The State Administration of Foreign Exchange (SAFE) published on
Monday its detailed regulation on the management of large-volume
foreign exchange transactions in financial institutions.
The regulation, effective since October 12, was issued to
tighten the monitoring of suspicious foreign exchange transactions.
It adds a new weapon to the Chinese financial authorities' arsenal
in the war on money laundering.
The regulation provides detailed criteria for SAFE and public
security agencies to assess transactions and identify those that
are questionable. It sets out specific procedural rules to enable
financial institutions and other authorities to handle suspicious
cases more efficiently.
The regulation also clarifies the responsibilities of financial
institutions, directing them to improve internal control mechanisms
and assign specific groups or individuals to handle large-volume
forex business.
It requires that they obtain credit information on forex clients
and outlines their obligations in reporting and tracing suspected
crimes.
Large-volume forex transactions are 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.
(China Daily October 27, 2004)