A draft bill to combat money laundering widens the scope of the proposed law
from financial institutions to realtors, law and accounting firms and jewellers.
The draft law on anti-money laundering, which was yesterday submitted to the
Standing Committee of the National People's Congress (NPC) for examination, says
financial as well as non-financial organizations should shoulder the
responsibility of "controlling and monitoring."
Money laundering refers to the practice of moving illegally acquired cash
through financial and other systems so that it appears to be legally acquired.
Financial institutions such as banks, insurers, and securities and futures
firms are usually considered the frontline in the war against illicit money
movements. But the draft law aims to choke off as many channels as possible to
fight the scourge and associated crimes such as smuggling, drug trafficking and
bribery.
The draft law stipulates that real-estate, law, accountancy, pawnshop and
jewellery firms establish mechanisms to combat money laundering and professional
training provided to their staff.
They are also required to establish the identities of customers, ascertain
the exact source of capital and probe the true purpose of transactions. Large
and suspicious transactions have to be reported to the anti-money laundering
monitoring centre set up two years ago.
Yi Xianrong, a finance researcher with the Chinese Academy of Social
Sciences, told China Daily yesterday that the stipulations would add more teeth
to the law because they cover almost all possible sectors which could involve
money laundering.
All companies, no matter their business, should monitor and stop money
laundering, said Yi.
An important function of the draft law is to "cut financing channels for
terrorists" in the country, said Feng Shuping, deputy director of the Budgetary
Work Commission of the NPC Standing Committee.
While the draft law focuses on monitoring and preventing money laundering,
the penalties will be spelt out in the Criminal Law, Feng said.
The draft law also covers international co-operation in fighting the menace
significant against the backdrop of several cases of officials embezzling and
laundering money overseas.