China

Last Updated: 19/02/2007 (Anti-money laundering legislation not applicable to lawyers)

CENTRAL AUTHORITY FOR REPORTING

ARE LAWYERS COVERED BY MONEY LAUNDERING LEGISLATION?

Not yet under current legislations except the general provision in Criminal Law

NAME LAWS REGARDING ANTI-MONEY LAUNDERING PROCEDURES

China adopts anti-money laundering law. The law is scheduled to take effect on 1 January 2007:

"China´s top legislature approved the country's first anti money laundering law in Beijing, China.

The Standing Committee of the National People's Congress widened the definition of money laundering to include corruption and bribe taking, violating financial management regulations and financial fraud.

Previously, the law identified only drug trafficking, organised or terrorist crime and smuggling as money laundering." 2/3

AML powers given to Chinese regulators:

"The People's Bank of China, the country's central bank, has passed on some of its anti-money laundering powers to regulators in the banking, securities and insurance industries.

The bank has granted the enforcement powers to the China Banking Regulatory Commission, the China Securities Regulatory Commission and the China Insurance Regulatory Commission." 1

Rules for Anti-Money Laundering by Financial Institutions, 2005

Rules of Implementation of the Measures Governing Reporting of Large and Suspicious Foreign Exchange Transactions, 2004

Administrative Rules for the Reporting of Large-Value and Suspicious RMB Payment Transactions, 2003

Administrative Rules for the Reporting by Financial Institutions of Large-Value and Suspicious Foreign Exchange Transactions, 2003

The Provisions Concerning the Real-Name Personal Savings Account System, 2000

Criminal Law 1997, Article 191

IN ADDITION TO THESE LAWS, IS THERE ANY MONEY LAUNDERING GUIDANCE FOR LAWYERS CURRENTLY IN PLACE?

UNDER WHAT CIRCUMSTANCES IS A LAWYER UNDER THE OBLIGATION TO REPORT?

There is currently no law specifically obliging a lawyer to report a money laundering offence.

LAWYER RESPONSIBILITY/LIABILITY

General provision in Chinese Criminal Law states that money laundering is illegal, how ever there are no specific rules for lawyers. 5/6

Article 191 of Criminal Law 1997

Article 191 states that whoever, while clearly knowing that the funds are proceeds illegally obtained from drug-related crimes or from crimes committed by mafias or smugglers and gains derived therefrom, commits any of the following acts in order to cover up or conceal the source or nature of the funds shall, in addition to being confiscated of the said proceeds and gains, be sentenced to fixed-term imprisonment of not more than five years or criminal detention and shall also, or shall only, be fined not less than five percent but not more than 20 percent of the amount of money laundried; if the circumstances are serious, he shall be sentenced to fixed-term imprisonment of not less than five but not more than 10 years and shall also be fined not less than five percent but not more than 20 percent of the amount of money laundried:

Providing fund accounts;
Helping exchange property into cash or any financial negotiable instruments;
Helping transfer capital through transferring accounts or any other form of settlement;
Helping remit funds to any other country; or
Covering up or concealing by any other means the nature or source of the illegally obtained proceeds and the gains derived therefrom.

Where a unit commits any of the crimes mentioned in the preceding paragraph, it shall be fined, and the persons who are directly in charge and the other persons who are directly responsible for the crime shall be sentenced to fixed-term imprisonment of not more than five years or criminal detention. 4/7

CLIENTS IDENTIFICATION AND VERIFICATION

No current obligations for client identification and verification.

LAWYERS PROSECUTED FOR MONEY LAUNDERING OFFENCES

No information available

Information Provided By:

David Liu, Jun He Law Offices, E-Mail: liudl@junhe.com.

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Sources

Saibal Dasgupta, "Central Bank gives AML powers to Chinese regulators", 25 January 2007, www.complinet.com.
Andrew Yeh in Beijing, The Financial Times, www.ft.com. November 01, 2006
China Daily, 1 November, 2006, www.chinadaily.com.
Marcus Simpson, “Chinese laundering law: a stone's throw away?”, 28 Apr 2006, www.complinet.com.
Wan Yan, “Anti-money laundering bill casts net wider”, 26 April 2006, www.chinaview.cn.
Marcus Simpson, “China prepares fresh money laundering laws”, 18 Apr 2006, www.complinet.com.
Saibal Dasgupta, “China and AML: the long march towards compliance”, 06 Sep 2005, www.complinet.com.