China Revamps AML Law, Targets Crypto Crimes

Spread the love

China is set to implement major revisions to its Anti-Money Laundering Law by 2025, marking the first major overhaul since 2007. The amendments focus on the inclusion of cryptocurrency transactions to combat the growing crypto-related money laundering crimes.

China is preparing to overhaul its anti-money laundering (AML) laws, with a significant focus on cryptocurrency transactions. The move, which must be passed by 2025, represents the first major amendment to the country’s AML laws since their inception in 2007. The urgency of this reform was highlighted at a recent meeting of the State Council’s Executive Council, chaired by Premier Li Qiang, signaling the government’s increased focus on combating anti-trafficking crypto money laundering.

The revision of the Anti-Money Laundering Law of the People’s Republic of China was originally proposed in 2021 and is part of the legislative work plan for 2023. It aims to tackle the increasingly complex landscape of financial crimes, especially those , involving virtual assets. Legal experts have expressed concern about challenges in formulating regulations around crypto transactions, noting the draft’s ambiguity due to the lack of a clear definition of virtual assets. This lack of clarity creates difficulties in establishing operational guidelines for law enforcement and judicial authorities, potentially creating gray areas in combating the use of cryptocurrencies in money laundering activities.

The key changes in the amended Anti-Money Laundering Act include a broader definition of money laundering activities, covering any attempt to hide or conceal the proceeds of crime and their sources. The Act also extends AML obligations to non-financial entities such as property developers, accounting firms and precious metals exchanges. It also imposes anti-money laundering responsibilities on all individuals and organizations, requiring them to report large cash transactions and adopt special preventive measures against listed targets involved in terrorism or money laundering.

Importantly, the amended law also introduces higher penalties for AML violations, with fines of up to CNY 200,000 for failure to comply with special preventive measures. The law also establishes reciprocal requirements for international anti-money laundering cooperation by restricting Chinese financial institutions from executing foreign orders involving the seizure or transfer of assets without government approval.

ALSO READ  German Crypto Firm USI Tech Founder Charged in $150 Million Fraud Scheme

This legislative move is in response to the global trend of digital currencies and associated money laundering risks. China’s approach shows a commitment to aligning with international practices and establishing a risk-based approach to AML/CTF efforts. However, the draft law may undergo changes before finalization.

Image source: Shutterstock

Leave a Comment