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RETAIL BANKING | Staff Reporter, China
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China secretly issues tougher anti-money laundering rules

Banks to rate their clients' risk of criminal conduct starting December 2015.

Sources said the People's Bank of China, the central bank, issued the new anti-money laundering rules to banks and financial institutions in December. Among others, it requires banks to rate clients' risks based on their location and the nature of their businesses, including their levels of transparency.

The rules were not publicly announced. Banks and insurance firms have to implement them by December 2015.

Sources said said the changes are intended to change the method of regulation since existing regulations are very cumbersome, and improve monitoring efficiency.

Financial institutions must now identify their riskiest clients and exercise discretion when reporting suspect deals. Currently, clients are rated against a checklist of money laundering traits without differentiating risk levels. That led financial institutions to flood authorities with information and false leads that impeded checks.

 

 

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