Editorial
| DOI | https://doi.org/10.1108/JMLC-06-2021-0058 |
| Published date | 14 October 2021 |
| Date | 14 October 2021 |
| Pages | 661-663 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
| Author | Xin Wang |
Editorial
China’s AML criminal legislation and judicial effectiveness
Since 1990, China has gradually established a criminallegislative system to crack down on
money laundering. In view of the increasingly concern about money laundering in China
and in the face domestic and foreign pressure to integrate into the international
community’s AML co-operation framework, China has passed new laws amending the
existing legislation. This expands the scope of predicate offenses for the offense of money
laundering. On March 1, 2021, the Amendmentto the Criminal Law (XI) came into effect and
revised the law relating to self-laundering, behavior, “knowledge”and the pecuniary
penalty. Among these, criminalizing self-laundering is the highlight of this revision. This
legislative amendment aims to implement the government’spolicy statement in 2017 to see
that the law works more effectively to and to complete the follow-uprevision tasks after the
fourth round of mutual evaluation by FATF on China with reference to the prevailing
internationalAML standard that China has agreed to.
China’s commitment to criminalizing money laundering has been influenced by three
primary issues. Given the severe condition of drug crimes and due to the China’s
international obligations under the 1988 United Nations Convention Drug Conventions, the
Standing Committee of the National People’s Congress passed the Decision on the
Prohibition Against Narcotic Drugs in December1990, creating the crime of “purchasing or
acquiring dishonestlyobtained property (as opposed to concealment or disguise) constitutes
a ML activity”in Article4. This was the first time that China criminalized money laundering
but limited only to drug money laundering. In 1997 the criminallaw was revised to expand
the number of predicate crimes.Article 191 provides:
“Whoever commit any of the acts below to cover up or withhold the source or nature of what one
knows is obtained from narcotics crimes, organized crimes of the underworld, or crimes of smuggling,
or gains obtained through such crimes, are to be sentenced to not more than five years of fixed-term
imprisonment or criminal detention and are to be in addition or exclusively sentenced to a fine not less
than 5% and not more than 20% of the amount of money laundered and the gains obtained through
committing the crimes mentioned above are to be confiscated; when the circumstances are serious, the
sentence is to be not less than five years and not more than 10 years of fixed-term imprisonment and a
fine not less than 5% and not more than 20% of the amount of money laundered: providing funds
accounts; assisting to turn money and goods into cash or financial instruments; assisting to transfer
funds through transferring accounts, or other ways of settling accounts; assisting to remit funds
abroad; and other ways to cover up and withhold what is illegally obtained through committing
crimes, and the nature and sources of such gains. Institutions which commit a crime mentioned in the
preceding paragraph are to be sentenced to a fine, and personnel in charge directly responsi blef or the
crime and other personnel directly responsible for the crime are to be sentenced to not more than five
years of fixed-term imprisonment or criminal detention.”
Just three months after the 9.11 Article 7 of Amendment (III)to the CriminalLaw (passed in
December 2001) added terrorism crimes as predicate offenses for money laundering.
Amendment (III) (passed in June 2006) added as predicate offenses corruption and bribery,
crimes of disrupting the order of financial institutionsand financial fraud, thus forming the
current seven predicate offense framework for money laundering crimes. To be complaint
with FATF standards the specific AML offenses were complemented by amendments to
Article 312 of the Criminal Law providing “purchasing or acquiring dishonestly obtained
property (as opposed to concealmentor disguise) constitutes a ML activity.”With regard to
China’s legislative measuresfor thecriminalization of money laundering, FATF affirmed in
Editorial
661
Journalof Money Laundering
Control
Vol.24 No. 4, 2021
pp. 661-663
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-06-2021-0058
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