China

New Documents

The Organisation for Economic Co-operation and Development announced that China submitted its approved Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting Convention.

The Hong Kong Monetary Authority issued a discussion paper inviting comments from the public and industry leaders on key policy and design issues related to introducing retail central bank digital currency, or e-HKD.

Enforcement Actions

The Securities and Futures Commission fined the Hong Kong-based commodities dealer for its failure to conduct adequate due diligence on systems used by 19 clients for placing orders, thereby failing to properly assess and mitigate the risks associated with the technologies.

The Securities and Future Commission of Hong Kong imposed a HK$ 5 million monetary penalty on the futures company for know your customer violations that occurred from May 2017 until July 2018.


Important Facts

  • The U.S. State Department labels China as a major money laundering country. The main sources of criminal proceeds include corruption, drug and human trafficking, smuggling, economic crimes, intellectual property theft, counterfeit goods, crimes against property, and tax evasion. Common methods laundering are bulk cash smuggling, trade based money laundering, the use of shell companies, invoice manipulation, high-value asset purchases, investing illicit funds in lawful sectors, gaming, and exploiting formal and underground financial systems and third- party payment systems.  Chinese authorities have also identified illegal fundraising activities, cross-border telecommunications fraud, weapons of mass destruction proliferation finance and other illicit finance activity linked to North Korea. In 2020, China increased regulatory scrutiny of the financial sector and made improvements to its anti-money laundering framework, though serious transparency issues remain, particularly in the context of international cooperation.  China has comprehensive know-your-customer and suspicious transaction reporting regulations that require financial institutions to determine and monitor the risk levels of customers and accounts, including foreign politically exposed persons.
-Source: 2021 International Narcotics Control Strategy Report (INCSR)

Rankings

FATF i | 2013 Methodology

Technical Effectiveness
Compliant : 9 High : 0
Largely Compliant : 22 Substantial : 3
Partially Compliant : 3 Moderate : 4
Non-Compliant : 6 Low : 4

Pakistan's technical compliance was re-rated in a Oct. 6, 2021 follow-up report

BASEL i

Rank : 94/110
Score : 6.7/10

TRANSPARENCY INTERNATIONAL i

Rank : 78/179
Score : 42/100

Tax Justice Network i

Rank : 25/133
Score : 60/100