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The People’s Bank of China (PBOC), The China Banking and Insurance Regulatory Commission, and the China Securities Regulatory Commission issued new guidelines for financial firms regarding Customer Due Diligence (CDD) and transaction records to curb money laundering risk.
The new rules will be effective from 1 March, the standards will include a requirement for customers’ depositing more than RMB 50,000 ($7,875) to register the source of income along with its usage. On another hand, domestic financial transactions of more than RMB 500,000 ($78,750) and overseas transfers of more than RMB200,000 (US$31,500) will come under “key supervision”.
According to a joint announcement published by the three institutions in January, the guidelines will play a crucial role in implementing the central government’s anti-money laundering supervision systems to eliminate the financial crime risks.
Specifically, they will “improve the scope of anti-money laundering obligations in the financial industry, clarify the specific requirements for customer due diligence in each financial industry, emphasize risk-based due diligence measures and continuous due diligence measures, and require financial institutions to deal with high-risk situations.”
In addition to this, China’s crackdown on money laundering activities and organized crime groups have also highlighted the risk of financial crimes through cross-border gambling, as two CEOs of gambling companies Alvin Chau and Levo Chan have been arrested for being involved in money laundering activities.
The PBOC had also issued a previous advisory in April 2021, with the objective of fighting cross-border gambling crime by targeting “capital chains” within the financial sector. However, according to a Professor in Integrated Resort and Tourism Management at the University of Macau, Desmond Lam, the challenges the junket industry is experiencing and the impact of these crackdowns on Macau is most likely to be reduced over the time
“Such anti-money laundering policies, given our current emphasis on the greater control of the gaming industry particularly on junket businesses, will have a much less significant impact on Macau,” Professor Lam told Inside Asian Gaming. “This is particularly so moving forward as we emphasize developing a healthy, legal and leisure [focussed] mass gaming market in Macau.”
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