Order of the President of the People’s Republic of China No. 56
The Anti-Money Laundering Law of the People’s Republic of China, adopted at the 24th Meeting of the Standing Committee of the Tenth National People’s Congress of the People’s Republic of China on October 31, 2006, is hereby promulgated and shall go into effect as of January 1, 2007.
Hu Jintao
President of the People’s Republic of China
October 31, 2006
Anti-Money Laundering Law of the People’s Republic of China
(Adopted at the 24th Meeting of the Standing Committee of the Tenth National People’s Congress on October 31, 2006)
Contents
Chapter I General Provisions
Chapter II Supervision over Anti-Money Laundering
Chapter III The Obligation of Financial Institutions to Fight Against Money Laundering
Chapter IV Anti-Money Laundering Investigation
Chapter V International Cooperation in Anti-Money Laundering
Chapter VI Legal Responsibility
Chapter VII Supplementary Provisions
Chapter I
General Provisions
Article 1 This Law is enacted for the purpose of preventing money-laundering, preserving financial order and checking the crime of money-laundering as well as related crimes.
Article 2 For the purposes of this Law, anti-money laundering refers to the adoption of relevant measures according to the provisions of this Law to prevent any money laundering which is designed to cover up or conceal, by various means, the sources and nature of the criminal gains and proceeds derived from drug-related crimes, crimes committed by organizations of the nature of criminal gangs, terrorist crimes, crimes of smuggling, graft and bribery, crimes of disrupting the order of financial management, crimes of financial fraud, etc.
Article 3 The financial institutions established within the territory of the People’s Republic of China and the special non-financial institutions that are required by relevant regulations to perform the obligation of anti-money laundering shall, in accordance with law, adopt preventive and monitoring measures by establishing sound systems for distinguishing clients’ identities, preserving the data for clients’ identities and records of transactions, and a report system for transactions involving large sums of money and for dubious transactions, and thus perform their anti-money laundering obligation.
Article 4 The administrative department in charge of anti-money laundering under the State Council shall be responsible for supervision over anti-money laundering throughout the country. The relevant departments and authorities under the State Council shall, within the scope of their respective duties, perform their duties of supervision over anti-money laundering.
The administrative department in charge of anti-money laundering under the State Council, the relevant departments and authorities under the State Council and the judicial organs shall cooperate with each other in anti-money laundering.
Article 5 The data for clients’ identities and information about business transactions obtained through performing, in accordance with law, the duty or obligation of anti-money laundering shall be kept confidential. None of the aforesaid data or information may be provided to a unit or individual, unless it is done in accordance with the provisions of law.
The data for clients’ identities and information about business transactions obtained in the process of performing their duties of anti-money laundering by the administrative department in charge of anti-money laundering and the other departments or authorities shouldering the duty of supervision over anti-money laundering according to law shall only be used in the administrative investigation of anti-money laundering.
The data for clients’ identities and information about business transactions obtained by judicial organs according to this Law shall only be used in criminal litigations against money laundering.
Article 6 The authorities performing the obligation of anti-money laundering and their staff members that, according to law, submit reports on business transactions involving large sums of money or on dubious transactions shall be protected by law.
Article 7 Any unit or individual that finds any money laundering activity has the right to inform the administrative department in charge of anti-money laundering or to a public security organ of such activity. The authority or organ that accepts such information shall keep the informant as well as the contents of such information confidential.
Chapter II
Supervision over Anti-Money Laundering
Article 8 The administrative department in charge of anti-money laundering under the State Council shall organize and coordinate the efforts of anti-money laundering throughout the country, and it shall be responsible for monitoring the anti-money laundering funds, formulate, by itself or in conjunction with the relevant financial regulatory body under the State Council, anti-money laundering rules for financial institutions, conduct supervision over and inspection of the financial institutions as to how they perform their obligation of anti-money laundering, investigate into dubious transactions within the scope of its duties, and perform other duties for anti-money laundering as prescribed by law and by the State Council.
The bodies dispatched by the administrative department in charge of anti-money laundering under the State Council shall, within the scope of the powers authorized by the said department, conduct supervision over and inspection of the financial institutions as to how they perform their obligation of anti-money laundering.
Article 9 The relevant financial regulatory body under the State Council shall participate in the formulation of anti-money laundering rules for the financial institutions that are under its supervision, require them to establish a sound internal control system for anti-money laundering, as is required by relevant regulations, and perform the other duties in respect of anti-money laundering as prescribed by law and by the State Council.
Article 10 The administrative department in charge of anti-money laundering under the State Council shall establish an anti-money laundering information center, which shall be responsible for accepting and analyzing reports on business transactions involving large sums of money and dubious transactions and shall report the results of such analysis to the said department, as is required by relevant regulations, and perform the other duties assigned by the department.
Article 11 The administrative department in charge of anti-money laundering under the State Council may, in order to perform its duty of monitoring the anti-money laundering funds, collect the necessary information from the relevant departments and authorities under the State Council, and the latter shall provide such information accordingly.
The administrative department in charge of anti-money laundering under the State Council shall, at regular intervals, dispatch a circular about the work in anti-money laundering to the relevant departments and authorities under the State Council.
Article 12 Where the customs finds that the amount of cash or bearer securities that a person carries, when entering or leaving the country, exceeds the specified amount, it shall report the case to the administrative department in charge of anti-money laundering in a timely manner.
The norm for the amount of money that should be reported as mentioned in the preceding paragraph shall be prescribed by the administrative department in charge of anti-money laundering under the State Council in conjunction with the General Administration of Customs.
Article 13 When the administrative departments in charge of anti-money laundering and the other departments or authorities assigned, according to law, with the duty of supervision over anti-money laundering discovers any transactions suspected of the crime of money laundering, they shall report to an investigation organ in a timely manner.
Article 14 When the relevant financial regulatory body under the State Council examines an application for establishment of a new financial institution or for establishment of a branch by a financial institution, it shall examine the internal control system for anti-money laundering devised by the new institution or branch; it shall not grant an application that does not conform to the provisions of this Law.
Chapter III
The Obligation of Financial Institutions to Fight Against Money-Laundering
Article 15 A financial institution shall, according to the provisions of this Law, establish a sound internal control system for anti-money laundering, and the leading persons thereof shall be responsible for the effective application of such system.
A financial institution shall establish a special body for anti-money laundering or designate an internal division for the same.
Article 16 A financial institution shall, according to relevant provisions, establish a system for distinguishing its clients’ identities.
When a financial institution establishes a business relationship with a client or provides such one-off monetary services as cash remittance, cash conversion and bill payment above the norm specified, it shall require the client to show his authentic and valid identification certificate or any other such document and have it verified and registered.
Where a client entrusts an agent with a business transaction, the financial institution shall verify and register the identification certificates or any other such documents of both the agent and the principal.
Where a financial institution establishes a business relationship of personal insurance, trust, etc. with a client, who is not the contractual beneficiary, it shall, in addition, verify and register the identification certificate or any other such document of the beneficiary.
A financial institution shall not provide any service to or have any business transaction with a client whose identity is unclear or open any anonymous or pseudonymous account for a client.
Where a financial institution has any doubt about the authenticity, validity or completeness of a client’s identification data obtained earlier, it shall have the client’s identity distinguished anew.
When any unit or individual establishes a business relationship with a financial institution or requests a financial institution to provide a one-off monetary service, it/he shall provide its/his authentic and valid identification certificate or other such document.
Article 17 Where a financial institution distinguishes the identity of its client through a third party, it shall make sure that the third party has adopted the measures for distinguishing a client’s identity as required by this Law. Otherwise, the financial institution shall bear the liability for failure to perform the obligation of distinguishing the client’s identity.
Article 18 When distinguishing a client’s identity, a financial institution may, if it deems it necessary, have the information concerning the client’s identity verified by the public security organ or the administrative department for industry and commerce.
Article 19 A financial institution shall, in accordance with relevant provisions, establish a system for preservation of the data of its clients’ identities and the records of transactions.
During existence of the business relationship, the data of a client’s identity shall be updated in a timely manner along with any change that takes place.
Upon conclusion of a business relationship or transaction, the data of a client’s identity or information concerning a client’s transaction shall be kept for at least five years.
When a financial institution goes bankrupt or is dissolved, it shall transfer the data of its clients’ identities and information concerning its clients’ transactions to the authority designated by the relevant department under the State Council.
Article 20 A financial institution shall, according to relevant provisions, apply the report system for transactions involving large sums of money and for dubious transactions.
When the amount of money involved in a single transaction handled by a financial institution or in the accumulated transactions it handled within a prescribed period of time exceed the prescribed amount of money or when it finds any dubious transaction, it shall report to the Anti-Money Laundering Information Center in a timely manner.
Article 21 The specific measures for a financial institution to establish the system for distinguishing its clients’ identities and the system for preserving the data of its clients’ identities and records of transactions shall be formulated by the administrative department in charge of anti-money laundering under the State Council in conjunction with the relevant financial regulatory body under the State Council. The specific measures for report by financial institutions on transactions involving large sums of money and on dubious transactions shall be formulated by the said department.
Article 22 A financial institution shall, in compliance with the requirements of the system for prevention and monitoring of money laundering, conduct training in anti-money laundering and disseminate knowledge about the same.
Chapter IV
Anti-Money Laundering Investigation
Article 23 Where the administrative department in charge of anti-money laundering under the State Council or its dispatched body at the provincial level discovers any dubious transactions, which needs verification through investigation, it may go to a financial institution for investigation, and the latter shall cooperate and provide truthful documents and data.
For investigation into a dubious transaction, there shall be no fewer than two investigators, who shall show their legal certificates as well as the notification of investigation produced by the administrative department in charge of anti-money laundering under the State Council or by its dispatched body at the provincial level. Where the investigators are fewer than two or no legal certificate and notification of investigation are shown, the financial institution shall have the right to refuse to accept investigation.
Article 24 For investigation into a dubious transaction, the persons of the financial institution concerned may be questioned and required to make things clear.
A transcript of the questioning shall be made and shall be checked by the person questioned. In case of any omission or mistake in the transcript, the person questioned may request supplementation or correction. When the person questioned confirms the transcript, he shall affix his name or seal thereto, and the investigators shall sign their names on the transcript as well.
Article 25 Where further verification is required in an investigation, the investigators may, upon approval by the leading person of the administrative department in charge of anti-money laundering under the State Council or of its dispatched body at the provincial level, consult or duplicate the account information, records of transaction and any other relevant data of the institution or person under investigation, and may seal up any documents or data that may be transferred, concealed, tampered with, damaged or destroyed.
Before sealing up any documents or data, the investigators shall, in conjunction with the staff members of the financial institution present, check the number and produce a complete list in duplicate on the spot, to which the investigators and the staff members of the financial institution present shall affix their names or seals, and one of which shall be delivered to the financial institution and the other shall be attached to the file for reference.
Article 26 When suspicions about money laundering cannot be dispelled through investigation, the case shall immediately be reported to the competent investigation organ that has jurisdiction over such case. Where a client requests to transfer abroad the account funds involved in investigation, temporary freezing measures may be adopted, subject to approval by the leading person of the administrative department in charge of anti-money laundering under the State Council.
Upon receiving the case, the investigation organ shall decide, in a timely manner, whether or not to further freeze the funds as are temporarily frozen up according to the provisions of the preceding paragraph. Where it deems it necessary to continue freezing the funds, it shall adopt freezing measures according to the provisions of the Criminal Procedure Law. Where it deems it unnecessary to further freeze the funds, it shall immediately notify the administrative department in charge of anti-money laundering under the State Council, which shall immediately notify the financial institution to lift the freeze.
A temporary freeze shall not exceed 48 hours. Where a financial institution receives no notification on continued freeze from the investigation organ within 48 hours after it adopts temporary freezing measures, as is required by the administrative department in charge of anti-money laundering under the State Council, it shall immediately lift the freeze.
Chapter V
International Cooperation in Anti-Money Laundering
Article 27 The People’s Republic of China shall, according to the international treaties that it has concluded or acceded to or according to the principles of equality and reciprocity, work in cooperation with other countries in anti-money laundering.
Article 28 The administrative department in charge of anti-money laundering under the State Council shall, as authorized by the State Council, represent the Chinese government when working in cooperation with foreign governments and relevant international organizations in anti-money laundering and exchanging, according to law, with anti-money laundering organizations overseas information and data related to anti-money laundering.
Article 29 Judicial assistance involved in investigation into any crime of money laundering shall be handled by judicial organs according to the provisions of relevant laws.
Chapter VI
Legal Responsibility
Article 30 Where a staff member of the administrative department in charge of anti-money laundering or of any other department or authority shouldering the duty of supervision over anti-money laundering according to law commits any of the following acts, he shall be given an administrative sanction according to law:
(1) in violation of relevant provisions, conducting inspection, investigation or adopting temporary freezing measures;
(2) divulging State secrets, business secrets or other persons’ privacy which he comes to know in anti-money laundering;
(3) in violation of relevant provisions, imposing administrative penalties on relevant institutions or persons; or
(4) other acts committed when failing to perform his duties according to law.
Article 31 Where a financial institution commits one of the following acts, the administrative department in charge of anti-money laundering under the State Council or its authorized dispatched body at or above the level of a city divided into districts shall order it to rectify within a time limit; if the circumstances are serious, it shall propose that the financial regulatory body concerned order, according to law, the financial institution to give a disciplinary sanction to the director or senior manager who is directly in charge or any other person who is directly responsible:
(1) failing to establish an internal control system for anti-money laundering according to relevant provisions;
(2) failing to establish a special body for anti-money laundering or designate an internal division for anti-money laundering; or
(3) failing to conduct, among its employees, training in anti-money laundering as is required by relevant provisions.
Article 32 Where a financial institution commits one of the following acts, the administrative department in charge of anti-money laundering under the State Council or its dispatched body at or above the level of a city divided into districts shall order it to rectify within a time limit; if the circumstances are serious, a fine of not less than RMB 200, 000 yuan but not more than 500, 000 yuan shall be imposed on the financial institution, and a fine of not less than 10, 000 yuan but not more than 50, 000 yuan shall be imposed on the director or senior manager who is directly in charge or any other person who is directly responsible:
(1) failing to perform the obligation of distinguishing its clients’ identities, as is required by relevant provisions;
(2) failing to preserve the data of its clients’ identities and records of transactions, as is required by relevant provisions;
(3) failing to submit report on transactions involving large sums of money or on dubious transactions, as is required by relevant provisions;
(4) making transactions with a client whose identity is unclear or opening an anonymous or pseudonymous account therefor;
(5) divulging any relevant information in violation of confidentiality rules;
(6) refusing to accept to or obstructing inspection of or investigation into money laundering; or
(7) refusing to provide data needed for investigation or intentionally providing false data.
Where a financial institution commits any of the aforesaid acts and thus leads to the consequence of money laundering, it shall be fined not less than 500, 000 yuan but not more than 5, 000, 000 yuan, and the director or senior manager who is directly in charge or any other person who is directly responsible shall be fined not less than 50, 000 yuan but not more than 500, 000 yuan; if the circumstances are especially serious, the administrative department in charge of anti-money laundering may propose that the financial regulatory body concerned order the financial institution to suspend business for rectification, or revoke its business license.
With regard to the director or senior manager who is directly in charge of the financial institution or any other person who is directly responsible that finds himself in the circumstances mentioned in the preceding two paragraphs, the administrative department in charge of anti-money laundering may propose that the financial regulatory body concerned order, according to law, the financial institution to give a disciplinary sanction thereto or that it, in accordance with law, disqualify him for the post and prohibit him from working in the financial sector.
Article 33 Where a person violates the provisions of this Law, which constitutes a crime, he shall be investigated for criminal responsibility according to law.
Chapter VII
Supplementary Provisions
Article 34 For the purposes of this Law, financial institutions include the policy-oriented banks, commercial banks, credit cooperatives, postal savings and remittance institutions, trust investment companies, securities companies, futures brokerage companies and insurance companies that are established according to law to engage in financial business, as well as other institutions that are determined and made known as such by the administrative department in charge of anti-money laundering under the State Council to engage in financial business.
Article 35 The scope of the special non-financial institutions that shall perform the obligation of anti-money laundering, and the said obligation shall be defined, the specific measures for supervision over such institutions shall be formulated, by the administrative department in charge of anti-money laundering under the State Council in conjunction with the departments concerned under the State Council.
Article 36 The provisions of this Law are applicable to the monitoring of the funds suspected of being used for any terrorist activities; where otherwise provided for in other laws, such provisions shall prevail.
Article 37 This Law shall go into effect as of January 1, 2007.