Opinions of the General Office of the State Council on Improving the Regulatory Systems and Mechanisms for Fighting against Money Laundering, Terrorist financing and Tax Evasion

Opinions of the General Office of the State Council on Improving the Regulatory Systems and Mechanisms for Fighting against Money Laundering, Terrorist financing and Tax Evasion

Guo Ban Han [2017] No.84

August 29, 2017

All members of the Joint Inter-ministerial Meeting of the State Council for Fighting against Money Laundering,

The regulatory systems and mechanisms for fighting against money laundering, terrorist financing and tax evasion (hereinafter collectively referred to as the "Three Antis") are an important part of founding a rule of law system for the socialism with Chinese characteristics and setting up a modern financial supervision system. They are also a crucial safeguard to foster the modernization of national governance system and capability and maintain the security and stability of the economy and society. Besides, they are a vital means to have China participate in global governance and expand the two-way opening of the finance sector. Since the Anti-Money Laundering Law was published and implemented, China has made giant strides in establishing the "Three Antis" regulatory systems and mechanisms, making remarkable achievements and basically having them aligned with international common standards. Meanwhile, we have to acknowledge that there have been some prominent contradictions and issues in the relevant fields, mainly the incomplete regulatory system, unsmooth coordination and cooperation system, insufficiency in sharing data information between departments, incapacities of the organizations that shall perform obligations of anti-money laundering (hereinafter referred to as the "anti-money laundering organizations"), ill-matched international participation and voice with China's international standing. In order to deeply and consistently advance the construction of the "Three Antis" regulatory systems and mechanisms and improve regulatory measures for the "Three Antis" purpose, the following opinions are hereby rendered upon approval of the State Council.

I.General Requirements
1. Guiding Ideology
Guided by Deng Xiaoping Theory, the important thought of "Three Represents" and the Scientific Outlook on Development, we shall fully implement the guidelines of the 18th National Congress of the Communist Party of China ("CPC") and those of the third through sixth plenary sessions of the 18th CPC Central Committee, implement the important principles of General Secretary Xi Jinping's major addresses and his new vision, thinking and strategies for China's governance, seriously put into practice the decisions and arrangements of the CPC Central Committee and the State Council, stick to the overall national security outlook, comply with the requirements on advancing the modernization of China's governance system and capability, and improve the "Three Antis" regulatory systems and mechanisms.
2. Basic Principles
Adhering to the problem orientation and maximizing effects of collaboration. Further emancipating the minds and starting from basic national conditions and needs of actual work, we shall make in-depth studies into and effectively tackle problems existing in the "Three Antis" regulatory systems and mechanisms. Competent administrative departments of anti-money laundering, tax authorities and public security organs shall earnestly perform their respective duties, while the regulators of the banking sector, securities sector and insurance sector under the State Council and other related entities shall motivate themselves to form joint forces through collaboration in the "Three Antis" field. We will also explore ways of establishing the "Three Antis" regulatory systems and mechanisms that are tied by finance intelligence, conducted by monitoring the capital, based on the sharing of data and information, and suit needs of national governance.
Firmly remaining prevention and control oriented and effectively resolving risks. We shall launch a comprehensive and scientific risk assessment, further better the allocation of regulation resources according to the levels and distribution of risks, and strengthen supervision of high-risk areas. Meanwhile, we shall constantly optimize the risk assessment mechanism and the risk monitoring and analysis system and improve the risk prevention system to effectively avoid risks of money laundering, terrorist financing and tax evasion.
Resolutely basing on the national situations and providing guarantee for services offered to the two-way opening-up. According to the actual situations of money laundering, terrorist financing and tax evasion in China, legal systems and regulatory rules of "Three Antis" shall be gradually established and improved. International cooperation shall be conducted according to the relevant international treaties or under the principle of equality and mutual benefits. We shall also faithfully perform the international duties that China shall assume, strictly implement international standards, and reinforce cooperation in cross-border regulation, in order to practically safeguard the legal rights and interests of China's financial institutions and secure the two-way opening-up in the finance sector.
Insisting in law-based administration and giving full play to the principal role of organizations obligated to anti-money laundering. Duties of the relevant entities shall be determined according to the law to make sure each performs its own functions and takes its own initiative to control risks. We shall also attach importance to and give full play to the role of organizations obligated to anti-money laundering as the "first line of defense" in preventing money laundering, terrorist financing and tax evasion.
3. Objectives
By 2020, the "Three Antis" legal system which adapts to requirements of the socialist market economy, suits for China's national conditions and complies with international standards will be preliminarily formed, while the coordination and cooperation mechanism, with distinct duties, rights being equal to responsibilities, and robust collaboration, for "Three Antis" regulation will be established, in an effort to effectively prevent and control risks of money laundering, terrorist financing and tax evasion.

II.Optimizing the Work Mechanism
4. Strengthening overall coordination and improving the organization mechanism. The joint inter-ministerial meeting system for anti-money laundering departments will be further improved to plan the "Three Antis" regulation as a whole. Rely on the joint inter-ministerial meeting for anti-money laundering departments, we shall also reinforce the mechanism of organizing and coordinating the "Three Antis" work between departments, stipulate overall strategies, important policies and measures, advance the implementation thereof, guide the international cooperation in the "Three Antis" area and intensify the regulatory cooperation.
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