Anti-Money Laundering Law of the People's Republic of China

Anti-Money Laundering Law of the People's Republic of China

Order of the President [2006] No. 56

October 31, 2006

(Passed at the 24th Session of the Standing Committee of the 10th National People's Congress on October 31, 2006)

Contents
Chapter 1 General Provisions
Chapter 2 Supervision and Administration of Anti-Money Laundering
Chapter 3 Duties for Anti-Money Laundering of Financial Institutions
Chapter 4 Investigation on Anti-Money Laundering
Chapter 5 International Cooperation of Anti-Money Laundering
Chapter 6 Legal Liabilities
Chapter 7 Supplementary Provisions

Chapter I General Provisions

Article 1 This Law is formulated for the purposes of preventing money laundering activities, maintaining the financial order, and restraining the crime of money laundering and related crimes.

Article 2 The "anti-money laundering" herein refers to the adoption of the corresponding measures in compliance with the provisions of this Law for preventing the money laundering activities in concealing and covering up by various means the source and nature of the proceeds and revenues from such crimes as drug-related crimes, crimes committed by organized criminal gangs, crimes of terrorism, crimes of smuggling, bribery and corruption crimes, crimes of disrupting the order of financial management and crimes of financial frauds.

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, perform their anti-money laundering obligation by adopting preventive and monitoring measures and establishing sound systems for distinguishing clients' identities, and 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.

Article 4 The competent administrative authority of anti-money laundering under the State Council shall be responsible for the supervisory administration of anti-money laundering throughout the country, and the relevant departments and organs of the State Council shall perform their regulatory functions within the scope of their respective functions.
The competent administrative authority of anti-money laundering and the relevant departments and organs of the State Council and the judicial organs shall coordinate with each other in carrying out the work of anti-money laundering.

Article 5 The client ID data and transaction information acquired through performing the functions and duties of anti-money laundering according to law shall be kept confidential, which shall not be provided to any unit or individual unless otherwise prescribed by law.
The competent administrative authority of anti-money laundering and other departments and organs with the regulatory functions of anti-money laundering according to law may use the client ID data and transaction information acquired by performing their functions of anti-money laundering only for the purposes of administrative investigations on anti-money laundering.
The judicial organs may use the client ID data and transaction information acquired according to law only for the criminal proceedings of anti-money laundering.

Article 6 The institutions and their workers that perform the duties of anti-money laundering shall submit the reporting on big-sum transactions and doubtful transactions by force of law, which is protected by law.

Article 7 Any unit or individual that finds money laundering activities is entitled to report the same to the competent administrative authority of anti-money laundering or judicial organ, and the organs that accept the report shall keep confidential the reporter and the content reported.

Chapter II Supervision and Administration of Anti-Money Laundering

Article 8 The competent administrative authority of anti-money laundering under the State Council shall organize and coordinate the anti-money laundering works of the country, take charge of the fund monitoring of anti-money laundering, formulate independently or jointly with the relevant financial regulatory agencies of the State Council the regulations of financial institutions on anti-money laundering, supervise and examine the performance by financial institutions of their duties of anti-money laundering, investigate on any doubtful transactions within the scope of its functions and perform other functions relating to anti-money laundering as prescribed by law and the provisions of the State Council.
The designated offices of the competent administrative authority of anti-money laundering under the State Council shall within the scope of its authorization supervise and examine the performance by financial institutions of their duties of anti-money laundering.

Article 9 The relevant financial regulatory agencies of the State Council shall participate in the formulation of the regulations on anti-money laundering of the financial institutions under their supervisory administration, put forth the requirements for such financial institutions to establish and perfect the internal control system of anti-money laundering, and perform other functions relating to anti-money laundering as prescribed by law and provisions of the State Council.

Article 10 The competent administrative authority of anti-money laundering under the State Council shall set up the information center on anti-money laundering, and shall take charge of the capture and analysis on the report of big-sum transactions and doubtful transactions, provide the competent administrative authority of anti-money laundering under the State Council with the results of such analysis, and perform other functions as specified by the competent administrative authority of anti-money laundering under the State Council.

Article 11 For the purposes of performing the functions of fund monitoring of anti-money laundering, the competent administrative authority of anti-money laundering under the State Council may acquire the necessary information from the relevant departments and organs of the State Council, and the relevant departments and organs of the State Council shall provide such information accordingly.
The competent administrative authority of anti-money laundering under the State Council shall regularly notify the relevant departments and organs of the State Council of its works of anti-money laundering.

Article 12 The Customs that finds the cash or bearer marketable securities carried by any individual across the Customs exceed the specific amount shall report the case to the competent administrative authority of anti-money laundering in a timely manner.
The criteria for the specific amount of reporting shall be specified by the competent administrative authority of anti-money laundering under the State Council jointly with the General Administration of Customs.

Article 13 The competent administrative authority of anti-money laundering under the State Council and other departments and organs subject to the statutory functions for supervisory administration of anti-money laundering that find any transaction suspected of the crime of money laundering shall promptly report the same to the investigation organs.

Article 14 When approving and examining the newly establishment of financial institutions or the additional establishment of branches by financial institutions, the relevant financial regulatory agencies of the State Council shall review and examine the schemes of the new establishments on the internal control system of anti-money laundering; and no approval shall be given to any application for the establishment that does not confirm to the provisions of this Law.

Chapter III Duties for Anti-money Laundering of Financial Institutions

Article 15 Financial institutions shall establish and complete the internal control system of anti-money laundering according to the provisions of this Law, and the principals of the financial institutions shall be responsible for the effective implementation of the internal control system of anti-money laundering.
Financial institutions shall set up special agencies in charge of anti-money laundering or designate internal agencies accountable for the anti-money laundering work.

Article 16 Financial institutions shall establish the client ID system according to the relevant provisions.
When establishing business relationship with clients, or providing clients with one-time financial services including cash remittance, cash conversion and acceptance and payment of notes above the specified amount, financial institutions shall request the clients to present their real and valid ID certificates or other supporting documents for check and registration.
In case the clients' businesses are commissioned to others, financial institutions shall check and register the ID certificates or other ID supporting documents of both the agent and the principal.
When establishing the business relationships of personal insurance and trust with the clients whereby the beneficiaries of the contract are the clients themselves, financial institutions shall also check and register the ID certificates or other ID supporting documents of the beneficiaries.
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