To further improve anti-money laundering (AML) supervision and practices, the People’s Bank of China (PBC) released the Measures for the Supervision of Anti-Money Laundering and Counter-Terrorist Financing of Financial Institutions (hereinafter referred to as the Measures), which shall take effect from August 1, 2021.
The release and implementation of the Measures is an important initiative to implement the arrangements made by the CPC Central Committee and the State Council on improving the systems and mechanisms of AML supervision and the AML practices in China, in a bid to guard against financial risks effectively. The Measures follows the principle of risk-based supervision and aims at further improving AML supervisory measures and enhancing supervisory efficiency. It stresses on adopting different AML supervisory measures based on the assessment of money laundering and terrorist financing (ML/TF) risks faced by financial institutions.
The Measures further specifies the AML requirements for financial institutions on internal control and risk management. In line with international practices, it requires financial institutions to conduct self-assessment of ML/TF risks, and establish internal control systems and corresponding risk management policies based on their risk profiles and business scales. In addition, the requirements on financial institutions’ organization, human resources support, information systems and auditing mechanisms for the purpose of AML are clarified. To prevent the AML supervisory risks arising out of overseas branches of financial institutions, the Measures also sets out requirements for the management of overseas branches.
Based on the current conditions of China’s financial development and considering the demands of forestalling and defusing major financial risks, the Measures complements the scope of obliged entities by applying the provisions to non-banking payment institutions that have already been enlisted in relevant AML normative documents, and by including online micro-credit companies and wealth management subsidiaries of banks as obliged AML entities.
In the next step, the PBC will carry on with the implementation of the Measures and urge financial institutions to keep improving their AML practices. The PBC and its branches will perform AML duties in a regulated way to ensure effective ML/TF risk prevention in China.
