China has been intensifying efforts to combat illegal dealing in foreign exchange and ban marketplaces from such illegal trading, in a bid to rectify the order of foreign exchange trading in the country.
A circular jointly issued on Tuesday by the State Administration for Foreign Exchange (SAFE) and the Ministry of Public Security urged foreign exchange administrative departments and public security forces at all levels to cooperate closely in cracking down on illegal trading in foreign exchange, rectifying and standardizing the market economic order.
Emphasis in the near term will be placed on shutting down black marketplaces trading in foreign exchange, and destroying a group of illegal traders' dens and underground banking houses.
In particular, banks designated to trade in foreign exchange are required to check their business outlets and foreign exchange centers, and the banks' efforts will undergo strict supervision. Banks and their staff found to be engaged in illegal trading of foreign exchange will be punished severely.
Illegal trading in foreign exchange has been somewhat curtailed in recent years as China has stepped up efforts to fight against smuggling and fraud in export tax rebates while relaxing control over foreign exchange individuals need for personal purposes.
But black dens and underground banking houses engaged in illegal foreign exchange trading still exist and provide people with foreign exchange capital for such criminal activities as smuggling, fraud in export rebates and money laundering.
The circular reiterated that criminal punishments will be given to those people who deal in foreign exchange outside designated foreign exchange banks or the China foreign exchange trading center and its branches, with the volume of conversion exceeding US$200,000 or the illegal gains exceeding 50,000 yuan (US$6,024.1).
Administrative penalties will also be given to those who are engaged in illegal trading of foreign exchange with smaller conversion volumes or lesser gains from doing so.
Those who reject or hinder state workers' inspections and investigations on activities related to illegal foreign exchange trading will be dealt with by public security organizations, said the circular.
(China Daily 09/06/2001)
