Article: China ups fines and widens scope of draft money laundering law

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China ups fines and widens scope of draft money laundering law

Stella Qiu, Lusha Zhang and Tony Munroe, 01 June 2021

BEIJING (Reuters) – China’s central bank on Tuesday issued a revised draft anti-money laundering law, under which fines for certain offences would rise to as much as 10 million yuan ($1.6 million) and a host of non-financial institutions would be brought within its scope.

The draft, which updates proposals first made in 2006, would include the likes of property developers, accounting firms and precious metal exchanges, according to a copy of the draft law posted by the People’s Bank of China (PBOC) on its website. Non-bank payment firms, online microlenders, financial asset management firms and financial leasing companies will also be included.

Fines for offences will be increased to up to 2 million yuan, up from a previous maximum of 500,000 yuan, for failing to conduct due diligence on clients and reporting large or suspicious transactions.

Institutions could be fined a maximum of 10 million yuan if their actions have helped cover criminal gains or terrorist financing, compared with 5 million yuan previously.

The PBOC said its aim in promoting the new law was to prevent and curb money laundering and terrorist financing and other illegal activities, to safeguard national security and financial order, though it did not say if there were any more specific issues it was trying to tackle.

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