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Anti-Money Laundering Law of the People's Republic of China (Revised Draft)

Chapter I: General Provisions

Article 1: This Law is drafted in order to prevent and suppress money laundering and related criminal activities, and to protect national security, the societal public interest, and financial order.

Article 2: “Anti-money-laundering”, as used in this law, refers to conduct employing the measures provided by this Law to prevent and suppress money laundering activities that use any means to hide or conceal the sources and nature of criminal proceeds and the fruits thereof, as well as related criminal activities.

This Law applies to the prevention and suppression of terrorism financing activity, but where other laws have different provisions, apply those provisions.

Article 3: Anti-money laundering efforts shall thoroughly implement the Party and State’s line, directives, policies, and decision-making allocations, uphold the holistic view of national security, improve institutional mechanisms for oversight and management, and complete risk prevention systems.

Article 4: Financial institutions set up within the mainland territory of the People's Republic of China (hereinafter “domestic”) and designated non-financial institutions that this Law provides shall perform anti-money laundering obligations to shall employ measures for prevention and monitoring in accordance with law, establish and complete internal anti-money laundering control systems, and perform anti-money laundering obligations such as client due diligence, storage of client identity information and transaction records, reporting large or suspicious transactions, and special anti-money laundering prevention measures

Article 5: All units and individuals must not engage in money laundering or facilitate money laundering activities, and shall cooperate with financial institutions and designated non-financial institutions carrying out client investigations in accordance with law, and employ special measures for the prevention of money laundering as provided by this Law.

Article 6: The State Council anti-money laundering department is responsible for the oversight and management of anti-money laundering efforts throughout the country. The relevant State Council departments are to perform anti-money laundering oversight and management duties within the scope of their respective duties.

The State Council anti-money laundering department and relevant State Council departments, State Supervision Organs, and judicial organs shall cooperate with each other in anti-money laundering efforts.

Article 7: Anti-money laundering information obtained in the performance of lawful anti-money laundering duties or obligations such as client information materials, transaction information, and anti-money laundering investigation information shall be kept confidential, and must not be provided to any units or individuals except as otherwise provided by laws and administrative regulations.

State organs using anti-money laundering information shall keep state secrets, commercial secrets, and personal information confidential in accordance with law.

Article 8: Institutions performing anti-money laundering obligations and their staffs receive the protection of law in carrying out efforts in accordance with law such as submitting reports on large or suspicious transactions, and employing measures to manage risks of money laundering.

Article 9: In conjunction with state organs, the anti-money laundering departments are to carry out targeted anti-money laundering publicity and education activities, to publicize the illegality and harmfulness of money laundering activities and the forms they take, to enhance the public’s ability to prevent and identify money laundering activities.

Any units and individuals discovering money laundering activities have the right to report them to the anti-money laundering departments, the public security organs, or the relevant state organs. Organs receiving reports shall maintain the confidentiality of reporters and the report contents.

The anti-money laundering departments are to give commendations and rewards to units and individuals making outstanding contributions in the prevention and suppression of money laundering, in accordance with relevant state provisions.

Article 10: Where money laundering and the funding of terrorism occur outside the mainland territory of the People's Republic of China (hereinafter “overseas”) endangering the PRC’s sovereignty and security, infringing on the lawful rights and interests of PRC citizens, legal persons, and other organizations, or disrupting the financial order, it is to be addressed and legal responsibility is to be pursued in accordance with this Law and related laws.

Chapter II: Anti-Money Laundering Oversight and Management

Article 11: The State Council anti-money laundering department is to organize and coordinate anti-money laundering efforts for the entire nation, is responsible for monitoring anti-money laundering funds, drafting provisions for financial institutions’ anti-money laundering or collaborating with State Council departments for financial management to do so, overseeing and inspecting financial institutions performance of anti-money laundering obligations, investigating suspicious transactions with the scope of their duties, and performing other anti-money laundering duties provided by laws and the State Council.

Within the scope authorized by the State Council anti-money laundering department, the remote offices of the State Council anti-money laundering department are to conduct oversight inspections of financial institutions’ performance of anti-money laundering obligations.

Article 12: The State Council departments for financial management are to participate in drafting anti-money laundering management provisions for the financial institutions they oversee, and perform other duties related to anti-money laundering as provided by laws or the State Council.

The departments related to financial management shall implement anti-money laundering inspection requirements for financial institutions' market entry. Where it is discovered in oversight and management efforts that financial institutions have violated anti-money laundering provisions, and leads shall be transferred to the anti-money laundering department, and the investigation is to be cooperated with.

Article 13: The State Council anti-money laundering department and other relevant departments and institutions of the State Council shall oversee and urge financial institutions and designated non-financial institutions' performance of their anti-money laundering obligations.

The departments in charge of designated non-financial institutions are to oversee and inspect the designated non-financial institutions' performance of anti-money laundering obligations, handle anti-money laundering recommendations submitted by the anti-money laundering departments, and perform other anti-money laundering duties as provided by laws or the State Council. As necessary, the departments in charge of designated non-financial institutions may request that anti-money laundering departments assist in their oversight inspections.

Article 14: The State Council anti-money laundering department is to establish an anti-money laundering monitoring and analysis institution. The anti-money laundering monitoring and analysis institution is to carry out anti-money laundering funds monitoring, and is responsible for receiving and analyzing reports on large or suspicious transactions, transferring analysis outcomes, reporting on efforts to the State Council anti-money laundering department, and performing other anti-money laundering duties as provided by laws or the State Council.

As needed to perform duties in accordance with law, the anti-money laundering monitoring and analysis body may request that organs with anti-money laundering obligations provide supplemental information related to large or suspicious transactions.

Article 15: In order to perform anti-money laundering duties, the State Council anti- money laundering department may obtain necessary information from relevant state organs, and the relevant state organs shall provide it in accordance with law.

The State Council anti-money laundering department shall periodically report on anti-money laundering efforts to the relevant state organs, and provide necessary anti-money laundering information in accordance with law to state organs with anti-money laundering-related duties such as for oversight and management, administrative investigation, supervision investigation, or criminal procedure.

Article 16: Persons entering or exiting the mainland carrying cash or bearer certificates in excess of the provided values shall proactively declare them to customs. Where customs discovers that persons entering or exiting the mainland are carrying cash or bearer certificates in excess of the provided values, they shall promptly report to the anti-money laundering departments.

The scope of declarations, amount standards, reporting mechanisms, and so forth provided for in the preceding paragraph are to provided for by the State Council anti-money laundering department and the State Council foreign exchange management department in conjunction with the General Customs Authority.

Article 17: Legal persons and unincorporated organizations shall promptly update and store information on the beneficial owners, and truthfully submit the information and update it with the registration organs. The anti-money laundering departments and registration organs are to manage beneficial owner information in accordance with provisions.

The anti-money laundering departments and relevant state organs may user beneficial owner information in accordance with law as needed to perform their duties. Financial institutions and designated non-financial institutions are to inquire into and check beneficial owner information in accordance with law when performing anti-money laundering obligations. State secrets, commercial secrets, and personal information shall be kept confidential in accordance with law in the use of beneficial owner information.

Article 18: Where anti-money laundering departments and other departments with responsibility for anti- money laundering oversight and management duties in accordance with law discover suspected money laundering and related violations or crimes in transaction activities, they shall transfer it to be handled with an organ that has jurisdiction. The organ receiving the transfer shall give feedback on the outcomes of the handling in accordance with relevant provisions.

Article 19: The anti-money laundering departments may employ the following oversight and inspection measures to perform the duties provided for in this Law:

(1) Entering financial institutions to conduct on-site inspections;

(2) Question the staff of financial institutions and request that they make explanations related to the subject of the investigation;

(3) Access and reproduce financial institutions’ documents and materials related the matter being investigated, and seal those that might be removed, hidden, or destroyed;

(4) Inspect financial institutions’ computer networks and information systems, and collect and store relevant data and information from computer networks and information systems. On-site inspections shall be conducted upon the approval of the State Council anti-money laundering department or the responsible person of its remote institution. There must be at least two inspectors and they shall present their law enforcement identification and notice of inspections; where there are less than two inspectors or they fail to present their law enforcement identification or notice of inspection, the financial institutions have the right to refuse to accept the inspection.

Article 20: As needed to perform duties in accordance with law, the anti-money laundering departments may request that financial institutions report on their performance of anti-money laundering obligations, carry out risk monitoring and assessments of financial institutions, and conduct assessments of financial institutions’ implementation of this Law and related management provisions.

As needed to perform duties in accordance with Law, the anti-money laundering departments may employ the following measures:

(1) Speak with financial institutions’ directors, supervisors, senior managers, and personnel directly responsible for anti-money laundering work, and request that they make explanations of major matters in operations activities and risk management;

(2) Make regulatory alerts on the risks and issues that exist in the financial institutions;

(3) Verify the financial institutions’ performance of anti-money laundering obligations and corrections.

Article 21: In conjunction with the relevant state organs, the State Council anti-money laundering department is to carry out money laundering risk assessments of countries and industries, promptly monitor new forms of money laundering risks, and allocate regulatory resources appropriate to the risk, and employ corresponding prevention and control measures.

Article 22: The State Council anti-money laundering department may list countries or regions that have a serious risk of money laundering as high-risk countries or regions and employ corresponding risk prevention and control measures on the foundation of soliciting the opinions of the relevant state organs and upon the approval of the State Council.

Article 23: Institutions performing anti-money laundering obligations may establish self-discipline anti-money laundering organizations in accordance with law. The self-discipline anti-money laundering organizations are to receive guidance and oversight of the State Council anti-money laundering department, and coordinate with the industry self-discipline organizations to coordinate self-discipline management in anti-money laundering.

Article 24: Institutions providing services such as consultation, technology, or professional capacity for anti-money laundering shall diligently and conscientiously provide services with the guidance of the State Council anti-money laundering department, maintain data security, and protect personal information.

Chapter III: Anti-money laundering obligations.

Article 25: Financial institutions shall establish and complete internal anti-money laundering control systems in accordance with this Law, establish dedicated bodies or designate an internal body to take lead responsibility for anti-money laundering efforts, assess the state of money laundering risks, draft corresponding risk management systems and processes, establish and complete corresponding information systems, appoint personnel corresponding to the size of the operations and the state of money laundering risk, and carry out anti-money laundering training and publicity as required.

Financial institutions shall oversee the effective implementation of internal anti-money laundering control systems through means such as internal auditing and societal auditing. The responsible person for financial institutions is responsible for the effective implementation of internal anti-money laundering control systems.

Article 26: Financial institutions shall establish systems for client due diligence investigations in accordance with provisions, learning of client’s identities, transaction backgrounds, and risk status through due diligence investigations.

Financial institutions must not provide services or conduct transactions for clients whose identities are unclear, must not open anonymous accounts or accounts under assumed names for clients, and must not open accounts for clients who are posing as others.

Article 27: In any of the following circumstances, financial institutions shall identify and employ reasonable measures to verify the identities of clients and beneficial owners, and learn of clients' goals in establishing operational relationships and in transactions:

(1) establishing operational relationships with clients or providing one-off financial services above the amount provided for;

(2) where there is reasonable grounds for suspecting that clients and their transactions are money laundering or other illegal and criminal activities;

(3) where there is doubt as to the accuracy, validity, or completeness of previously acquired client identity materials.

Where the provisions of the preceding paragraph involve a higher risk of money laundering, the financial institutions shall also learn about the sources and uses of relevant funds.

Article 28: During the period that a business relationship continues, the financial institutions shall continue to pay attention to and assess the client’s overall status and transaction situation, learn about the client’s money laundering risks, and promptly employ corresponding measures for due diligence inspections and money laundering risk management.

"Money laundering risk management measures" as used in this Law includes sustained monitoring, verifying the circumstances of clients and their transactions, limiting transaction methods, amounts, or frequency; limiting business types, refusing to handle operations, or ending business relationships. Financial institutions’ employment of money laundering risk management measures shall comply with relevant provisions, they must not employ measures that clearly do not fit the risk.

Article 29: Where clients have others represent them in handling operations, the financial institutions shall verify the existence of the agency relationship and identify and verify the representative’s identity.

Where financial institutions and clients conclude contracts such as for personal insurance or trusts, and the benneficiary of the contract is not the client themself, the financial institutions shall concurrently identify and verify the beneficiaries’ identities.

Article 30: Where financial institutions retain a third party to carry out due diligence investigations of clients, they shall assess the third party’s risk and capacity to perform anti-money laundering obligations. Where the third party has a higher risk situation or does not have the capacity to perform anti-money laundering obligations, the financial institutions must not entrust them to carry out the client due diligence investigations.

Financial institutions shall ensure that the third party has employed client due diligence investigation measures that comply with the requirements of this Law. Where the third party has not employed client due diligence measures that comply with the requirements of this law, the financial institution is to bear legal responsibility for the failure to perform client due diligence obligations.

The third party shall provide the financial institutions with the necessary information on the client due diligence investigation and cooperate with the financial institutions in continuing to carry out the client due diligence investigations.

Article 31: Financial institutions conducting client due diligence investigations may lawfully verify the clients’ identities and other relevant information through the anti-money laundering departments, public security organs, and departments such as for market regulation, civil affairs, taxation, immigration management, and telecommunications management.

Article 32: Financial institutions shall establish systems for storing client identity materials and transaction records, in accordance with provisions.

Where there is a change in clients’ identity materials during the period that a business relationship exists, they shall be promptly updated.

Clients' identification materials shall be retained for at least 10 years, after the business relationship concludes and transaction records shall be retained for at least 10 years after the transaction is completed.

When financial institutions dissolve, are disbanded, or are pronounced bankrupt, they shall send clients’ identification materials and transaction record information to the body designated by the relevant departments of the State Council.

Article 33: Financial institutions shall implement systems for reporting large transactions in accordance with provisions, and where a single client transaction or the cumulative total of transactions in a certain time period exceeds the amount provided, they shall promptly report it to the anti-money laundering monitoring and analysis body.

Financial institutions shall implement systems for reporting suspicious transactions in accordance with provisions, formulate monitoring standards, and promptly and effectively identify and analyze suspicious transaction activity and submit a suspicious transaction report to the anti-money laundering monitoring and analysis body.

Article 34: Under the guidance of the anti-money laundering departments, financial institutions shall pay attention to and assess new money laundering risks brought on by the use of new technologies and new products, and employ corresponding money laundering risk management measures based on the circumstances.

Article 35: Financial institutions that have established branches domestically or overseas, or that are controlling shareholders of other financial institutions, as well as financial holding companies, shall establish uniform anti-money laundering systems at the headquarters or group level. Where anti-money laundering information is shared internally within a company or between group members in order to perform anti-money laundering obligations, the information sharing mechanisms shall be clarified and it shall be ensured that the relevant information is not used for purposes other than anti-money laundering or countering terrorism financing.

Article 36: Units and individuals that have business relationships with financial institutions shall cooperate with the financial institutions’ due diligence investigations, providing truthful and valid identification cards or other identification documents, correctly and completely reporting identification information, and truthfully provide materials related to the transaction and financing.

Where units and individuals refuse to cooperate with financial institutions’ reasonable due diligence investigation measures employed in accordance with this Law, the financial institutions have the right to employ money laundering risk management measures such as restricting or refusing the handling of operations or terminating business relationships and submit reports on suspicious transactions.

Article 37: Where units and individuals have objections to the money laundering risk control measures employed by financial institutions, they may submit them to the financial institutions. Within 20 days of receiving them, financial institutions are to check and address them and given written feedback to the parties on the outcome. Where a written response is not received in time or they are not satisfied with the outcome of the handling, they may make a complaint to the anti-money laundering departments or initiate litigation in the people's courts in accordance with law.

Article 38: All units and individuals shall employ special anti-money laundering prevention measures against the targets on the following lists:

(1) The list of terrorist organizations and personnel designated by the national leading institution for counter-terrorism efforts and announced through its administrative body;

(2) the list published by the Ministry of Foreign Affairs of organizations and personnel involved in targeted financial sanctions in UN Security Council resolution notices;

(3) The list of organizations and personnel designated by the State Council anti-money laundering departments in conjunction with relevant state organs as having major money laundering risks where not employing measures might cause serious consequences;

Where there are objections to the list provided for in item (1) of the preceding paragraph, the parties may apply for a review in accordance with the PRC Counter-terrorism Law. Where there are objections to the list provided for in item (2) of the preceding paragraph, the parties may apply to be removed from the list through the relevant procedures. Where there are objections to the list provided for in item (3) of the preceding paragraph, the parties may apply for an administrative reconsideration to the department that made the list decision, and where they are not satisfied with the administrative reconsideration decision, they may initiate administrative litigation in accordance with law.

"Special measures for preventing money laundering" as used in this Law include immediately stopping transactions with the targets on the list, their representatives, organizations and persons they direct, and organizations they control either directly or indirectly, immediately restricting related funds or the transfer of assets, and so forth.

The targets on the lists provided for in the first paragraph of this article may apply to the relevant state organs in accordance with provisions to use restricted funds and assets for necessary expenses such as living costs or medical care. The employment of special measures for the prevention of money laundering shall protect the lawful rights and interests of good faith third parties, who can get remedies for their rights in accordance with law.

Article 39: Financial institutions shall identify and assess relevant risks and formulate corresponding systems, promptly obtain the lists provided for in the first paragraph of the preceding article, conduct reviews of clients and their transaction counterparts, employ corresponding measures, and report to the anti-money laundering departments.

Chapter IV: Anti-Money Laundering Investigations

Article 40: Where the State Council anti-money laundering department or its districted city level or higher remote office discover that suspicious transaction activities suspected of being money laundering or other conduct in violation of this Law that requires an investigation and verification, or where the relevant state organs request that anti-money laundering departments assist in an investigation in accordance with law, then, with the approval of the State Council anti-money laundering department or the responsible person for its remote office at the districted city level or higher, they may issue an investigation notice document to the financial institutions or designated non-financial institutions, and carry out an anti-money laundering investigation with reference to the procedures provided for in the second paragraph of article 19 of this Law.

Where anti-money laundering departments conduct investigations of designated non-financial institutions, they may request assistance from the departments in charge of the designated non-financial institutions when necessary. Financial institutions and designated non-financial institutions shall cooperate with anti-money laundering investigations and truthfully provide relevant documents and materials in the time allowed.

Article 41: The State Council anti-money laundering department or its remote institution at the districted level or above may employ the following measures in carrying out anti-money laundering investigations:

(1) Question the relevant personnel of financial institutions and designated non-financial institutions, and request that they make explanations;

(2) Access and reproduce account information, transaction records, and other relevant materials of the investigation’s subject;

(3) Sealing documents or materials that might be removed, concealed, altered, or destroyed.

A record shall be kept of questioning. The questioning record shall be checked and signed by the person being questioned. Where there are omissions or errors in the record, the person being questioned may request supplements or corrections. After the person being questioned confirms that the written record is free of error, they shall sign or affix a seal to it, and the investigators shall sign the record as well.

Investigators sealing documents or materials shall make an inventory in conjunction with the staff of the financial institution or designated non-financial institution, to be signed or have seals affixed by the investigators and the institution staff, with one copy given to the institution and one attached to the case file.

Article 42: Where after investigation the suspicion of money laundering and related crimes can still not be eliminated, or where after monitoring funds there is suspicion of a crime, it shall be promptly transferred to an organ with jurisdiction, and the organ receiving it shall give feedback on the handling in accordance with laws and relevant provisions.

Where clients transfer account funds involved in the investigation, then when the State Council anti-money laundering department finds it necessary, measures to temporarily freeze the assets may be employed upon approval of the responsible person.

After the organ receiving the transfer receives leads, they shall promptly make a decision on whether or not to continue the temporary freezing of funds provided for in the preceding paragraph. Where the organ receiving the transfer finds it is necessary to continue the freezing, it is to employ freezing measures in accordance with relevant law; and where it finds it is not necessary to continue freezing, it shall immediately notify the State Council anti-money laundering department, which shall immediately notify the financial institutions to lift the freezing.

Temporary freezing must not exceed 48 hours. Where financial institutions do not receive notice from relevant state organs to continue freezing within 48 hours of employing temporary freezing measures in accordance with a request from the State Council anti-money laundering department, they shall immediately lift the freezing.

Chapter V: International Anti-Money Laundering Cooperation

Article 43: The PRC is to cooperate in carrying out anti-money laundering international cooperation on the basis of international treaties it has concluded or acceded to, or in accordance with the principle of equal reciprocity.

Article 44: Based on the authorization of the State Council, the State Council anti-money laundering department is responsible for organizing and coordinating international anti-money laundering cooperation, representing the Chinese government to participate in international organizations’ activities, carrying out anti-money laundering cooperation with relevant overseas institutions and exchanging anti-money laundering information.

The relevant state organs are to carry out international anti-money laundering cooperation within the scope of their duties.

Article 45: Judicial assistance involving the pursuit of money laundering crimes is to be handled by the relevant state organs in accordance with the International Criminal Justice Assistance Law, the Criminal Procedure Law, and other relevant laws.

Article 46: In the course of lawfully investigating money laundering and the financing of terrorism, and in accordance with the principle of reciprocity or agreements reached with relevant countries through discussions, the relevant state organs may request to establish representative accounts in the mainland or to cooperate with financial institutions of countries that China has a close relationship with.

Article 47: Where foreign countries or organizations that do not follow the principal of reciprocity, and also have not reached a consensus with China through discussion, directly request that domestic financial institutions provide client identification materials or transaction information; seize, freeze, or transfer domestic funds or assets; or take other actions, the financial institutions must not comply without authorization and shall promptly report to the State Council departments for finance management.

Except as provided for in the preceding paragraph, where foreign countries or organizations request that domestic financial institutions provide summary-type information such as compliance information or business information, based on the need for compliance regulation, then the domestic financial institution may provide it or cooperate after it reports to the State Council financial management departments or relevant state organs.

Where the materials and information provided for in the preceding two paragraphs involves important data and personal information, the relevant state provisions on data security management and the protection of personal information shall also be complied with.

Chapter VI: Legal Responsibility

Article 48: Where the personnel engaged in anti-money laundering at anti-money laundering departments and other departments that have anti-money laundering oversight and management duties in accordance with law, have any of the following conduct, they are to be given sanctions in accordance with law:

(1) Conducting inspections or investigations, or employing temporary freezing measures, in violation of provisions;

(2) Leaking state secrets, commercial secrets, or personal information learned of for anti-money laundering;

(3) Carrying out administrative punishments against relevant institutions and persons in violation of provisions;

(4) Other acts of not performing duties in accordance with law.

Article 49: Where financial institutions have any of the following circumstances, the State Council anti-money laundering department or its remote office at the districted city level or above is to order that corrections be made in a set time, and where the circumstances are serious or corrections are not made in the time provided, give a warning and a concurrent fine of between 200,000 and 2,000,000 RMB based on the circumstances and within the scope of their duties, or recommend that the relevant financial management departments restrict or prohibit their operations:

(1) Failing to establish and complete internal anti-money laundering control systems as provided;

(2) Failing to establish dedicated bodies or to direct internally established bodies to take the lead in being responsible for anti-money laundering efforts as provided;

(3) Failing to allocate personal corresponding to the scale of business and the money laundering risk as provided;

(4) Failing to carry out money laundering risk assessments or to establish corresponding risk management systems as provided;

(5) Failure to formulate or improve standards for monitoring suspicious transactions as provided;

(6) Failure to set up or improve information systems related to anti-money laundering as provided;

(7) Failure to carry out internal or societal accounting for anti-money laundering as provided;

(8) Failure to carry out anti-money laundering training as provided;

(9) failure by the responsible person for a financial institution to effectively perform anti- money laundering duties;

(10) Other circumstances of failing to implement internal anti-money laundering control systems.

Article 50: Where financial institutions have any of the following conduct, the State Council anti-money laundering department or its remote office at the districted city level or above is to order that corrections be made in a set time, give a warning, and a concurrent fine of between 500,000 and 5,000,000 RMB based on the circumstances and within the scope of their duties, or recommend that the relevant financial management departments restrict or prohibit their operations:

(1) providing services or conducting transactions for clients whose identities are unclear, opening anonymous accounts or accounts under assumed names for clients, or opening accounts for clients who are posing as others;

(2) Failing to report clearly suspicious transactions as provided;

(3) Failing to employ risk management measures as provided for situations with a high risk of money laundering;

(4) Failing to employ special measures for the prevention of money laundering;

(5) Violating confidentiality provisions by making inquiries into or leaking relevant information;

(6) Refusing or obstructing anti-money laundering oversight and management or investigations, or providing fake or misleading materials;

(7) Altering or fabricating client identification materials or transaction records, or deleting them without legitimate cause;

(8) Using means such as splitting transactions to avoid anti-money laundering obligations, either on one’s own or assisting a client.

Article 51: Where financial institutions have any of the following conduct other than the illegal acts in the preceding article, the State Council anti-money laundering department or its remote office at the districted city level or above is to order that corrections be made in a set time, and where the circumstances are serious or corrections are not made in the time provided, give a warning and a concurrent fine of between 200,000 and 2,000,000 RMB:

(1) Failing to carry out client due diligence investigations as provided;

(2) Failing to store client identification materials and transaction records as provided;

(3) Failing to report large transactions as provided;

(4) Failing to report suspicious transactions as provided;

Article 52: Where financial institutions violate this Law causing criminal proceeds and the fruits thereof to be hidden or concealed, or cause terrorist financing to occur, the State Council anti-money laundering department or its remote office at the districted city level or higher is to order that corrections be made in a set time, and where the amount involved is less than 10,000,000 RMB give a fine of between 2,000,000 and 10,000,000 RMB; where the amount involved is more than 10,000,000 RMB, give a fine of between 50 percent and 2 times the amount involved; and where the circumstances are serious, the anti-money laundering departments may, based on the circumstances and within the scope of their duties, implement or recommend that relevant finance management departments implement orders to suspend business for rectification, cancellation of business permits, and other such punishments.

 

Article 53: Where the State Council anti-money laundering department or its remote office at the districted city level or above punish financial institutions in accordance with articles 49-51 of this Law, they may also, based on the circumstances, give warnings to the responsible directors, supervisors, senior managers, or other directly responsible persons, and fine them between 20,000 and 200,000 RMB, either together or separately; and where the circumstances are serious, the anti-money laundering departments may, based on the circumstances and within the scope of their duties, implement or recommend that the finance management departments implement punishments such as canceling professional qualifications or prohibiting their engagement in the finance industry.

Where the State Council anti-money laundering department or its remote office at the districted city level or above punish financial institutions in accordance with article 52 of this Law, they may also, based on the circumstances, give warnings to the responsible directors, supervisors, senior managers, or other directly responsible persons, and fine them between 200,000 and 1,000,000 RMB; and where the circumstances are serious, the anti-money laundering departments may, based on the circumstances, implement or recommend that the finance management departments implement punishments such as canceling professional qualifications or prohibitting their engagement in the finance industry.

Where the financial institution directors, supervisors, senior management, or other directly responsible personnel can sufficiently prove that they have already diligently and conscientiously employed anti-money laundering measures, they may go without punishment.

Article 54: Where financial institutions violate article 47 of this law by taking action without authorization, the State Council anti-money laundering department is to give a fine of between 500,000 and 5,000,000 RMB, and where losses are caused, a fine of between 1 and 5 times the direct economic harm is to be given. The State Council departments related to financial management may independently or concurrently give warnings and fines of between 50,000 and 500,000 RMB to responsible directors, supervisors, and senior managers or other directly responsible personnel.

Where foreign financial institutions violate article 46 of this Law by no cooperating with the investigations of relevant state organs, the relevant state organs may recommend that the State Council anti-money laundering department give fines with reference to article 50 item (6) and the first paragraph of article 53, and may enter them in the list provided for in item (3) of the first paragraph of article 38.

Article 55: Where units and individuals other than financial institutions fail to perform obligations for special measures for the prevention of money laundering in accordance with article 38, the State Council anti-money laundering department or its remote office at the districted city level or above is to order that corrections be made in a set time, and where the circumstances are serious give a warning or a fine of between 20,000 and 200,000 RMB.

Where legal persons or unincorporated organizations fail to submit beneficial owner information to the registration organs as provided, the registration organs are to order corrections in a set period of time, and where the corrections are refused, give a fine of up to 50,000 RMB. Where the registration organs submit false or untrue beneficial owner information, or do not promptly update beneficial owner information in accordance with provisions, the State Council anti-money laundering department or its remote office at the districted city level or above is to order that corrections be made in a set time, and where corrections are refused give a fine of between 50,000 and 200,000 RMB:

Article 56: The State Council anti-money laundering department is to comprehensively consider financial institutions’ business models, the degree of diligence and conscientiousness, the period during which the illegal conduct continued, the degree of harm, and the circumstances of corrections, in formulating standards for discretion in administrative punishments.

Article 57: Where designated non-financial institutions and their relevant staffs violate this Law, punishment is to be conducted with reference to articles 49-53 of this Law, and the specific standards are to be drafted by the State Council departments in charge of designated non- financial institutions and the State Council anti-money laundering department.

Article 58: Where violations of this Law constitute a crime, criminal liability is to be pursued in accordance with law.

Chapter VII: Supplementary Provisions

Article 59: “Financial institutions” as used in this Law, refers to domestically-established financial institutions in the banking, securities and futures, and insurance sectors, non-bank payment institutions, as well as other institutions engaged in financial operations as designated and published by the State Council anti-money laundering department.

Article 60: “Designated non-financial institutions” as used in this law, refers to:

(1) Real estate development enterprises or intermediary establishments that provide housing sales or brokerage services;

(2) Accounting firms, law firms, or notary establishments that are entrusted by clients to buy or sell real estate, that escrow funds, securities, or other assets, that escrow banking or securities accounts, that finance the establishment or operation of enterprises, or act as agents in the buying and selling of business entities;

(3) Dealerships engaged in transactions in precious metal and gem transactions;

(4) The State Council anti-money laundering department and other relevant departments and institutions of the State Council shall oversee and urge financial institutions and designated non-financial institutions' performance of their anti-money laundering obligations.

When the designated non- financial institutions above engage in the operations designated in the preceding paragraph, they shall perform anti-money laundering obligations with reference to the provisions of Chapter III of this Law on financial institutions, and employ anti-money laundering measures corresponding to the money laundering risk.

Article 61: “Beneficial owner” as used in this Law, refers to the legal person or unincorporated organization with ultimate possession or actual control, or the natural persons who enjoy the ultimate benefit from the legal person or unincorporated organization. The specific standards are to be formulated by the State Council anti-money laundering department in conjunction with relevant State Council departments.

Article 62: This Law shall take effect on xx-xx-xxxx.

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