China strengthens anti-money-laundering obligations
BEIJING - New measures for the Supervision and Administration of Anti-Money Laundering and Counter-Terrorist Financing of Financial Institutions recently promulgated by the People's Bank of China (PBOC) came into effect on August 2021. Among other things, the Measures expand the scope of applicable entities, provide specific details of internal control and risk management requirements and increase PBOC's supervision and administration powers.
Lawyers Baker McKenzie says the new Measures are a significant development, demonstrating China's efforts to improve and enhance its anti-money laundering and counter-terrorist financing regime.
Organisations subject to the AML/CTF requirements under the new Measures have been widened to include loan companies, asset management subsidiaries of commercial banks, non-banking payment institutions, insurance agents and insurance brokers.
Baker McKenzie says financial institutions subject to existing AML regulatory obligations will need to review and pay attention to the connection between the Measures and their existing obligations to ensure they are fully compliant with PBOC's requirements.
BM says the Measures adopt a risk-based approach and require that an organisation's internal control mechanism correspond to its AML/CTF risks and business scale, and should include a risk assessment mechanism.
"Applicable institutions will need to review their existing controls to ensure compliance, noting that PBOC has been given greater powers for enhanced AML/CTF supervision," BM adds.
"Organisations are reminded to undertake customer due diligence, including the need to keep customer identification data and transaction records, and to report large-value and suspicious transactions.