The State Administration of Foreign Exchange (SAFE) published on Monday its detailed regulation on the management of large-volume foreign exchange transactions in financial institutions.
The regulation, effective since October 12, was issued to tighten the monitoring of suspicious foreign exchange transactions. It adds a new weapon to the Chinese financial authorities' arsenal in the war on money laundering.
The regulation provides detailed criteria for SAFE and public security agencies to assess transactions and identify those that are questionable. It sets out specific procedural rules to enable financial institutions and other authorities to handle suspicious cases more efficiently.
The regulation also clarifies the responsibilities of financial institutions, directing them to improve internal control mechanisms and assign specific groups or individuals to handle large-volume forex business.
It requires that they obtain credit information on forex clients and outlines their obligations in reporting and tracing suspected crimes.
Large-volume forex transactions are daily cash transactions of US$10,000 or more by an individual or an enterprise, as well as non-cash daily transactions that are worth US$100,000 or more by an individual or US$500,000 or more by an enterprise.
(China Daily October 27, 2004)
