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China released a detailed regulation on the management of large-volume foreign exchange transactions in financial institutions Monday.
The regulation, published on the website of the State Administration of Foreign Exchange yesterday and effective since October 12, is aimed at tightening the monitoring of suspicious foreign exchange transactions. The rule also adds a new weapon to the Chinese financial authorities' arsenal in the anti-money laundering war.
The regulation sets detailed criteria for the foreign exchange watchdog and the public security agency to judge whether a transaction should be reported, and if it demands close attention. It also provides for suspected money laundering cases to be dealt with efficiently.
The regulation also clarifies the liabilities of relevant financial institutions on the matter as well as the procedure for handling reports.
It says that financial institutions should improve their internal control mechanisms against money laundering and appoint special agencies or individuals to look after the matter.
The institutions should try to get sufficient information of the credit status of the clients in foreign exchange business, and implement their obligations in reporting and tracing suspected crimes.
Large-volume foreign exchange transactions refer to daily cash transactions of US$10,000 or more by an individual or an enterprise, as well as non-cash daily transactions that are worth US$100,000 or more by an individual or US$500,000 or more by an enterprise, the rules said.
But exceptions will be allowed in certain cases, when such transactions do not need to be reported.
(China Daily October 26, 2004)
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