligation of clarifying the client's identity.
Article 18 Financial institutions when conducting the clarification of its clients' identities, may, if it so requires, verify the related identity information with departments such as the public security organ and the competent department for industry and commerce.
Article 19 Financial institutions shall establish a preservation system for its clients' identity materials and transaction records.
During the existence of business relationship, any client's identity material that changes shall be updated in time.
After the conclusion of any business relationship or transaction, the related clients' identity materials or clients' transaction information shall be kept for at least 5 years.
If a financial institution goes bankrupt or is dissolved, it shall transfer the related clients' identity materials and transaction records to the institution designated by the related department of the State Council.
Article 20 Financial institutions shall, in light of the related provisions, carry out the reporting system of large-sum transactions and doubtful transactions.
If any single transaction handled by a financial institution or the accumulated transaction within a prescribed time limit goes beyond the prescribed sum, or if any doubtful transaction is found, it shall be timely reported to the Anti-money Laundering Information Center.
Article 21 The specific measures for a financial institution to establish a clients' identity clarification system and a preservation system for its clients' identity materials and transactional records shall be formulated by the competent department for anti-money laundering of the State Council in conjunction with the related financial supervision and administration institution under the State Council. The specific measures for reporting large-sum transactions and doubtful transactions by financial institutions shall be formulated by the competent department for anti-money laundering of the State Council.
Article 22 Financial institutions shall, in light of the requirements for anti-money laundering prevention and supervision, carry out anti-money laundering trainings and drumbeating.
Chapter IV Investigation on Anti-money Laundering
Article 23 If the competent department of anti-money laundering of the State Council or any its provincial dispatched organs finds any doubtful transaction, if an investigation and verification is therefore required, it may conduct an investigation into the related financial institutions which shall provide assistance and faithfully provide the related documents and materials.
For the investigation into any doubtful transaction, there shall be not less than 2 investigators, who shall show their legal certificates and the investigation notice produced by the competent department for anti-money laundering of the State Council or the organ dispatched thereof at the provincial level. In case the investigators are fewer than 2, or the related legal certificate or investigation notice fails to be shown, the financial institution subject to investigation has the right to refuse the investigation.
Article 24 For the investigation into any doubtful transaction, the related investigators may inquire of the related personnel of related financial institutions about related information.
A transcript shall be made for an inquiry, and shall be checked against the person being inquired. In the case of any omission or mistake in the transcript, the person being inquired may request for supplementation or correction. After the person being inquired confirms that the transcript is inerrant, he shall render his signature or seal thereto. And the related investigators shall render their signatures onto the transcript as well.
Article 25 If a further examination is required during an investigation, the investigator may, upon the approval of the principal of the competent department for anti-money laundering of the State Council or the organ dispatched thereof at the provincial level, consult and photocopy the related account information, transactional records and any other related materials of the inquired institution or persons, and may seal up any document or material that may be transferred, concealed, sophisticated or destroyed.
If an investigator seals up any document or material, he shall, together with the related personnel of the investigated financial institution on the spot, check them out and produce a checklist in duplicate, to which the signatures or seals of investigators and personnel of the financial institutions on the spot shall be rendered. One copy shall be delivered to the financial institution, and the other be attached to the related file for reference.
Article 26 In case any suspicion of money laundering can still not be cleared off upon investigation, the case shall be reported to the competent investigation organ immediately. If any client requires transferring the account capital as involved in the investigation to a foreign country, temporary freezing measures may be adopted, upon the approval of the principal of the competent department for anti-money laundering of the State Council.
After the investigation organ receives a case, it shall timely decide whether or not to further freeze the capital as temporarily frozen up in accordance with the provisions of the preceding paragraph. If it deems that it is necessary to continue freezing the capital, freezing measures shall be adopted according to the provisions of the Criminal Litigation Law. In case it deems that it is unnecessary to freeze the capital any more, it shall immediately notify the competent department for anti-money laundering of the State Council, which shall immediately notify the related financial institution to lift the freeze.
The temporary freezing shall not exceed 48 hours. If a financial institution does not receive any notice on continuing freezing from the investigation organ within 48 hours after it adopts temporary freezing measures pursuant to the requirements of the competent department for anti-money laundering of the State Council, it shall immediately lift the freeze.
Chapter V International Cooperation on Anti-money Laundering
Article 27 The People's Republic of China shall, in light of the international treaties that China has concluded or acceded to or according to the principles of equality and reciprocity, carry out the international cooperation on anti-money laundering.
Article 28 The competent department for anti-money laundering of the State Council shall, pursuant to the authorization of the State Council, represent the Chinese government to make anti-money laundering cooperation with foreign governments and related international organizations, exchange the related information and materials involved in anti-money laundering with overseas anti-money laundering institutions under law.
Article 29 Juridical assistance for investigation into any crime of money laundering shall be made by the judicial organ in accordance with the provisions of related laws.
Chapter VI Legal Liabilities
Article 30 If any functionary of the competent department for anti-money laundering or any other department or organ undertaking the functions and duties of anti-money laundering supervision and administration is under any of the following circumstances, an administrative sanction shall be imposed upon under law:
(1) making examination, investigation or adopting any temporary freezing measures in violation of the related provisions;
(2) divulging any state secret, commercial secret or individual privacy, which he has access to in his anti-money laundering work;
(3) imposing any administrative punishment on the related institution and personnel in violation of the related provisions; or
(4) having any act of failing to perform his duties and functions under law.
Article 31 If a financial institution has any of the following acts, the competent department for anti-money laundering of the State Council or the dispatched organ authorized thereof at or above the districted city level shall order it to make corrections within a time limit. If the circumstance is serious, it shall advise the related financial supervision and administration institution to order the related financial institution to give a disciplinary sanction to its directly liable chairperson, senior managers or any other person directly responsible under law:
(1) failing to establish an internal control system of anti-money laundering according to the related provisions;
(2) failing to establish a special institution for anti-money laundering or designate an internal department to take charge of anti-money laundering; or
(3) failing to conduct anti-money laundering trainings to its employees according to the related provisions.
Article 32 If a financial institution is under any of the following circumstances, the competent department for anti-money laundering of the State Council or the dispatched organ authorized thereof at or above the districted city level shall order it to make corrections. If the circumstance is serious, a fine of 20, 000 Yuan up to 50, 000 Yuan shall be imposed on the financial institution and a fine of 10, 000 Yuan up to 50, 000 Yuan shall be imposed upon its directly liable chairman, senior managers or any other person directly responsible:
(1) failing to fulfill the obligation of certifying any clients' identity according to the related provisions;
(2) failing to preserve the clients' identity materials and transactional records according to the related provisions;
(3) failing to make related reports on large-sum transactions or doubtful transactions according to the related provisions;
(4) trading with any client who fails to clarify its/his identity or establishes any anonymous account or pseudonymous account therefor;
(5) violating the related confidential provisions or divulging any related information;
(6) refusing or retarding any anti-money laundering examination or investigation; or
(7) refusing to provide any investigation material or providing any false material on purpose.
If a financial institution has any of the aforesaid acts and thus results in the consequence of money laundering, a fine of 500, 000 Yuan up to 5, 000, 000 Yuan shall be imposed upon the financial institution and a fine of 50, 000 Yuan up to 500, 000 Yuan shall be imposed upon its directly liable chairman, senior managers or any other person directly responsible. If the circumstance is serious, the competent department for anti-money laundering may advise the related financial supervision and administration institution to order the financial institution to suspend its business for rectification or to revoke its business license.
As to the directly liable chairman, senior managers or any other person directly responsible of a financial institution as prescribed in the preceding two paragraphs, the competent department of anti-money laundering may advise the related financial supervision and administration institution to order the financial institution to give a disciplinary sanction thereto or revoke his qualification to hold a post and prohibit him from engaging in any financial work.
Article 33 If anyone violates the provisions of the present Law and thus a crime is constituted, he shall be subject to criminal liabilities under law.
Chapter VII Supplementary Provisions
Article 34 "Financial institutions" as mentioned in the present Law refer to the policy banks, commercial banks, credit cooperatives, post savings institutions, trust investment companies, securities companies, futures brokerage companies, insurance companies and any other institution, which have been determined and publicized by the competent department for anti-money laundering of the State Council to engage in financial undertakings.
Article 35 The scope of the special non-financial institutions that shall perform the obligation of anti-money laundering, the specific anti-money laundering obligations thereof and the specific measures for supervision and administration on special non-financial institutions shall be formulated by the competent department for anti-money laundering of the State Council in conjunction with the related departments of the State Council.
Article 36 The supervision over any fund suspected of being involved in any terrorism activity shall be subject to the present Law. If there is any other provision in this regard, such provision shall prevail.
Article 37 The present Measures shall enter into effect as of January 1, 2007. |
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