Article 1 These rules are formulated in line with the Law of the People's Republic of China on the People's Bank of China and other relevant laws, administrative rules and regulations to combat money laundering by criminals so as to safeguard the healthy operation of the financial industry.
Article 2 These rules are applicable to all financial institutions involved in combating money laundering. Financial institutions hereunder refer to institutions legally established and engaged in financial business within the territory of the People's Republic of China, including policy banks, commercial banks, credit cooperatives, postal savings institutions, finance companies, trust and investment companies, financial leasing companies and foreign-funded financial institutions etc.
Article 3 Money laundering in these rules refers to any action that legalize the ill-gotten income and yields generated from criminal activities like drug trafficking, gang violence, terrorist act, smuggling or other crimes through various means in which the source and origin of such income and yields are disguised.
Article 4 Financial institutions and their employees shall abide by these rules to fulfill their due obligation to combat money laundering activities in real earnest and identify suspicious transactions on a prudent basis, and shall not engage in any unfair competition that may run counter to their anti-money laundering obligations.
Article 5 Financial institutions and their employees shall abide by relevant rules and regulations to and refrain from disclosing any information on anti-money laundering activities to their customers and/or other personnel.
Article 6 Financial institutions shall assist the judiciary and/or law enforcement departments including the customs and taxation authorities in combating money laundering in accordance to relevant laws and regulations through making inquiry of, freezing or suspending the transfer of suspicious customers' deposits. Overseas branch offices of the Chinese financial institutions shall abide by anti-money laundering laws and regulations of their host countries or regions and provide assistance to departments involved in anti-money laundering operation in these countries or regions.
Article 7 The People's Bank of China is the supervisory authority for anti-money laundering operation by financial institutions.
The People's Bank of China shall establish a leading group supervising the work of anti-money laundering by the financial institutions, which shall perform the following responsibilities:
(1) Supervising and coordinating anti-money laundering activities of financial institutions;
(2) Conducting research and formulating strategies, working plans and policies on anti-money laundering for financial institutions, establishing working mechanisms for anti-money laundering operation and reporting system for large-value and/or suspicious renminbi fund transactions;
(3) Establishing a monitoring system to scrutinize payment transactions;
(4) Working out proper solutions to major difficulties encountered by financial institutions in combating money laundering;
(5) Participating in international anti-money laundering cooperation and providing guidance for international exchange in the areas of anti-money laundering by financial institutions; and
(6) Other anti-money laundering functions of the People's Bank of China.
The Sate Administration of Foreign Exchange is responsible for supervising reporting of large-value and/or suspicious foreign exchange transactions and shall establish a reporting arrangement to monitor such transactions.
Article 8 Financial institutions shall establish and improve their internal anti-money laundering mechanisms and report such mechanisms to the People's Bank of China for record as required by the People's Bank of China.
Article 9 Financial institutions shall establish or designate relevant internal departments to specialize in anti-money laundering efforts and equip these departments with managers and working staff as needed.
Pursuant to concrete needs, financial institutions shall establish relevant departments or designate certain personnel in their branch offices to specialize in anti-money laundering activities, and shall conduct supervision over implementation of these rules and establishment of internal anti-money laundering mechanisms in their branch offices. Effective anti-money laundering measures shall be made when new financial institutions are incorporated or financial institutions set up new branch offices.
Article 10 Financial institutions shall establish a customers' identity registry system to verify the identities of customers who process financial business including deposits and settlement with them.
Financial institutions shall not be allowed to open anonymous accounts or accounts in obviously fictitious names for their customers, and/or provide financial services including deposits and settlement for customers whose identities are yet to be clarified.
Article 11 When opening deposit accounts or providing settlement service for individual customers, financial institutions shall verify the customers' IDs and record the names and ID numbers. If a customer is represented by another person to open personal deposit account with a financial institution, the financial institution shall verify both the representative's and principal's IDs and record the names and ID numbers thereof.
Financial institutions shall not open deposit accounts for customers who decline to show IDs or do not use names appeared in their IDs.
Article 12 When opening accounts or providing financial services including deposits and settlement for institutional customers, financial institutions shall abide by relevant rules of the People's Bank of China and ask the customers to show valid documents for verification and recording.
Financial institutions shall not provide financial services including deposits and settlement for institutional customers who fail to show valid documents as required by relevant rules.
Article 13 Financial institutions shall abide by relevant rules and report to the People's Bank of China and/or the State Administration of Foreign Exchange of any large-value transactions detected in the process of providing financial services to customers.
Classification of large-value transactions shall be determined in line with relevant rules made by the People's Bank of China and the State Administration of Foreign Exchange on reporting of fund transactions.
Article 14 Financial institutions shall abide by relevant rules and report to the People's Bank of China and/or the State Administration of Foreign Exchange of any suspicious transactions detected in the process of providing financial services to customers.
Reporting of suspicious transactions shall be determined in line with relevant rules made by the People's Bank of China and the State Administration of Foreign Exchange on reporting of fund transactions.
Article 15 Branch offices of financial institutions shall report large-value and/or suspicious transactions to the local branch offices of the People's Bank of China or the State Administration of Foreign Exchange in line with relevant rules made by the People's Bank of China and the State Administration of Foreign Exchange on procedures of reporting of fund transactions, and at the same time keep their superior units informed of such transactions.
Article 16 Financial institutions shall carry out examination and analysis on large-value and/or suspicious transactions, and shall report to the local public security departments if criminal activities are detected.
Article 17 Financial institutions shall keep records on account information and transaction records of the customers in accordance with the following prescription:
(1) Records of account information shall be kept for five years at minimum from the date of closing the account;
(2) Transaction records shall be kept for five years at minimum from the date of booking the transaction.
Transaction records in item (2) include information on the ownership of the account, amount of deposit or withdrawal effected through the account, time of transaction, source and destination of funds and the means of fund transfer etc. Account information and transaction records shall be kept in line with relevant state rules on management of accounting files.
Article 18 The People's Bank of China or the State Administration of Foreign Exchange shall hand over the report and other related materials on large-value and/or suspicious transactions submitted by financial institutions to the judiciary departments in accordance with procedures laid by the Rules for Administrative Departments in Transferring Suspected Criminal Cases if criminal activities are suspected after conducting review of such report and related materials, and shall not disclose contents of the report to the customers of the financial institutions and other people.
Article 19 The People's Bank of China shall provide guidance and organize training activities on the subject of anti-money laundering for financial institutions.
Financial institutions shall launch anti-money laundering publicity among their customers and provide training for their staff on anti-money laundering so as to familiarize them with laws, administrative rule and regulations on anti-money laundering and strengthen their competence in combating money laundering activities.
Article 20 The People's Bank of China shall issue a warning to and order a financial institution committing any of the following irregularities in violation of these rules to take remedial actions within a specified period of time, and if the financial institution fails to make corrections within the specified period of time, a fine of no more than RMB30,000 yuan may be imposed and its senior executives immediately accountable for such misconduct may be disqualified from holding any positions in the financial industry if the circumstances are serious:
(1) failing to establish an internal anti-money laundering mechanism as required;
(2) failing to establish or designate relevant departments to specialize in anti-money laundering efforts as required;
(3) failing to ask institutional customers to show valid documents and other related materials for verification and recording as required;
(4) failing to keep account information and transaction records of customers as required;
(5) leaking anti-money laundering information to customers and other people in violation of rules; or
(6) failing to report to the authorities of large-value and/or suspicious transactions as required.
Article 21 When a financial institution engaged in foreign exchange operation fails to report on a timely basis to authorities of abnormal foreign exchange transactions such as purchase of foreign exchange in large value and/or high frequency and move of large amount of foreign currency cash in and out of account, it shall be penalized in line with Article 25 of the Rules on Penalizing Financial Irregularities.
Article 22 Where a financial institution, in violation of relevant laws and administrative rules and regulations, engages in unfair competition which hampers the fulfillment of its anti-money laundering obligation, it shall be penalized in line with relevant provisions of the Rules on Penalizing Financial Irregularities. A disciplinary warning shall be issued for its staff held immediately accountable for such misconduct and the senior executives directly responsible for the misconduct shall be disqualified from holding any positions in the financial industry if the circumstances are serious.
Article 23 Where a financial institution opens accounts for customers who have declined to show their personal IDs or use the names appeared in the personal IDs in opening bank accounts, the People's Bank of China shall give it a warning and impose concurrently a fine of not less than RMB1000 yuan but not more than RMB5000 yuan. If the circumstances are serious, its senior executives held immediately accountable for such misconduct shall be disqualified from holding any positions in the financial industry.
Article 24 The China's Association of Banks, China's Association of Finance Companies and other self-regulatory organizations in the financial industry may formulate their own anti-money laundering work guidance in line with these rules.
Article 25 These rules shall enter into force on March 1, 2003. Promulgated by The People's Bank of China on 2003-1-3
