In order to cause financial institutions to effectively fulfill their anti-money laundering and anti-terrorist financing obligations and regulate the supervision and administration of anti-money laundering and anti-terrorist financing, the People’s Bank of China formulated the Measures for the Supervision and Administration of Anti-Money Laundering and Anti-Terrorist Financing (the “Measures”) in accordance with the Anti-Money Laundering Law of the People’s Republic of China, the Banking Law of the People’s Republic of China and the Anti-Terrorism Law of the People’s Republic of China.
1. The Measures specifying the subject of jurisdiction.
The Measures apply to the following financial institutions established in the People’s Republic of China: (1) developmental financial institutions, policy banks, commercial banks, rural cooperative banks, rural credit cooperatives, and village banks; (2) securities companies, futures companies, and securities investment fund management companies; (3) insurance companies and insurance asset management companies; (4) trust companies, financial asset management companies, enterprise group finance companies, financial leasing companies, auto finance companies, consumer finance companies, currency brokers, loan companies, and wealth management subsidiaries of banks; (5) other financial institutions to perform anti-money laundering and anti-terrorist financing obligations as determined and announced by the People’s Bank of China. In addition, non-banking payment institutions, bank card clearing institutions, fund clearing centers, network microfinance companies, and institutions engaging in foreign exchange, fund sales, professional insurance agency and insurance brokerage business are governed by the financial institution supervision and administration provisions of the Measures.
2. These Measures provide for the internal control and risk management of financial institutions in their anti-money laundering and anti-terrorist financing work
Financial institutions shall establish a sound internal control system for anti-money laundering and anti-terrorist financing, followed by a self-risk assessment system for such matters at the headquarters level to periodically or randomly assess money laundering and terrorist financing risks, and report the result to the People’s Bank of China or its branch at the place where the financial institution is located. Furthermore, a financial institution should fully consider the types of risk elements and how they are changing in terms of customers, geographical areas, business and transaction channels, and incorporate and use the national money laundering and terrorist financing risk assessment reports and guidelines from the regulatory authorities and self-regulatory organizations. Finally, financial institutions should regularly review and continuously optimize the money laundering and terrorist financing risk assessment workflow and indicator system.
3. The regulatory focus of the supervisory authorities is clarified.
The People’s Bank of China and its branches shall follow the risk-based and legal person supervision principles and reasonably apply all types of supervisory methods to achieve effective supervision of different types of financial institutions. They may inform the financial supervision and administration agency of the State Council or its dispatching agencies of their supervision status over the anti-money laundering and anti-terrorist financing by financial institutions.
The People’s Bank of China and its branches shall set out an effective deployment of law enforcement in accordance with the relevant law enforcement procedure requirements and put increasing focus on its supervision of the following institutions: (1) institutions that were involved in money laundering and terrorist financing cases; (2) institutions at higher risk of engaging in money laundering and terrorist financing; (3) institutions where there is evidence of serious violations through routine supervision and receipt of complaints; and (4) other institutions that requires focused supervision.