A few days ago, the draft amendment to the Anti-Money Laundering Law was submitted to the ninth meeting of the Standing Committee of the 14th National People's Congress for formal deliberation, and commissioned by the State Council, the Governor of the People's Bank of China, Mr. Pan Gongsheng, made a statement on the Anti-Money Laundering Law of the People's Republic of China (Draft Amendment) (hereinafter referred to as the “Draft Amendment”), which marked the first major amendment of the Anti-Money Laundering Law which has been in force since January 2007 This marks the first major revision of the Anti-Money Laundering Law, which has been in force since January 2007.
The Draft Amendment consists of 7 chapters and 62 articles, making major changes to the former Anti-Money Laundering Law, amending a large number of articles and changing the rules. The Draft Amendment is centered on clarifying the scope of application of the law, strengthening the supervision and management of anti-money laundering and improving the provisions on the obligations of anti-money laundering, as well as supplementing and perfecting the relevant system. Mr. Zhu Yonghui, Director of Beijing King&Capital Law Firm, was interviewed by the 21st Century Business Herald and briefly explained the amendments.
“If we summarize the changes of this draft amendment, I think the content of this amendment is characterized by broad, detailed and strict”, said Zhu Yonghui, Director of Beijing King&Capital Law Firm, to the reporter: ”Firstly, the content is broad, which is reflected in the content of the content of the financial institutions to increase the requirements of the risk management work, the inclusion of specific non-financial institutions to the subject of the obligation, optimize the content of the amendment, and the content is broad. Non-financial institutions into the main body of the obligation to optimize the anti-money laundering regulatory measures and tools. The second is the provisions of the fine, detailed administrative authority of the management authority and regulatory measures, the obligation of the subject of supervision requirements. Thirdly, the measures are strict, and the administrative penalties for money laundering in the revised draft have increased significantly.”
Regulatory philosophy from “rule-based” to “risk-based” transition
“Rules-based” and ‘risk-based’ is a set of relative anti-money laundering regulatory concept. Zhu Yonghui mentioned that requiring financial institutions to transition from “rule-based” to “risk-based” regulatory concepts, and institutionalizing and legalizing “risk-based” is an important part of this revision. It is an important content of this revision.
He said that “rules-based” means that regulators evaluate financial institutions according to common compliance principles and specific standards, focusing on formal compliance. However, in different regions, different types and different business realities, regulators have different regulatory points for financial institutions. The drawbacks of “check-the-box” formal compliance are becoming increasingly apparent.
“Risk-based compliance is the first of the Forty Recommendations of the Financial Action Task Force (FATF) of the International Organization Against Money Laundering (IOML), and has become an international anti-money laundering standard. The essence of the “risk-based” requirements is to analyze specific situations, formulate corresponding measures for different risks, and implement risk assessment into the supervision, obligation to perform the practice, so that the regulatory body to develop targeted regulatory requirements, financial institutions to take differentiated anti-money laundering measures, with the actual risk of matching procedures to manage and reduce the risk of money laundering. and reduce the risk of money laundering.
In the revised draft, the regulatory concept of “risk-based” has been implemented, which clearly carries out money laundering risk assessment, requires financial institutions not to take risk management measures that do not match the risk of money laundering, and should carry out customer due diligence based on risk and take corresponding measures, etc., all of which embody the “risk-based” regulatory requirements. The regulatory requirements of the “risk-based” approach.
And an important change in this revised draft highlights the specific non-financial industry into the anti-money laundering supervision of the main body, expanding the scope of the main body of the obligation.
Zhu Yonghui said, “in order to adapt to the new anti-money laundering situation, the draft amendment to the specific business under the non-financial institutions to take the ‘financial institutionization’ of the management, the requirements of its specific business in the provisions of the Act, should be reference to the financial institutions to carry out anti-money laundering obligations. The specific non-financial institution business included in the regulation this time has the commonality of large volume of fund transactions, and such business is more likely to generate money laundering risks in the process of change of ownership.”
Execution and punishment convergence to combat money laundering crimes
In the process of combating money laundering crimes, the Anti-Money Laundering Law and the Criminal Law serve as the role of prevention beforehand and combating afterwards. As a stand-alone law, the Anti-Money Laundering Law has strengthened administrative supervision in this amendment, making it clear that the administrative department in charge of anti-money laundering can take supervisory and inspection measures and carry out anti-money laundering investigations, so as to build up the most basic institutional framework for anti-money laundering. At the same time, the draft amendment also expands the concept of anti-money laundering, article 2 of the draft specifies that “disguising and concealing the source and nature of proceeds of crime and its proceeds through various means” and “terrorist financing activities” are money laundering activities.
Zhu Yonghui mentioned, “the revised draft will be anti-money laundering concept by seven types of predicate crimes to expand to all crimes, which is the escalation of money laundering techniques to actively respond to, but also reflects the money laundering behavior from the broader and more detailed and more stringent legislative guidance. In terms of the convergence of the implementation and punishment, the scope of administrative regulation in the draft amendment to the Anti-Money Laundering Law corresponds to Article 312 of the Criminal Law, 'the crime of concealing and concealing the proceeds of crime', and is no longer limited to Article 191 of the Criminal Law, 'the crime of money laundering'.”
The draft amendment will be “due diligence” as one of the anti-money laundering obligations, anti-money laundering obligations should be required to carry out anti-money laundering investigations of customers, in fact, anti-money laundering obligations to put forward higher requirements, if the anti-money laundering obligations to fail to fulfill the obligation of due diligence, it constitutes an administrative offense.
For the practice of money laundering crime, ZhuYongHui lawyer mentioned that should pay special attention to the money laundering act of complicity in the problem. “Money laundering behavior is a complex transaction behavior with multiple links, multiple transaction subject, multiple accounts, multiple frequency. In the process of combating money laundering crime, there is no lack of passive participation or unknowingly participate in the parties, such as the existence of the account will be lent to friends and relatives to use, or in order to earn dozens of dollars for the use of fees and lending to others to use the parties. Especially like college students, a category of young people, social inexperience, because of good intentions in the case of unknowingly transferred for the perpetrator of the account, and was recognized as an accomplice to the crime of money laundering.”
“If all with money laundering behavior related people, related accounts, related transactions, we are using a net way, then, is it because of the crackdown surface is too wide, and produce more miscarriage of justice?” Zhu Yonghui lawyer raised his concerns. “In the help of the letter of the crime of the proliferation of this foregone conclusion, I think that in the administrative penalties involving money laundering and money laundering crimes, adhere to the principle of subjective and objective elements of unity, not only to combat money laundering behavior, but also focus on the protection of individual interests.”
