Yes, the FATF published the First Mutual Evaluation Report on Anti-Money Laundering and Combating the Financing of Terrorisom of the People’s Repulic of China on 29 June 2007, the Follow-up Report to the Mutual Evaluation Report of China on 17 February 2012, and a new Mutual Evaluation Report of China on 17 April 2019.
34. If yes, what were the findings concerning Lawyers' compliance with the FATF 40+9 recommendations?
FATF’s first mutual evaluation took place in 2006. The feedback by the FATF in relation to designated non-financial businesses and professions (“DNFBP”), including lawyers, was that:
- There are only very limited customer identification and record keeping requirements apply to dealers in precious metals and stones, lawyers, notaries, real estate agents and company service providers;
- Dealers in precious metals and stones, lawyers, notaries, real estate agents and company service providers are not required to establish internal AML/CFT control programs;
- Dealers in precious metals and stones, lawyers, notaries, real estate agents and company service providers are not monitored or supervised for compliance with AML/CFT requirements, since no such requirements yet apply to them.
Since then, the PRC has had 8 follow-up evaluations, and the follow-up report released in February 2012 concluded that China has made significant overall progress since the first mutual evaluation report. In terms of findings concerning lawyers' compliance, the follow-up report indicates that:
- China has significantly strengthened the AML/CFT requirements applicable to trust service providers (“TSPs”), and taken some action to strengthen CDD and record keeping requirements in the real estate sector. However, China has not yet extended comprehensive customer identification and record keeping requirements to dealers in precious metals and stones, lawyers, notaries, real estate agents and company service providers.
- China has strengthened the obligations for TSPs to establish internal AML/CFT control programs. However, it has not yet extended similar requirements to any other type of DNFBP, i.e. dealers in precious metals and stones, lawyers, notaries, real estate agents and company service providers.
- China has made some progress in establishing in the real estate sector a joint coordination mechanism on AML/CFT supervision. Additionally, work is underway to supervise the real estate sector for compliance with AML/CFT requirements. However, dealers in precious metals and stones, lawyers, notaries, real estate agents, and company service providers are not yet monitored or supervised for compliance with AML/CFT requirements, as comprehensive AML/CFT requirements do not yet apply to them.
On 17 April 2019, a new Mutual Evaluation Report was released, concluding that in the PRC, except for precious metals trading venues and dealers, DNFBPs (including lawyers) are not subject to AML/CFT obligations due to the absence of an explicit designation. The report further stated that the PBC is working with competent departments of relevant industries to establish the AML/CFT administration systems for lawyers and notaries, which will stipulate obligations on CDD, recordkeeping, Politically Exposed Persons, new technologies, internal controls, enhanced CDD measures against the higher-risk countries, and tipping-off and confidentiality for these DNFBPs.