China's lawmakers have scrapped plans to hold developers,
lawyers, accountants, auctioneers and jewelers responsible for
criminal money laundering after objections from professional
organizations.
However, they have retained a provision in their revised
anti-money laundering bill to hold the "non-financial sector"
accountable for monitoring illicit cash flows alongside financial
institutions.
The previous draft listed property developers, law firms,
accounting firms, auction agents, and jewelers as businesses
subject to close financial supervision.
But lawmakers said the revision, which is under review, used the
broader term "non-financial sector" to broaden the law's scope.
The National Auction Committee had voiced opposition to the
bill, saying the auction sector was a less probable target for
money launderers than other sectors omitted from the first
draft.
"It is necessary to order sectors to improve monitoring, but the
law at this stage should avoid specific provisions as China lacks
experience on this issue," said Chen Shu, deputy head of the
All-China Lawyers' Association and a deputy to the National
People's Congress.
The revised version stipulates that practical rules will be set
at a later stage by law enforcement agencies and the State
Council.
"It is better that the revised draft leaves room for change at a
time that money laundering is occurring in more sectors and rapidly
increasing," said Miao Mancong, NPC deputy and manager of the
Changsha branch of the Bank of China in central China.
The bill, focusing on prevention and monitoring of money
laundering, requires institutions, especially banks, to set up
customer databases, to ascertain the exact sources and number of
capital transactions, and to report large and suspicious
transactions.
The national anti-money laundering organization, set up two years
ago, would be authorized to freeze suspicious accounts and
transactions with police and bank collaboration.
The bill was first submitted to the legislature in April and
aims to curb the upstream sources of illegal revenues, such as drug
trafficking, corruption, and gang activities.
(Xinhua News Agency August 25, 2006)