On Apr. 24, CHI PRL submitted draft amendments to AML Law (CHI).
CHI PRL submitted the AML Law (CHI) amendment draft for review for the first time.
Follows CHI PRL Apr. 2024 drafted legislative work plan, bills planned, see #209454.
Amendment
Clarifies division of responsibilities; stipulates that CHI CB shall be responsible for the supervision and management of anti-money laundering throughout the country.
Formulate regulations on AML for financial institutions; supervise and inspect the performance of AML obligations by financial institutions in terms of market access.
Corporations and individuals shall not engage in/facilitate money laundering activities, and should cooperate with financial institutions to carry out customer due diligence.
Improve the AML information sharing mechanism between State Council and bureaus.
Establish a system for the management and use of information for beneficial owners.
Also clarifies scope of AM supervision over specific non-financial institutions.
Explicitly states that administrative authorities in charge of anti-money laundering can take supervision and inspection measures to carry out AML investigations.
Amendment also stipulates the extraterritorial application effect of this law, improves the provisions on legal liability, and increases the punishment for illegal acts.
Consultation is open for 30 days, until May 25, 2024.
Sep. 2024 Review of Second Draft
On Sep. 10, 2024, CHI PRL reviewed second draft of amendments to AML law, aimed at balancing AML efforts with protecting individuals’, organizations’ financial activities.
The second draft also proposes to add provisions on personal privacy protection.
Key changes in the second draft require anti-money laundering measures to be risk-proportionate, ensuring normal financial services while protecting legal rights.
Financial institutions must conduct risk-based customer due diligence, simplify processes for low-risk cases, and handle data securely, prioritizing personal privacy.
Essential financial services must be provided while managing money laundering risks.
The draft addresses challenges posed by blockchain, live streaming platforms, virtual currencies, other technologies that make detecting money laundering more difficult.
State Council will issue guidelines to monitor, analyze such risks in emerging sectors; AML monitoring agencies will enhance systems to track suspicious activities.
FIs are required to evaluate and mitigate risks from new business activities.
AML information, including customer identity, transaction data, must be kept confidential; the draft adds provisions to prevent unauthorized sharing of such data.
Sep. 13, 2024 Second Draft
On Sep. 13, 2024, CHI PRL published the second draft of amendments to AML law.
The consultation is open for 30 days, i.e. until Oct. 12, 2024.
Nov. 1, 2024 Further Amendments
On Nov. 1, 2024, CHI PRL deliberated on further amendments to the second draft.
FIs should not take measures that are obviously inconsistent with the money laundering risk situation; ensure basic financial services are provided to customers.
Stipulates that if units and individuals have objections to money laundering risk management measures, they can directly file a lawsuit with the People's Court.
Add provisions on the legal liability of relevant state agency staff for leaking AML data.
Nov. 5, 2024 Third Review
On Nov. 5, 2024, CHI PRL said amended AML Law (CHI) has undergone a third review.
It further clarifies the conditions for financial institutions to take money laundering risk management measures to avoid affecting the normal financial activities of customers.
Improves objection handling for money laundering risk management measures.
Nov. 8, 2024 Finalized AML Law
On Nov. 8, 2024, CHI PRL said the amendment draft has been reported and finalized.
CHI PRL issued finalized AML Law (CHI) and explanatory statement, effective Jan. 1, 2025.
Regulators
CHI PRL
Entity Types
B/D; Bank; Ins; Inv Co; MSB
Reference
PR 11/8/2024; PR 11/5/2024; PR 11/1/2024; CP 9/13/2024; PR 9/10/2024; CP, PR 4/26/2024; PR, 4/24/2024; AML Law (CHI)
