The Financial Action Task Force (FATF) has completed an assessment of the implementation of anti-money laundering and counter-terrorist financing standards in the People’s Republic of China (China). Among its major findings were:
- With the enactment of the AML Law and the amendment of the Penal Code in 2006, China has in a very short time made significant progress in implementing and enhancing its AML/CFT system.
- There seems to be a reluctance to pursue money laundering as a stand-alone offence, except as an offshoot of a known predicate criminal activity. Overall, the effectiveness of the money laundering offence should be enhanced by raising awareness with the prosecutorial and judicial authorities and by criminalizing self-laundering.
- Comprehensive preventive measures have only recently been enacted and continue to be expanded, but are still relatively limited to meet the FATF requirements.
- The AML/CFT measures presently apply to a broad range of financial institutions; however, the FATF recommends that comprehensive AML/CFT measures should also apply to a wider range of non-financial businesses and professions.
- The FATF noted a robust basic framework to fight the misuse of legal persons and arrangements. Nonetheless, information on beneficial ownership is not available which presents a major shortcoming.
- With respect to terrorist financing, China does not have a separate preventive mechanism to freeze terrorist assets, however, China’s efforts to proactively address alternative remittance systems is commendable.
The report was released on 20 August 2007. A summary of the major findings of the report was released on 5 July 2007. China is the fourteenth country to be examined in the FATF’s third series of mutual evaluations of its members.
For further information, journalists are invited to contact the FATF Secretariat, 2, rue André-Pascal, 75775 Paris Cedex 16 (tel: +33 1 45 24 79 45, fax: +33 1 44 30 61 37, email: firstname.lastname@example.org.
This mutual evaluation was conducted using the FATF Recommendations as published in October 2004, and the 2004 Methodology for Assessing Compliance with the FATF 40 Recommendations and FATF 9 Special Recommendations.