Landmark legislation on anti-money laundering was approved by
China's top legislature yesterday and is scheduled to take effect
on January 1.
The Standing Committee of the National People's Congress widened
the definition of money laundering to include corruption and bribe
taking, violating financial management regulations and financial
fraud. Previously, the law identified only drug trafficking,
organized or terrorist crime and smuggling as money laundering.
Officials and analysts believed the ambit was too narrow and
called for stepped-up efforts to combat money laundering and stop
corrupt officials fleeing abroad with large amounts of illicit
money.
The law demands that financial and some non-financial
institutions maintain customer and transaction records and report
large and suspect transactions.
The People's Bank of China, the central bank, and its provincial
branch offices are authorized to investigate suspect fund
transfers.
According to the China Anti-Money Laundering Monitoring and
Analysis Centre, an office under the central bank set up in 2004,
683 suspected money laundering cases had been reported to the
police by the end of 2005. They involved 137.8 billion yuan
(US$17.2 billion) and US$1 billion.
The law, made as required by the United Nations Convention
Against Corruption, also pledges to step up co-ordination with
other countries to combat global money laundering and exchange
information with overseas anti-money laundering organizations.
"It is an important and essential step," said Zhang Xuechun, an
economist with the Asian Development Bank's Resident Mission in
China. "But how well it will be implemented depends on whether the
government can put together an efficient inter-department
co-ordination mechanism," he said.
Zhang Hongwei, director of the anti-money laundering department
of the Ministry of Public Security, said the law would facilitate
closer co-operation between police departments and financial
institutions.
The central bank last year transferred 2,790 suspected cases
involving 32.78 billion yuan (US$4.1 billion) to the police, and
the State Administration of Foreign Exchange also referred 405
cases involving US$1.24 billion, according to a central bank report
released in August.
Meanwhile, an amendment to the Organic Law of the People's
Courts was adopted, requiring all death sentences to be reviewed
and ratified by the Supreme People's Court.
Xiao Yang, president of the court, said the there would now be a
clear distinction between the review of a death sentence and an
appeal of the verdict. The former will be handled by the highest
court while the latter remains with provincial courts. "It will
give the defendants one more chance to have their opinions heard,"
Xiao said.
Chen Zhonglin, a law professor with Southwest University of
Political Science and Law, estimated that the number of death
sentences in China would drop by at least 20 percent after the
amendment of the law.
(China Daily November 1, 2006)