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| Regulators Closely Follow the Trail of Dirty Money |
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The authorities last year cracked down on more than 50 money-laundering cases involving more than 10 billion yuan (US$1.25 billion), the central bank said yesterday in a report. The release coincides with the second reading of the draft anti-money laundering law by the Standing Committee of the National People's Congress. The law, the first of its kind in the country, is expected to plug the legal loopholes in anti-money laundering with clearer definitions of such activities and penalties. It will also help build an efficient regulatory structure to detect, monitor and prevent money laundering, experts said. The number of cases busted last year was the same as in 2004, but the amount involved was much higher two-and-a-half times the 4 billion yuan (US$500 million) then. Most of the cases unearthed last year were major crimes, the report said, adding they were mainly concentrated in coastal areas and provinces in the northeast and southwest, such as Yunnan, Shandong, Guangdong, Shanghai, Zhejiang and Heilongjiang. The People's Bank of China (PBC) also transferred 2,790 suspected cases involving 32.78 billion yuan (US$4.1 billion) to the police last year; as did the State Administration of Foreign Exchange, which referred 405 cases involving US$1.24 billion. The central bank report, which has been released for the second year running, also highlighted some challenges the country faces, citing specific cases to illustrate the channels, impact and trend of such illegal practices. A major channel is transactions through illegal money exchange vendors or underground banks, or qianzhuang as they are called in Chinese. Financial regulators joined hands with police to crack down on 47 illegal money changers and lenders last year and arrested 165 suspects, with money involved amounting up to 10 billion yuan (US$1.25 billion). As for the draft anti-money laundering law, a source close to the matter said if there were no major objections during the current debate, it is possible the draft is sent for a third reading this year before final approval. Xiang Junbo, vice-governor of PBC and head of its Most of the information on suspected dirty money is first submitted to the anti-money laundering monitoring and analysis center of the PBC. Apart from regular reports from commercial banks, rural credit co-operatives and other banking institutions, the public can also report on suspicious activities to the center. Last year, the center received 283,400 reports on suspicious renminbi funds and around 2 million suspicious foreign exchange transactions. Money laundering is already an offence under The State Council, It is mandatory for individuals to use their real names for opening deposit accounts. Apart from underground banking and illegal foreign exchange bureaus, money laundering cases mainly involve embezzlement of public funds, drug smuggling, and illegal lotteries. (
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