China

New Documents

The Financial Action Task Force published a second enhanced follow-up report on China’s anti-money laundering and counterterrorist financing framework, highlighting that the country’s progress resulting in technical compliance re-ratings on six Recommendations.

The Hong Kong Monetary Authority circulated its observations following the regulator’s anti-money laundering and counterterrorist financing thematic review of stored value facility licensees.

News

Enforcement Actions

The Securities and Futures Commission issued a disciplinary action against the Hong Kong-based subsidiary of The Goldman Sachs Group, Inc., requiring it to pay a $350 million fine for serious supervisory, risk, compliance and anti-money laundering controls deficiencies.

The Hong Kong Securities and Futures Commission issued an order banning Joanna Chu Lai Wa, former director and responsible officer of Shenzhen, China-based Guosen Securities (HK) Brokerage Company, Limited for her failure to implement adequate AML/CTF controls.


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 : 18/141
Score : 6.76/10

TRANSPARENCY INTERNATIONAL i

Rank : 78/179
Score : 42/100

Tax Justice Network i

Rank : 25/133
Score : 60/100