From March, new rules will be ushered in for cash deposits and withdrawals.
From 1 March 2022, the Administrative Measures for Customer Due Diligence and Customer Identity Information and Transaction Record Preservation of Financial Institutions issued by the Central Bank of China and other three departments will be formally implemented.
The Measures stipulate that commercial banks, rural cooperative banks, rural credit cooperatives, village and township banks and other financial institutions that handle cash deposits and withdrawals of more than RMB 50,000 yuan or the equivalent of more than 10,000 U.S. dollars in foreign currency for natural person customers shall identify and verify the identity of the customers, understand and register the source or use of funds.
Subsequently, "personal deposits and withdrawals of more than 50,000 yuan in cash need to register the source of funds" appeared on Weibo's hot search, causing concern.
Why is such an approach introduced?
In a word, it is for anti-money laundering.
The person in charge of the relevant department pointed out in response to a reporter's question that in recent years, with the changes in financial products and business models, some new challenges have emerged in the anti-money laundering work in the financial industry, and in order to enhance the mainland's ability to prevent money laundering and terrorist financing risks, it is necessary to further improve the anti-money laundering supervision system and strengthen anti-money laundering supervision through the formulation of the "Measures".
The Financial Reporter noted that on the same day that the Measures were issued, 11 departments, including the Chinese Bank and the Ministry of Public Security, announced that a three-year campaign to combat money laundering and crimes would be carried out nationwide from January 2022 to December 2024 to resolutely curb the spread of money laundering and related crimes.
Previously, the central bank piloted large-scale cash management in Hebei Province and In Zhejiang Province and Shenzhen City from July 1, 2020. Hebei personal deposits and withdrawals of more than 100,000 yuan, Shenzhen personal deposits and withdrawals of more than 200,000 yuan, Zhejiang personal deposits and withdrawals of more than 300,000 yuan to register. The pilot period is 2 years.
There is no doubt that anti-money laundering efforts are escalating.
Dong Ximiao, chief researcher of China Zhonglian Finance, told Zhongxin Finance that cash has the characteristics of anonymity and untraceability, and large amounts of cash are often used to carry out illegal acts such as money laundering and tax evasion, endangering the national economic and financial order. Especially in today's environment where non-cash payment methods are very convenient, the proportion of cash use is declining, and the use of large amounts of cash by ordinary savers has become relatively rare.
Dong Ximiao said that therefore, the three departments have issued new regulations to further supplement and improve the relevant requirements for customer due diligence with reference to international standards, which will help improve the anti-money laundering supervision system, combat illegal cash use needs, improve the level of anti-money laundering work, reduce money laundering and other criminal acts, and maintain financial security.
Infographic: Bank money counters at work. Photo by Ai Qinglong
Will this bring inconvenience to ordinary savers?
Dong Ximiao believes that the new measures have little impact on ordinary customers, first of all, there are really not many cases of personal access to 50,000 yuan in cash, and diversified non-cash payment methods such as mobile payment and digital yuan in the pilot can already meet people's daily living needs, and there is no need to use cash. Secondly, even if it is necessary to deposit and withdraw more than 50,000 yuan of cash, at present, it is only necessary to fill out a large cash business form, the withdrawal should be checked for purpose, the deposit should be checked, and no certification materials are required, which has little impact on the convenience of deposit and withdrawal.
"Be bright and upright, if you walk straight and straight, you are not afraid of the regulations, as long as you fill it out clearly." "Don't do bad things and have nothing to worry about, understand the good intentions of the bank." "Prevent money laundering by criminals and support this decision." Many netizens also expressed support for the new regulations.
In addition, there is another news about cash access that has attracted attention, and two private banks have announced that they will stop cash business.
Among them, Liaoning Zhenxing Bank issued an announcement on the suspension of counter and ATM cash business, and with the approval of the Competent People's Bank of China, from March 1, 2022, it will suspend cash business such as cash deposits and withdrawals, change exchange, damaged coin exchange, and ATM deposits and withdrawals. Beijing Zhongguancun Bank issued an announcement on the suspension of cash receipt and payment business, and after reporting to the relevant regulatory authorities, it will suspend cash receipt and payment business from April 1, 2022.
Zhongxin Finance noted that Beijing Zhongguancun Bank and Liaoning Zhenxing Bank are both private banks, both of which were established in 2017. The reason for the suspension of cash business, both banks mentioned a reason: to continuously increase the development of online business, focusing on resources to improve the service capabilities of electronic banking.
In Dong Ximiao's view, there are currently 19 private banks in the mainland, private banks "one line a little", fewer offline outlets, the proportion of cash business is very small, but the cost of cash business input is relatively high, these banks stop cash business, basically do not affect the service to customers, more importantly, can reduce operating costs.
"For the entire banking industry, there is no large-scale cessation of cash use, so there is no need to over-interpret." Dong Ximiao said.
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In order to further improve the anti-money laundering supervision system and improve the level of anti-money laundering work, after the deliberation and approval of the Executive Council of the Chinese Min Bank and the approval of the Banking and Insurance Regulatory Commission and the Securities Regulatory Commission, the Chinese Min Bank, the China Banking and Insurance Regulatory Commission and the China Securities Regulatory Commission recently jointly issued the "Administrative Measures for Customer Due Diligence and Customer Identity Information and Transaction Records preservation of Financial Institutions" (Chinese Min Bank, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission Order [2022] No. 1, hereinafter referred to as " Measures"), effective from March 1, 2022.
The promulgation and implementation of the Measures is an important measure to implement the Party Central Committee and the State Council on improving the anti-money laundering supervision system and mechanism, improving the level of anti-money laundering work in the mainland, and effectively preventing financial risks. According to the current development of the financial industry in mainland China, the Measures 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, require financial institutions to strengthen due diligence on high-risk situations, allow financial institutions to take simplified due diligence measures for assessed low-risk business and customers, refer to international standards, improve the identification requirements of beneficial owners and agency banks, remittances, and conduct due diligence through third parties. Due diligence requirements under special businesses such as high-risk countries or regions. The Measures improve the specific requirements for the preservation of customer identity information and transaction records.
In the next step, the Chinese Bank and other departments will continue to do a good job in the implementation of the Measures, urge financial institutions to continuously improve the level of anti-money laundering work, standardize anti-money laundering performance, and effectively do a good job in the prevention and control of money laundering and terrorist financing risks in the mainland.
Chinese Min Bank of China Banking and Insurance Regulatory Commission Order [2022] No. 1 of the China Securities Regulatory Commission (Measures for the Administration of Customer Due Diligence and Preservation of Customer Identity Information and Transaction Records of Financial Institutions)
Chinese Min Bank of China Banking and Insurance Regulatory Commission China Securities Regulatory Commission Order [2022] No. 1
The Administrative Measures for Customer Due Diligence and Customer Identity Information and Transaction Record Preservation of Financial Institutions have been deliberated and approved by the 10th Executive Meeting of Min min bank in 2021 Chinese on October 29, 2021 and examined and approved by the Banking and Insurance Regulatory Commission and the China Securities Regulatory Commission, and are hereby promulgated and implemented from 1 March 2022.
Yi Gang, President of Chinese Min Bank
Chairman of the Banking and Insurance Regulatory Commission Guo Shuqing
Chairman of the Securities Regulatory Commission Yi Huiman
January 19, 2022
Measures for the management of customer due diligence and customer identity information and transaction record keeping of financial institutions
Chapter I General Provisions
Article 1: These Measures are formulated on the basis of the "Anti-Money Laundering Law of the People's Republic of China", the "Counter-Terrorism Law of the People's Republic of China", and other laws and administrative regulations, so as to prevent and curb money laundering and terrorist financing activities, standardize the due diligence of customers of financial institutions, the preservation of customer identity information and transaction records, and preserve national security and financial order.
Article 2 These Measures apply to the following financial institutions established in accordance with law within the territory of the People's Republic of China:
(1) Development financial institutions, policy banks, commercial banks, rural cooperative banks, rural credit cooperatives, and village and town banks;
(2) securities companies, futures companies, and securities investment fund management companies;
(3) insurance companies and insurance asset management companies;
(4) Trust companies, financial asset management companies, enterprise group finance companies, financial leasing companies, auto finance companies, consumer finance companies, currency brokerage companies, loan companies, and wealth management companies;
(5) other institutions engaged in financial business determined and announced by the Chinese Bank.
Non-bank payment institutions, bank card clearing institutions, capital clearing centers and institutions engaged in exchange business, fund sales business, insurance professional agency and insurance brokerage business perform customer due diligence, customer identity information and transaction record preservation obligations are subject to the provisions of these Measures on financial institutions.
Article 3 Financial institutions shall be diligent and conscientious, follow the principle of "know your customers", identify and verify the identity of customers and their beneficial owners, and adopt corresponding due diligence measures for customers, business relationships or transactions with different risk characteristics of money laundering or terrorist financing.
Financial institutions should take continuous due diligence measures during the period of business with customers. In response to situations with a high risk of money laundering or terrorist financing, financial institutions shall employ corresponding measures to strengthen due diligence, and when necessary, shall refuse to establish business relationships or handle business, or terminate business relationships that have already been established.
Article 4 Financial institutions shall, in accordance with the principles of safety, accuracy, completeness and confidentiality, properly preserve customer identity information and transaction records, ensure that each transaction is reproducible enough, and provide the information required for customer due diligence, monitoring and analysis of transactions, investigation of suspicious transaction activities, and investigation and handling of money laundering and terrorist financing cases.
Article 5: Financial institutions shall, on the basis of these Measures and relevant laws and regulations on anti-money laundering and counter-terrorist financing, and in conjunction with the risk situation faced by financial institutions in terms of money laundering and terrorist financing, establish and complete internal control systems in areas such as customer due diligence, customer identity information, and transaction record preservation, periodically audit and assess whether the internal control systems are sound and effective, and promptly revise and improve relevant systems.
Financial institutions should reasonably design business processes and operational specifications to ensure the effective implementation of customer due diligence, customer identity information and transaction record retention systems.
Article 6: Financial institutions shall make unified arrangements or arrangements at the headquarters level for customer due diligence, customer identity information, and transaction record preservation, and formulate anti-money laundering and counter-terrorist financing information sharing systems and procedures, so as to ensure the effective development of customer due diligence, money laundering, and terrorist financing risk management efforts.
Financial institutions shall supervise and manage the implementation of the customer due diligence system, customer identity information and transaction record keeping system by their branches.
Financial institutions shall require their overseas branches and subsidiaries to implement the relevant requirements of these Measures within the scope permitted by the laws and regulations of the country or region, and where there are stricter requirements in the country or region, comply with their provisions. If the requirements of these Measures are stricter than the relevant provisions of the country or region, but the laws of the country or region prohibit or restrict the implementation of these Measures by overseas branches and subsidiaries, the financial institution shall take appropriate measures to deal with the risks of money laundering and terrorist financing, and report to the Chinese Bank.
Chapter II Customer Due Diligence
Section 1 General Provisions
Article 7 Where a financial institution suspects that a customer and its transactions are suspected of money laundering or terrorist financing during the period of establishing a business relationship with a customer, handling one-time transactions of a specified amount or the existence of a business relationship, or has doubts about the authenticity, validity or completeness of the customer's identity information previously obtained, it shall carry out customer due diligence and employ the following due diligence measures:
(1) Identifying the customer's identity and verifying the customer's identity through reliable and independent supporting materials, data, or information;
(2) Understand the purpose and nature of the customer's establishment of business relationships and transactions, and obtain relevant information according to the risk situation;
(3) For situations where the risk of money laundering or terrorist financing is relatively high, understand the source and use of the customer's funds, and adopt enhanced due diligence measures based on the risk situation;
(4) During the existence of the business relationship, take continuous due diligence measures for the customer, review the customer's status and its transactions, and confirm that the various services and transactions provided to the customer are in line with the financial institution's understanding of the customer's identity background, business needs, risk status, and the source and use of funds;
(5) Where the customer is a legal person or an unincorporated organization, identify and employ reasonable measures to verify the beneficial owner of the customer.
Financial institutions should determine the extent and specific methods of customer due diligence measures based on the differentiation of risk profiles, and should not adopt due diligence measures that are clearly inconsistent with the risk profile, so as to grasp the balance between risk prevention and service optimization.
Article 8 Financial institutions shall not provide services or conduct transactions with customers with whom they are unidentified, shall not open anonymous or pseudonymous accounts for customers, and shall not open accounts for customers who fraudulently use the identity of others.
Article 9 When handling the following business, financial institutions such as development financial institutions, policy banks, commercial banks, rural cooperative banks, rural credit cooperatives, village and township banks, and institutions engaged in foreign exchange business shall carry out customer due diligence, register basic information on the identity of customers, and retain copies or photocopy copies of the customer's valid identity documents or other identification documents:
(1) Establishing a business relationship with a customer by opening an account or through other means stipulated in an agreement;
(2) Providing one-time transactions such as cash remittance, cash exchange, bill redemption, physical precious metal trading, and sale of various financial products for customers who do not open an account with the institution, and the transaction amount is more than 50,000 yuan or the equivalent value of foreign currency is more than 10,000 US dollars.
Article 10 Where commercial banks, rural cooperative banks, rural credit cooperatives, village and township banks and other financial institutions handle cash deposits and withdrawals of a single RMB of more than 50,000 yuan or a foreign currency equivalent of MORE than 10,000 US dollars for natural person customers, they shall identify and verify the identity of the customers, understand and register the source or purpose of the funds.
Article 11 When financial institutions provide safe deposit box services, they shall know the actual user of the safe deposit box, register the name, contact information, valid identity document or other identification document type, number and validity period of the actual user, and retain a copy or photocopy of the actual user's valid identity document or other identification documents.
Article 12 When securities companies, futures companies, securities investment fund management companies and other institutions engaged in fund sales business handle the following business for customers, they shall carry out customer due diligence, register the basic information of the customer's identity, and retain copies or photocopies of the customer's valid identity documents or other identification documents:
(1) brokerage business;
(2) asset management business;
(3) Selling various types of financial products to customers who do not open accounts with the institution and the transaction amount is more than RMB50,000 or the equivalent in foreign currency of more than US$10,000;
(4) Credit trading businesses such as margin financing, stock pledges, and agreed repurchases;
(5) over-the-counter business such as over-the-counter derivatives trading;
(6) Underwriting and sponsorship, financial advisory for mergers and acquisitions and restructuring of listed companies, entrusted management of corporate bonds, recommendation of unlisted public companies, asset securitization and other businesses;
(7) other securities businesses prescribed by the Chinese Min min bank and the China Securities Regulatory Commission that shall carry out customer due diligence.
Article 13 When concluding a life insurance contract and an insurance contract of an investment nature with a customer, an insurance company shall carry out due diligence of the customer to confirm the relationship between the applicant and the insured, as well as the relationship between the insured and the beneficiary, register the basic information of the identity of the applicant, and retain copies or photocopy of the valid identity documents or other identification documents of the applicant; identify and verify the identity of the insured and beneficiary, and register the name or name, contact information, and contact information of the insured or beneficiary. The type, number and validity period of valid identity documents or other identification documents, and retain copies or photocopys of the insured or beneficiary's valid identity documents or other identification documents. When the above-mentioned insurance contract does not explicitly designate the beneficiary, but appoints the beneficiary through characteristic description, statutory succession or other means, the insurance company shall identify and verify the identity of the beneficiary when clarifying the identity of the beneficiary or compensating or paying insurance benefits.
For property insurance contracts with insurance premiums of more than RMB50,000 or more or equivalent in foreign currency of US$10,000 or more, and personal insurance contracts such as health insurance and accident insurance, the insurance company shall, when concluding an insurance contract with the customer, identify and verify the identity of the applicant and the insured, and register the name or name, contact information, valid identity document or other identification documents of the applicant, the insured and the beneficiary, and the type, number and validity period. And retain copies or photocopys of the applicant's valid identity documents or other identification documents.
Article 14 When the customer applies for the termination of the insurance contract, the reduction of insurance or the application for the loan of the insurance policy, if the refunded insurance premium or the loan amount provided is more than RMB 10,000 or the equivalent of foreign currency is more than 1,000 US dollars, the insurance company shall require the applicant to present the insurance contract or insurance certificate, verify the identity of the applicant, register the reason for the surrender, reduction or loan of the policy, refund or issue the insurance premium to the insured's own account, and if it is impossible to refund or issue the insurance premium to the insured's own account in case of special circumstances, Reasons are required to be registered and approved by senior management.
Article 15 For life insurance contracts and other insurance contracts of an investment nature, when compensating or paying insurance premiums, the insurance company shall verify the identity of the insured and the beneficiary, and retain copies or photocopy of the beneficiary's valid identity documents or other identification documents.
For property insurance contracts and personal insurance contracts such as health insurance and accident insurance, when the insured or beneficiary requests compensation from the insurance company, if the amount is more than RMB 50,000 or the equivalent value of foreign currency is more than 10,000 US dollars, the insurance company shall identify and verify the identity of the insured or beneficiary, and register the name or title, contact information, valid identity document or other identification documents of the insured or beneficiary, such as the type, number and validity period of the insured or beneficiary. And retain copies or photocopys of the insured or beneficiary's valid identity documents or other identification documents.
The insurance company shall pay the insurance premium to the beneficiary of the policy, the insured or the account of the designated payee. Where the insured or beneficiary requests payment of the insurance premium to a third party other than the insured, beneficiary or designated payee, the insurance company shall confirm the relationship between the insured and the actual payee, or the relationship between the beneficiary and the actual payee, identify and verify the identity of the actual payee, and register the name or name, contact information, valid identity document or other type, number and validity period of the actual payee. And retain copies or photocopys of the actual payee's valid identity documents or other identification documents.
Article 16 When concluding a pension security management contract with a customer, an insurance company shall identify and verify the identity of the client, register the basic information of the client's identity, and retain copies or photocopys of the client's valid identity documents or other identification documents; when handling the collection of funds, if the amount is more than 50,000 yuan per transaction or the equivalent value of more than 10,000 US dollars in foreign currency, the insurance company shall identify and verify the identity of the beneficiary.
Article 17 When handling the following business, non-bank payment institutions shall carry out customer due diligence, register the basic information of customer identity, and retain copies or photocopys of customers' valid identity documents or other identity documents:
(1) Establishing a business relationship with a customer by opening a payment account or other means, as well as selling a registered prepaid card to the customer or selling an underling prepaid card at one time of 10,000 yuan or more;
(2) Processing payment transactions for customers who do not open a payment account with the institution through methods such as signing a contract or tying a card, and the transaction amount is more than RMB 10,000 yuan or the equivalent in foreign currency of MORE than US$1,000, or the cumulative amount of bilateral receipt and payment of funds within 30 days is more than RMB 50,000 or the equivalent value of foreign currency is more than 10,000 US dollars;
(3) Other circumstances stipulated by the Chinese Bank.
Article 18 Banks and non-bank payment institutions providing acquiring services to special merchants shall carry out customer due diligence on special merchants, and register the basic information on the identity of special merchants and their legal representatives or responsible persons, and retain copies or photocopy of the valid identity documents or other identification documents of special merchants and their legal representatives or responsible persons.
Article 19 When establishing a trust or handling the transfer of the beneficiary right to the trust for its clients, a trust company shall identify and verify the identity of the trustor, understand the source of the trust property, register the basic information on the identity of the trustor and the beneficiary, and retain copies or photocopy of the client's valid identity documents or other identification documents.
Article 20 Where a customer's funds are trust funds or property belonging to trust property, when a financial institution establishes a business relationship with a customer or provides a one-time transaction of a specified amount or more, it shall identify the identity of the trustor, trustee, beneficiary, and other natural persons who ultimately effectively control the trust property, and register their names, titles, and contact information.
Article 21 Insurance asset management companies, financial asset management companies, enterprise group finance companies, financial leasing companies, auto finance companies, consumer finance companies, currency brokerage companies, loan companies, wealth management companies, and other financial institutions determined by the Chinese Min bank shall, when establishing business relations with customers, identify and verify the identity of customers, register the basic information of customer identity, and retain copies or photocopies of customers' valid identity documents or other identification documents.
When financial institutions carry out the above-mentioned business through other institutions, they shall comply with the provisions of Article 39 of these Measures.
Article 22 When a financial institution carries out customer due diligence, if the customer is a legal person or an unincorporated organization, it shall identify and verify the identity of the customer, understand the nature of the customer's business, ownership and control structure, identify and take reasonable measures to verify the beneficial owner of the customer, that is, one or more natural persons who ultimately own or actually control the legal person or unincorporated organization through the following means:
(1) Natural persons who directly or indirectly own 25% or more of the equity or partnership rights and interests of a legal person or unincorporated organization;
(2) Natural persons who, alone or jointly, exercise actual control over legal persons or unincorporated organizations, including but not limited to exercising control through methods such as agreements and family relationships, such as deciding on the appointment and removal of directors or senior management personnel, deciding on the formulation or implementation of major business or management decisions, deciding on financial revenue and expenditure, and actually disposing of important assets or major funds for a long time;
(3) Natural persons who directly or indirectly enjoy the right to 25% or more (inclusive) of the benefits of a legal person or unincorporated organization.
Financial institutions shall comprehensively use the above three methods to identify and verify the beneficial owners of customers, and when the beneficiary owners cannot be identified using the above methods, identify the senior management of legal persons or unincorporated organizations.
Article 23 Where the beneficiary of a policy in a life insurance contract is a legal person or an unincorporated organization and has a relatively high risk situation, the insurance company shall take enhanced due diligence measures when compensating or paying insurance premiums, and identify and take reasonable measures to verify the beneficial owners of the beneficiaries of the insurance policy.
Article 24 Financial institutions shall verify the identity of customers through reliable and independent supporting materials, data or information, including one or more of the following methods:
(1) Verifying the identity of customers through information obtained through public security, market supervision and management, civil affairs, taxation, immigration management, or other open government channels;
(2) Verifying the identity of customers through information officially certified by foreign government agencies, international organizations, etc.;
(3) The customer supplements other identity materials or supporting materials;
(4) other sources of information recognized by the Chinese Min bank.
When a bank performs its customer due diligence obligations, if it is necessary to verify the second-generation resident identity card of the relevant natural person in accordance with the provisions of laws, administrative regulations and departmental rules, it shall conduct verification through the network verification citizenship information system established by the Chinese Bank.
Article 25 A financial institution shall verify the identity of the customer and its beneficial owner when establishing a business relationship or handling a one-time transaction. In the case of effective management of money laundering and terrorist financing risks, for normal transactions that are difficult to interrupt, financial institutions can complete the verification of the identity of customers and their beneficial owners as soon as possible after establishing a business relationship. Where a financial institution handles business for a client before completing the verification of the identity of the client and its beneficial owner, it shall take appropriate risk management measures.
Article 26: Financial institutions shall adopt reasonable means to confirm the existence of an agency relationship, and when taking customer due diligence measures against the principal in accordance with the relevant requirements of these Measures, they shall identify and verify the identity of the agent, register the agent's name or name, contact information, valid identity documents or other types and numbers of identity documents, and retain copies or photocopies of the agent's valid identity documents or other identification documents.
Article 27 When establishing a business relationship with a customer, a financial institution shall, on the basis of the information obtained through the customer's due diligence, promptly assess the customer's risk, divide the risk level, and determine the frequency and method of regularly reviewing the customer's identity during the business existence period according to the customer's risk status. For customers with the highest risk level of money laundering or terrorist financing, financial institutions shall conduct audits at least once a year.
Financial institutions shall continue to pay attention to changes in customers' risk status, transaction status and identity information, and promptly adjust the risk level of customers' money laundering and terrorist financing.
Article 28 During the period of existence of business between financial institutions and customers, they shall continue to pay attention to and review the customer's identity status and transaction situation, and when the following circumstances occur, the financial institution shall review the customer identity information saved by the institution, and promptly update or supplement the customer's identity document or other identity documents, identity information or other materials to confirm that the various services and transactions provided to the customer are in line with the financial institution's understanding of the customer's identity background, business needs, risk status, and the source and use of the customer's funds:
(1) The customer's relevant behavior or transactions are abnormal, or the customer's risk status changes;
(2) Where the financial institution doubts the authenticity, validity, or completeness of the customer's identity information previously obtained;
(3) The customer requests a change in name or title, identity document or other type of identity document, ID card number, business scope, legal representative or beneficial owner;
(4) The customer applies to change the insurance contract of the applicant, the insured or the beneficiary;
(5) The identity document or other identification document previously submitted by the customer has passed the validity period;
(6) Others that need to pay attention to and review the customer's identity status and transaction situation.
If the identity document or other identification document previously submitted by the customer has passed the validity period, and the financial institution has performed the necessary notification procedures, and the customer has not updated it within a reasonable period of time and has not put forward reasonable reasons, the financial institution shall suspend the handling of business for the customer.
Article 29: When establishing a business relationship with a customer or during the duration of its business, financial institutions comprehensively consider factors such as customer characteristics, business relationships, transaction purposes, nature of transactions, sources of funds, and uses, and where there are situations with relatively high risks of money laundering or terrorist financing, or where the customer is a suspected money laundering or terrorist financing or related criminal personnel investigated or released by the national judicial, law enforcement, and supervision organs, strengthened due diligence measures shall be employed on the basis of the risk situation.
Article 30: For situations with high risks of money laundering or terrorist financing and high-risk customers, financial institutions shall employ one or more of the following enhanced due diligence measures matching the risk circumstances:
(1) Obtain relevant information on business relationships, the purpose and nature of transactions, the source and purpose of funds, and, when necessary, require customers to provide supporting materials and verify them;
(2) Understand the customer's economic situation or business situation through on-site visits and other means;
(3) Strengthen the monitoring and analysis of customers and their transactions;
(d) increase the frequency of review and update of information on customers and their beneficial owners;
(5) To establish or maintain a business relationship with a customer, or to handle business for a customer, the approval of senior management is required.
Where, after adopting enhanced due diligence measures, a financial institution deems that it is necessary to risk manage a customer's money laundering or terrorist financing risks, it shall impose reasonable restrictions on the customer's transaction methods, transaction scale, transaction frequency, etc., and if it is found that the customer's money laundering or terrorist financing risk exceeds the financial institution's risk management capabilities, it shall refuse to trade or terminate the established business relationship.
Article 31: Where financial institutions refer to the following information, combined with customer characteristics, business relationships, or the purpose and nature of the transaction, and have a risk assessment and sufficient reasons to judge that the risk of money laundering and terrorist financing of a certain type of customer, business relationship, or transaction is low, they may employ matching simplified due diligence measures:
(1) National money laundering risk assessment report;
(2) Relevant provisions and guidelines on anti-money laundering, counter-terrorist financing and account management, risk warnings, analysis reports on types of money laundering and risk assessment reports issued by Chinese Min min bank;
(3) Where other laws or administrative regulations have relevant provisions.
When financial institutions adopt simplified due diligence measures, they shall at least identify and verify the identity of the customer, register the customer's name or title, contact information, the type, number and validity period of valid identity documents or other identification documents, and retain the identity information necessary in the process of customer due diligence. For customers, business relationships or transactions that have adopted simplified due diligence measures, financial institutions shall periodically review their risk profile and adjust the scope of services and business functions provided according to the level of risk; when there is a suspicion or high risk of money laundering or terrorist financing in the customer, business relationship or transaction, the financial institution shall not adopt simplified due diligence measures.
Article 32 Where a financial institution is unable to complete the customer due diligence measures provided for in these Measures, it shall refuse to establish a business relationship, adopt necessary restrictive measures or refuse to trade, or terminate the established business relationship, and submit a suspicious transaction report based on the risk situation.
Article 33: If it is suspected that a customer is suspected of money laundering or terrorist financing, and carrying out customer due diligence will lead to the occurrence of a leak, the financial institution may not carry out customer due diligence, but shall submit a suspicious transaction report.
Section 2: Other Provisions
Article 34: When a financial institution establishes an agency bank or similar business relationship with an overseas financial institution, or accepts a commission to provide domestic securities and futures transactions for an overseas brokerage institution or its clients, it shall understand the risk situation of money laundering and terrorist financing in the country or region where the foreign institution is located, fully collect information on the nature, reputation, internal control, acceptance of supervision and investigation of the foreign institution's agency business, and assess the circumstances of the foreign institution's acceptance of anti-money laundering and counter-terrorist financing supervision and investigation, as well as the soundness and effectiveness of anti-money laundering and anti-terrorist financing measures, clarify the responsibilities of the institution and foreign institutions in terms of customer due diligence, customer identity information and transaction record keeping.
When a financial institution establishes a correspondent bank or similar business relationship with an overseas financial institution, or accepts a commission to provide domestic securities and futures trading for an overseas brokerage institution or its customers, it shall obtain the approval of the board of directors or the senior management responsible to the board of directors. Financial institutions shall not establish correspondent banks or similar business relationships with shell banks, and shall ensure that correspondent banks do not provide accounts for use by shell banks.
Financial institutions shall continue to pay attention to and review the situation of foreign institutions accepting anti-money laundering and anti-terrorist financing supervision, as well as the risk status of money laundering and terrorist financing in the country or region where the foreign institution is located, assess the risk level of overseas institutions, and implement dynamic management.
Article 35 A financial institution shall take reasonable measures to determine whether the customer and its beneficial owner are specific related persons of foreign dignitaries, senior managers of international organizations, foreign dignitaries or senior managers of international organizations. If the customer or its beneficial owner is the above person, the financial institution shall take risk management measures to understand the source and use of the funds or property of the customer and its beneficial owner, establish and maintain a business relationship with the customer and obtain the approval of senior management, and take enhanced continuous monitoring measures for the customer and the business relationship.
If the beneficiary of a life insurance policy or its beneficial owner is a specific related person of a foreign dignitary, senior manager of an international organization, a foreign dignitary or a senior manager of an international organization, the insurance company shall obtain the approval of senior management when compensating or paying insurance benefits, and take enhanced due diligence measures against the insured and the business relationship.
Article 36 When financial institutions and institutions engaged in foreign exchange business send funds to the foreign market for customers, they shall register the name or name, account number, domicile and name or account number of the recipient of the remitter, retain the above information in the exchange voucher or related information system, and provide the sender's name, name, account number, domicile and other information to the overseas institution receiving the remittance. If the sender has not opened an account with the institution and the financial institution is unable to register the remitter's account, it may register and provide other relevant information to the overseas institution receiving the remittance to ensure that the transaction can be tracked and audited.
Where financial institutions and institutions engaged in foreign exchange business send funds to foreign exchange for customers in a single sum of RMB 5,000 or the equivalent of more than US$1,000 in foreign currency, they shall verify the identity of the remitter and ensure the accuracy of the remitter's information. Where it is discovered that a customer is suspected of money laundering or terrorist financing, regardless of the amount of funds remitted, the financial institution shall take reasonable measures to verify the identity of the remitter.
When a financial institution acts as an intermediary in cross-border remittance business, it shall fully transmit the information on the sender and recipient attached to the remittance business, take reasonable measures to identify whether the necessary information of the sender and the recipient is missing, and clarify the applicable circumstances for the implementation, refusal or suspension of the above remittance business and the corresponding follow-up measures according to the risk situation.
Where a financial institution receiving foreign exchange deposits discovers that the name or name, account number, domicile and other information of the sender is missing, it shall request the overseas institution to supplement it. If the remitter does not open an account with the overseas institution handling the remittance business, and the domestic financial institution receiving the remittance is unable to register the remitter's account, it may register other relevant information to ensure that the transaction can be tracked and audited.
Article 37 Where financial institutions and institutions engaged in foreign exchange business handle domestic remittances for their clients, they shall refer to the requirements of the first and second paragraphs of Article 36 of these Measures. If the remittance institution is unable to provide the sender information to the institution receiving the remittance in a timely manner, it shall at least provide the sender's account number or other information that can ensure that the transaction can be traced and audited, and provide the sender information to the institution receiving the remittance or the relevant competent department when necessary.
Where financial institutions and institutions engaged in exchange business do not meet the requirements of Article 36 and Paragraph 1 of Article 37 of these Measures concerning remittance business, they must not handle remittance business for customers. Where financial institutions and institutions engaged in exchange business carry out remittance business through their domestic or foreign branches, subsidiaries or agencies, they shall ensure that their domestic and foreign branches, subsidiaries or agencies comply with the relevant provisions on remittance business.
Article 38: When financial institutions use information and communication technologies such as the Internet and mobile communications to establish business relationships with customers or provide financial services to customers in non-face-to-face forms in accordance with law, they shall establish effective customer identity authentication mechanisms, and identify and verify the identity of customers through effective measures to confirm the authenticity of the customer's identity and the reasonableness of the transaction.
Article 39 Where a financial institution carries out the due diligence measures in items 1, 2 and 5 of the first paragraph of Article 7 of these Measures through a third party, it shall meet the following requirements and bear the responsibility for failing to perform its customer due diligence obligations:
(1) Third parties accept anti-money laundering and counter-terrorist financing supervision or monitoring;
(2) Assess the risk profile of the third party and its ability to perform anti-money laundering and counter-terrorist financing obligations, and ensure that the third party adopts customer due diligence, customer identity information and transaction record preservation measures in accordance with the relevant requirements of anti-money laundering and counter-terrorist financing laws and regulations and these Measures;
(c) the financial institution is able to immediately obtain the necessary information for customer due diligence from a third party;
(4) When necessary, the financial institution can immediately obtain copies or photocopys of the identity documents or other identification documents and other materials obtained by the third party to carry out customer due diligence.
The third party shall perform the corresponding customer due diligence obligations in strict accordance with the provisions of the law and the contract, and provide the necessary customer identity information to the financial institution; if the financial institution has doubts about the authenticity, accuracy or completeness of the customer identity information, or suspects that the customer is suspected of money laundering or terrorist financing, the third party shall cooperate with the financial institution to carry out customer due diligence. Where a third party fails to cooperate with the financial institution in performing its customer due diligence obligations in accordance with the regulations, it shall bear the corresponding responsibility.
Where a financial institution identifies a customer through a third party other than a financial institution, it shall comply with the requirements of items 2 to 4 of paragraph 1.
Article 40 Financial institutions shall cooperate with each other in carrying out customer due diligence.
Article 41: Financial institutions shall establish and complete working mechanisms to promptly obtain lists of organizations and persons suspected of terrorist activities, as well as lists of other persons suspected of money laundering and related crimes that the Chinese Bank requires attention to. Where there are reasonable grounds to suspect that the Client or his or her counterparties, as well as the Client or his or her counterparties' funds or other assets, are linked to the List, corresponding due diligence and risk management measures shall be taken. Where laws, administrative regulations, or rules provide otherwise, follow those provisions.
Article 42: Financial institutions shall establish and complete working mechanisms to promptly obtain lists of high-risk countries or regions issued by international anti-money laundering organizations and relevant mainland departments, as well as countries or regions for enhanced monitoring. For customers or transactions from high-risk countries or regions, financial institutions should take enhanced due diligence measures and necessary risk management measures in light of their business relationships and the risk profile of the transaction. For customers from countries or regions where monitoring is strengthened, financial institutions should pay attention to the risk situation of the customer's country or region when conducting customer due diligence and classifying customer risk levels.
Where a financial institution conducts customer due diligence through an overseas third party, it shall fully consider the risk situation of the country or region where the third party is located, and shall not conduct customer due diligence through a third party from a high-risk country or region.
Article 43 When carrying out customer due diligence, financial institutions shall report the following suspicious acts to the China Anti-Money Laundering Monitoring and Analysis Center and the local branches of Chinese Min bank according to the risk situation:
(1) The customer refuses to provide a valid identity document or other identification document;
(2) There are clear grounds to suspect that the purpose and nature of the customer's establishment of business relationships are related to illegal or criminal activities such as money laundering and terrorist financing;
(3) Where, after making a request to a foreign institution that has remitted funds into China, it is still unable to obtain the name or name, account number, and domicile of the remitter in its entirety;
(4) After taking necessary measures, there is still doubt about the authenticity, validity, or completeness of the customer's identity information previously obtained;
(5) Other suspicious conduct is discovered when performing customer due diligence obligations.
The above-mentioned suspicious acts reported by financial institutions shall be carried out in accordance with the relevant provisions of the Chinese Minmin Bank on the reporting of large transactions and suspicious transactions of financial institutions.
Chapter III Preservation of Customer Identity Information and Transaction Records
Article 44 The customer identity materials that financial institutions shall keep include records of customer identity information and all kinds of records and materials reflecting the financial institutions' efforts to carry out customer due diligence.
The transaction records that financial institutions shall keep include data and information on each transaction, business vouchers, account books, and contracts, business vouchers, documents, business correspondence, and other materials required by relevant provisions that reflect the true situation of the transaction.
Article 45 Financial institutions shall adopt necessary management measures and technical measures to gradually realize the complete and accurate preservation of customer identity information and transaction information in electronic means, protect trade secrets and personal information in accordance with law, prevent the loss and destruction of customer identity information and transaction records, and prevent the leakage of customer identity information and transaction information.
The retention methods and management mechanisms for customer identity information and transaction records of financial institutions shall ensure that each transaction is sufficient to reproduce and trace each transaction, so as to facilitate the anti-money laundering work of financial institutions, as well as anti-money laundering investigation and supervision and management.
Article 46 Financial institutions shall keep customer identity information and transaction records within the following periods:
(1) Customer identity information is kept for at least 5 years after the end of the business relationship or the end of a one-time transaction;
(2) Transaction records shall be kept for at least 5 years after the end of the transaction.
If the customer's identity information and transaction records involve suspicious transaction activities that are being investigated by anti-money laundering, and the anti-money laundering investigation work has not been completed when the minimum retention period provided for in the preceding paragraph expires, the financial institution shall save the relevant customer identity information and transaction records until the end of the anti-money laundering investigation.
Where there are customer identity information or transaction records with different retention periods on the same medium, they shall be kept according to the maximum storage period. Where the same customer identity information or transaction records are kept in different media, the customer identity information or transaction records of at least one medium shall be kept in accordance with the above-mentioned time limit.
Where laws and administrative regulations have a longer retention period for customer identity information and transaction records, follow those provisions.
Article 47 When a financial institution goes bankrupt or is dissolved, it shall transfer the customer identity information, transaction records, and media containing customer identity information and transaction records to the institution designated by the Chinese Min bank, the China Banking and Insurance Regulatory Commission or the China Securities Regulatory Commission.
Chapter IV: Legal Liability
Article 48 Where a financial institution violates these Measures, the Chinese Bank shall punish it in accordance with the provisions of Articles 31 and 32 of the Anti-Money Laundering Law of the People's Republic of China;
(1) Ordering financial institutions to suspend business for rectification or revoking their business licenses;
(2) To revoke the qualifications of directors, senior management personnel and other directly responsible personnel of financial institutions and to prohibit them from engaging in work related to the financial industry.
Where the county (city) branch of the Chinese Minmin Bank discovers that a financial institution has violated these Measures, it shall report to the branch of the Chinese Minmin Bank at the level above, and the branch of the Chinese Minmin Bank at the level above shall impose a penalty or make a recommendation in accordance with the provisions of the preceding paragraph.
Chapter V Supplementary Provisions
Article 49 These Measures shall not apply to the performance of customer due diligence obligations by insurance companies when handling reinsurance business.
Article 50: The meanings of the relevant terms used in these Measures are as follows:
The basic information of the identity of a natural person customer refers to the name, gender, nationality, occupation, place of residence or work unit address, contact information, the type, number and validity period of identity documents or other identity documents, and the customer's domicile is inconsistent with the habitual residence, the customer's habitual residence shall prevail.
The basic identity information of a legal person, unincorporated organization, or individual industrial and commercial household customer refers to the name, domicile, business scope, and the name, number, and validity period of the license, certificate, or document that can prove that the customer has established or can carry out business or social activities in accordance with law; the name, identity document, or other identification document type, number, and validity period of the legal representative or responsible person and the authorized business personnel; and the type, number, and validity period of the beneficiary owner's name, address, identity document, or other identification document.
Article 51 These Measures shall be interpreted by the Chinese Minmin Bank in conjunction with the China Banking and Insurance Regulatory Commission and the China Securities Regulatory Commission. Where a financial institution fails to meet the relevant customer due diligence requirements of these Measures for existing customers who have established business relationships or conducted transactions before the implementation of these Measures, it shall complete the due diligence of existing customers with higher risk or above within one year from the date of implementation of these Measures, and complete the due diligence of all existing customers within 2 years from the date of implementation of these Measures.
Article 52: These Measures take effect on March 1, 2022. The Measures for the Administration of Customer Identification and Customer Identification Information and Transaction Records of Financial Institutions (issued by Chinese Min Bank, China Banking Regulatory Commission, China Securities Regulatory Commission, and China Insurance Regulatory Commission [2007] No. 2) shall be abolished at the same time. Where other provisions on customer due diligence and customer identity information and transaction record preservation issued before the implementation of these Measures are inconsistent with these Measures, these Measures shall prevail.
"Financial Institutions Customer Due Diligence and Customer Identity Information and Transaction Record Preservation Management Measures" to answer reporters' questions
In order to improve the anti-money laundering supervision mechanism and further enhance the mainland's ability to prevent money laundering and terrorist financing risks, the Chinese Min min bank, the China Banking and Insurance Regulatory Commission and the China Securities Regulatory Commission recently jointly issued the "Administrative Measures for Customer Due Diligence and Customer Identity Information and Transaction Record Preservation of Financial Institutions" (hereinafter referred to as the "Measures"), which will come into effect from 1 March 2022. Responsible persons of relevant departments answered reporters' questions on relevant issues.
Q: What is the background of the promulgation of the Measures?
A: The Fourth Plenary Session of the 19th Central Committee of the Communist Party of China proposed to uphold and improve the socialist system with Chinese characteristics and promote the modernization of the national governance system and governance capabilities. The Opinions of the General Office of the State Council on Improving the Regulatory System and Mechanisms for Anti-Money Laundering, Counter-Terrorist Financing and Anti-Tax Evasion put forward clear requirements for giving play to the role of anti-money laundering in promoting the modernization of the national governance system and governance capacity, and maintaining economic and social security and stability. With the development and innovation of domestic financial business and the continuous changes in international anti-money laundering standards, the current "Administrative Measures for customer identification and customer identity information and transaction record preservation of financial institutions" needs to be further improved to give play to the role of anti-money laundering in the construction of a modern financial system and the expansion of two-way opening up of the financial industry.
Q: What is the significance of formulating the Measures?
A: First, the formulation of the Measures is conducive to conforming to the development of the financial industry and enhancing the mainland's ability to prevent money laundering and terrorist financing risks. In recent years, with the changes in financial products and business models, some new challenges have emerged in the anti-money laundering work of the financial industry, in order to enhance the mainland's ability to prevent money laundering and terrorist financing risks, it is necessary to further improve the anti-money laundering supervision system and strengthen the anti-money laundering supervision through the formulation of the Measures. Second, the formulation of the Measures is conducive to practicing the "risk-based" anti-money laundering concept and improving the level of anti-money laundering work of financial institutions. At present, the customer due diligence work of financial institutions does not fully reflect the concept of "risk-based", and it is necessary to further emphasize risk-based customer due diligence measures to improve the efficiency of financial services on the basis of preventing the use of the financial system to engage in criminal activities such as money laundering. Third, the formulation of the Measures is conducive to integrating with international standards for anti-money laundering. The International Assessment on Anti-Money Laundering (AML) believes that the mainland needs to further clarify the relevant requirements for customer due diligence and customer identity information and transaction record keeping of financial institutions, and continuously improve the anti-money laundering regulatory system.
Q: What are the main contents of the revision of the Measures?
Answer: (1) Adjust the name, style and scope of application of the Measures.
The first is to use the term "customer due diligence" instead of "customer identification" in the name and body of the regulations; second, the general provisions highlight the basic principle of "risk-based"; the third is to divide the customer due diligence in Chapter 2 into two sections, "General Provisions" and "Other Provisions", respectively, to clarify the general requirements for customer due diligence and the due diligence requirements in special circumstances; the fourth is to improve and expand the scope of application of the Measures, adding non-bank payment institutions, wealth management companies and various new financial institutions.
(2) The "risk-based" requirement is permeated into the Measures.
The first is to require obligated institutions to establish a clear customer acceptance policy; the second is to improve and emphasize the continuous due diligence provisions, requiring the integration of customer life cycle management into the requirements of continuous due diligence; the third is to increase the requirements for strengthening due diligence and simplifying due diligence, clarifying the applicable circumstances and corresponding measures; and the fourth is to improve the customer due diligence requirements of banking, securities, insurance, non-bank payment, trust, asset management and other industries according to the business development and risk status of each financial industry.
(3) Supplement and improve the relevant requirements for customer due diligence.
Complement and improve the requirements for wire transfers, beneficiary owner identification, due diligence through third parties, correspondent banks, high-risk countries or regions, new technologies (non-face-to-face conducting business), life insurance beneficiary identification, customer due diligence requirements, and timing of identity verification.
Source: China News Network, Bank of China, Qingdao Law Popularization