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Combatting Illicit Flows: China Reinforces AML Law

A Report by CYS Global Remit Legal & Compliance Office 



Exciting developments are unfolding in China! Significant revisions to the country’s anti-money laundering legislation are in progress, reflecting its commitment to combat illicit capital flows in the world’s second-largest economy. These revisions not only aim to bolster the security of China’s financial system but also uphold its global standing. 


Recently, China’s legislative body examined a fresh draft of the law—the first overhaul since its inception in 2007—and is now seeking public input until May 25th. 


China grapples with emerging technologies that complicate anti-money laundering efforts, particularly with cryptocurrencies and other virtual fintech assets blurring fund origins. 

To confront these challenges, the new draft law, now expanded to 62 articles from the prior 37, offers comprehensive guidelines for institutions, intensifies scrutiny, and imposes stricter penalties for non-compliance. 


Financial institutions are mandated to closely monitor risks associated with "the use of new technologies and products”, recognizing virtual assets as favoured tools for money laundering, presenting a critical challenge. 


According to data from the Supreme People’s Procuratorate, the number of individuals prosecuted for money laundering in China has surged annually since 2020, reaching 2,971 in 2023 from 707 in 2020. In early 2022, China launched a three-year campaign against money laundering, stressing the imperative of national security protection. 


Keep an eye on CYS Insights for further updates on this pivotal fusion of finance and law enforcement! 

 



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