CHINA / National

Anti-money laundering bill widens net
By Sun Shangwu (China Daily)
Updated: 2006-04-26 06:25

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.
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