Administrative Measures for the Identification of Financial Institution Clients and the Preservation of Clients' Identities and Transaction Records

Administrative Measures for the Identification of Financial Institution Clients and the Preservation of Clients' Identities and Transaction Records


Administrative Measures for the Identification of Financial Institution Clients and the Preservation of Clients' Identities and Transaction Records

Order of the People's Bank of China, the China Banking Regulatory Commission, the China Securities Regulatory Commission and the China Insurance Regulatory Commission [2007] No.2

June 21, 2007

The Administrative Measures for the Identification of Financial Institution Clients and the Preservation of Clients' Identities and Transaction Records, which have, in accordance with the provisions of the Anti-money Laundering Law of the People's Republic of China and other laws, been formulated jointly by the People's Bank of China, the China Banking Regulatory Commission, the China Securities Regulatory Commission and the China Insurance Regulatory Commission, are hereby promulgated and shall come into effect from August 1, 2007.

Governor of the People's Bank of China: Zhou Xiaochuan
Chairman of the People's Bank of China: Liu Mingkang
Chairman of the China Securities Regulatory Commission: Shang Fulin
Chairman of the China Insurance Regulatory Commission: Wu Dingfu

Attachment: Administrative Measures for the Identification of Financial Institution Clients and the Preservation of Clients' Identities and Transaction Records.

Chapter I General Provisions
 
Article 1 In order to prevent money-laundering and terrorism-financing activities, standardize financial institutions' acts of identifying their clients and preserving their clients' identities and its transaction records, and maintain the normal financial order, these Measures are hereby formulated in accordance with the provisions of the Anti-money Laundering Law of the People's Republic of China and other laws and administrative regulations.
 
Article 2 These Measures shall apply to the following financial institutions duly incorporated within the territory of China:
1. Policy banks, commercial banks, rural cooperative banks, urban credit cooperatives, and rural credit cooperatives;
2. Securities companies, futures companies, and fund management companies;
3. Insurance companies and insurance asset management companies;
4. Trust companies, financial asset management companies, financial companies, financial leasing companies, automobile financing companies, and money brokerage companies; and
5. Other financial institutions as determined and announced by the People's Bank of China.
These Measures shall apply to the performance by an institution engaged in exchange, payment and settlement, or fund sale business of its obligations of identifying its clients and preserving its clients' identities and its transaction records.
 
Article 3 A financial institution shall act in due diligence, establish, perfect and implement its regulations on identifying its clients, comply with the principle of "getting to know your clients". With respect to its clients who are likely to be engaged in money-laundering or terrorism-financing, the financial institution shall take corresponding measures to get to know its clients and the purpose and nature of their transactions and to get to know the natural persons actually controlling its clients and the actual beneficiaries of the transactions. A financial institution shall, in compliance with the principles of security, accuracy, completeness and confidentiality, properly preserve its clients' identities and its transaction records and ensure that every transaction can be adequately redisplayed, so as to provide the necessary information for identifying its clients, monitoring and analyzing the circumstances of their transactions, investigating suspicious transactional activities, and investigating and prosecuting money-laundering cases.
 
Article 4 A financial institution shall, in accordance with the provisions of laws relating to anti-money laundering and anti-terrorism financing, establish and perfect its internal operation rules for identifying its clients and preserving their identities and its transaction records, and other operations. It shall designate a person to be in charge of compliance of anti-money-laundering and anti-terrorism-financing regulations, reasonably design its business process and operation standards, and conduct an internal audit on a regular basis in order to evaluate whether or not its internal operation rules are sound and valid, and to promptly modify and improve relevant systems.
 
Article 5 A financial institution shall supervise and administrate the implementation by its branches of its regulations on identifying its clients and preserving their identities and its transaction records.
The head office or group headquarter of a financial institution shall set uniform requirements with respect to the work of identifying its clients and preserving their identities and its transaction records.
A financial institution shall require its overseas branches and affiliates to implement, to the extent permissible under the provisions of laws of the countries (or regions) they are situated, relevant requirements hereof. Where the said countries (or regions) have stricter requirements, the said overseas branches and affiliates shall comply therewith. Where the requirements hereof are stricter compared to relevant provisions of the said countries (or regions), but the said countries (or regions) prohibit or limit the implementation hereof by the said overseas branches and affiliates, the said financial institution shall report the matter to the People's Bank of China.
 
Article 6 Where a financial institution establishes a correspondent banking relationship or a business relationship of similar nature with an overseas financial institution, it shall collect sufficient information relating to the business, reputation, internal control, received supervision and other things of such an overseas financial institution, evaluate the supervision received by the said overseas financial institution and the soundness and effectiveness of the anti-money laundering and anti-terrorism financing measures adopted by the said overseas financial institution, and specify in writing the duties for itself and the said overseas financial institution in respect of identifying its clients and preserving its clients' identities and its transaction records.
  ......
Please consent to the LexisNexis Terms and Conditions and Privacy Policy.