The authorities last year cracked down on more than 50 money-laundering cases
involving more than 10 billion yuan (US$1.25 billion), the central bank said
yesterday in a report.
The release coincides with the second reading of the draft anti-money
laundering law by the Standing Committee of the National People's Congress.
Zhou Zhengqing, a
member of the Standing Committee of the National People's Congress,
deliberate the anti-money laundering bill in Beijing August 24, 2006.
[Xinhua] |
The law, the first of its kind in the country, is expected to plug the legal
loopholes in anti-money laundering with clearer definitions of such activities
and penalties.
It will also help build an efficient regulatory structure to detect, monitor
and prevent money laundering, experts said.
The number of cases busted last year was the same as in 2004, but the amount
involved was much higher two-and-a-half times the 4 billion yuan (US$500
million) then.
Most of the cases unearthed last year were major crimes, the report said,
adding they were mainly concentrated in coastal areas and provinces in the
northeast and southwest, such as Yunnan, Shandong, Guangdong, Shanghai, Zhejiang
and Heilongjiang.
The People's Bank of China (PBOC) also transferred 2,790 suspected cases
involving 32.78 billion yuan (US$4.1 billion) to the police last year; as did
the State Administration of Foreign Exchange, which referred 405 cases involving
US$1.24 billion.
The central bank report, which has been released for the second year running,
also highlighted some challenges the country faces, citing specific cases to
illustrate the channels, impact and trend of such illegal practices.
A major channel is transactions through illegal money exchange vendors or
underground banks, or qianzhuang as they are called in Chinese.
Financial regulators joined hands with police to crack down on 47 illegal
money changers and lenders last year and arrested 165 suspects, with money
involved amounting up to 10 billion yuan (US$1.25 billion).
As for the draft anti-money laundering law, a source close to the matter said
if there were no major objections during the current debate, it is possible the
draft is sent for a third reading this year before final approval.
Xiang Junbo, vice-governor of PBOC and head of its Shanghai headquarters,
said that in addition to the law, three anti-money laundering regulations
targeting the banking, securities and futures, and insurance sectors will be
released in the second half of the year expanding the fight to the latter two
sectors.
Most of the information on suspected dirty money is first submitted to the
anti-money laundering monitoring and analysis centre of the PBOC. Apart from
regular reports from commercial banks, rural credit co-operatives and other
banking institutions, the public can also report on suspicious activities to the
centre.
Last year, the centre received 283,400 reports on suspicious renminbi funds
and around 2 million suspicious foreign exchange transactions.
Money laundering is already an offence under China's criminal law.
The State Council, China's cabinet, has also issued regulations governing
cash management, penalties for financial irregularities and illegal financial
organizations.
It is mandatory for individuals to use their real names for opening deposit
accounts.
Apart from underground banking and illegal foreign exchange bureaus, money
laundering cases mainly involve embezzlement of public funds, drug smuggling,
and illegal lotteries.
Growing menace
Last year, 50 money-laundering cases involving more than 10 billion yuan
(US$1.25 billion) were busted.
In 2004, the number of cases was roughly the same but the amount was much
lower, 4 billion yuan (US$500 million).
Most of the cases unearthed last year were major crimes, mainly concentrated
in coastal areas and provinces in the northeast and southwest.
The central bank transferred 2,790 suspected cases involving 32.78 billion
yuan (US$4.1 billion) to the police last year.
Authorities cracked down on 47 illegal money changers and lenders last year
and arrested 165 suspects, with money involved amounting up to 10 billion yuan
(US$1.25 billion).
