SHANGHAI, CHINA – April 19, 2013 – According to Diaz Reus & Targ attorney Xingjian “Jeff” Zhao, the Chinese government is ramping up its enforcement of the country’s anti-money laundering and combating the financing of terrorism (AML/CFT) laws, and incidents of non-compliance are being taken ever more seriously.
Zhao spoke at the April 19, 2013, Asia GRC Exchange conference at the Swissôtel Grand in Shanghai, China. The Asia GRC Exchange is a comprehensive series for risk management, internal audit and corporate compliance conferences held in Mainland China, Hong Kong, and Singapore. Speakers from multinational companies, law firms, and government agencies share best practices, strategies and tools to explore various aspects of governance, risk and compliance.
“AML/CFT regulatory processes in China are in a still-evolving state,” said Zhao at the conference. “Management of both local and foreign institutions operating in China must ensure that they have a good understanding of AML/CFT requirements and that they make compliance a high priority. This includes legislative reform, the strengthening of enforcement mechanisms, and implementing international cooperation initiatives.”
Zhao also pointed out that banks must deliver monthly reports describing suspicious activities and retain transaction records for five years. Cash transactions (such as cash transfers and cash exchanges) need to be included in the AML reporting requirements and stiff penalties (civil and criminal) should be imposed for noncompliance.
“The Chinese government also needs to give high priority to establishing local on-the-ground expertise on AML/CFT laws and regulations,” he added.