Landmark legislation on anti-money laundering and death
sentences was approved by China's top legislature yesterday and is
scheduled to take effect on January 1.
The Standing Committee of the National People's Congress widened the
definition of money laundering to include corruption and graft,
violating financial management regulations and financial fraud.
Previously, the law identified only drug trafficking, organized
or terrorist crime and smuggling as money laundering. This had led
to criticism from analysts, calling the law's remit too narrow as
efforts were ramped up to fight corruption across China.
The law demands that financial and some non-financial
institutions maintain customer and transaction records and report
any large transactions, believed to be suspect.
The People's Bank of China, the country's central bank, and its
provincial branch offices are authorized to investigate suspect
fund transfers.
According to the China Anti-Money Laundering Monitoring and
Analysis Center, set up in 2004, 683 suspected money laundering
cases had been reported to police by the end of 2005. They involved
137.8 billion yuan (US$17.2 billion) and US$1 billion in funds.
The law, drafted as required by the United Nations Convention
Against Corruption, also pledges to step up international
coordination to combat global money laundering and exchange
information with overseas anti-money laundering organizations.
"It is an important and essential step," said Zhang Xuechun, an
economist with the Asian Development Bank's Resident Mission in
China. "But how well it will be implemented depends on whether the
government can put together an efficient inter-department
coordination mechanism," he said.
Zhang Hongwei, director of the anti-money laundering department
of the Ministry of Public Security, said the law would enhance
cooperation between police departments and financial
institutions.
The central bank last year transferred 2,790 suspected cases
involving 32.78 billion yuan (US$4.1 billion) to the police, and
the State Administration of Foreign Exchange also referred 405
cases involving US$1.24 billion, according to a central bank report
released in August.
Meanwhile, an amendment to the Organic Law of the People's
Courts was adopted, requiring all death sentences to be reviewed
and ratified by the Supreme People's Court, thus removing the right
of provincial courts to pass the death sentence without
supervision, a practice that had led to accusations of miscarriages
of justice. .
Xiao Yang, president of the court, said that
there would now be a clear distinction between the review of a
death sentence and a verdict appeal. The former will be handled by
the highest court while the latter remains within the remit
provincial courts.
"It will give the defendants one more chance to have their
opinions heard," Xiao said.
Chen Zhonglin, a law professor with the Southwest University of
Political Science and Law, estimated that the number of death
sentences in China would drop by at least 20 percent after the
amendment of the law.
(Xinhua News Agency, China Daily October 31,
2006)