People's Bank of China, Financial Institutions Anti-money Laundering Provisions

Promulgated: January 3 2003
Effective: March 1 2003
Applicability: The Provisions apply to financial institutions lawfully established and operating in China, including commercial banks, finance companies, trust and investment companies, lease financing companies and foreign-invested financial institutions (Article 2).

Main contents: Financial institutions are required by law to assist and cooperate with judicial authorities, customs and taxation authorities in investigating, freezing or withholding account funds (Article 6). In conformity with the provisions of the People's Bank, financial institutions shall set up a sound anti-money laundering internal control mechanism (Article 8). This will include establishing a specialized department to handle anti-money laundering, or designating an already established department to handle the task (Article 9). The Provisions also require that financial institutions demand and record client identification (Articles 10 and 11). When a financial institution suspects that a large or suspicious transaction may be linked to criminal activity, it should promptly notify the local public security department (Article 16). Account and transaction records shall be kept for a minimum of five years (Article 17). The Provisions provide for a fine of up to Rmb30,000 for actions breaching the Provisions. In serious cases, the senior management of the financial institution may be deprived of his professional qualifications (Article 20).
Related legislation: PRC People's Bank of China Law, Mar 18 1995, CLP 1995 No.5 p23