Chinese criminal law concerning money laundering
| Published date | 01 October 2003 |
| Date | 01 October 2003 |
| DOI | https://doi.org/10.1108/13685200310809653 |
| Pages | 337-343 |
| Author | He Ping |
| Subject Matter | Accounting & finance |
Chinese Criminal Law Concerning
Money Laundering
He Ping
EVOLUTION OF THE CRIMINAL LAW
The ®rst major breakthrough in the eort to ®ght
money laundering in the international community
was the UN Convention Against Illicit Trac in
Narcotic Drugs and Psychotropic Substances, estab-
lished in Vienna in December 1988. This convention
required the member countries to stipulate a crime of
covering up or concealing the proceeds from drug
tracking in domestic criminal law. The Chinese
Government rati®ed the convention on 4th
September, 1989. Then on 28th December, 1990,
the Standing Committee of the National People's
Congress enacted a regulation named Decision on
Suppressing Drug Dealing, of which Art. 4 clearly
de®ned that the act of covering up and concealing
the source or nature of the proceeds from drug traf-
®cking will condemn the perpetrator to a sentence
of ®xed-term imprisonment of not more than seven
years, criminal detention or public surveillance and
the possibility of a ®ne. This was the ®rst time that
Chinese criminal law formulated the crime of
money laundering, although at that time there was
no special term for it.
But the content of the legislation was too simple to
control the crime eectively. With the expansion of
the scope of money laundering in world legislation,
Chinese legislation also needed to expand to be eec-
tive in the ®ght against money laundering. The 1997
Amendments of the Chinese Criminal Code, based
on the 1990 Decision on Suppressing Drug Dealing,
normalised the crime of money laundering in Art.
191.
Under Art. 191, the crime of money laundering is
de®ned as follows:
`Whoever, while clearly knowing that the funds
are proceeds illegally obtained from drug-related
crimes or from crimes committed by ma®a or
smugglers and gains derived therefrom, commits
any of the following acts in order to cover up or
conceal the source or nature of the funds shall, in
addition to being con®scated of the said proceeds
and gains, be sentenced to ®xed-term imprison-
ment of not more than 5 years or criminal
detention and shall also, or shall only, be ®ned
not less than 5 per cent but not more than 20 per
cent of the amount of money laundered; if the cir-
cumstances are serious, he shall be sentenced to
®xed-term imprisonment of not less than 5 years
but not more than 10 years and shall also be
®ned not less than 5 per cent but not more than
20 per cent of the amount of money laundered:
Ð providing fund accounts;
Ð helping exchange property into cash or any
®nancial negotiable instruments;
Ð helping transfer capital through transferring
accounts or any other form of settlement;
Ð helping remit fun ds to any other country;
Ð coverin g up or concealing by any other means
the nature or source of the illegally obtained
proceeds and gains derived therefrom.
Where an organisation commits any of the crimes
mentioned in the preceding paragraph, it shall be
®ned, and the persons who are directly in charge
and the other persons who are directly responsible
for the crime shall be sentenced to ®xed-term
imprisonment of not more than 5 years or criminal
detention.'
After the terrorist attacks on Washington and New
York in the USA on 11th September, 2001, the
world made a quick response. Every country has
recognised that it is an urgent task to ®ght terrorism
to ensure worldwide security and stability. Nor will
China be an exception. In order to punish terrorist
crime, to safeguard the security of the state and to
protect people's lives and property, as well as to
maintain social order, the third set of amendments
to the Chinese Criminal Law were adopted at the
25th meeting of the Standing Committee of
the Ninth National People's Congress on 29th
December, 2001 to meet the need for ®ghting
terrorism.
Under Art. 7 of these amendments, the crime of
money laundering was revised. First, the predicate
oences of money laundering expanded to four
kinds of crimes; these are smuggling, drug-related
crime, organised crime and terrorism. Secondly, the
Page 337
Journal of Money Laundering Control Ð Vol. 6 No. 4
Journalof Money Laundering Control
Vol.6, No. 4, 2003, pp. 337± 343
#HenryStewart Publications
ISSN1368-5201
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