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The State Administration of Foreign Exchange (SAFE) said Wednesday its local bureau in East China's Fujian Province recently made major achievements in combating money laundering and other illegal foreign exchange transactions.
SAFE lauded Fujian's achievements at a time when the foreign exchange watchdog is stepping up its efforts in blocking underground flow of foreign exchange, which has been undermining the financial authorities' capabilities of monitoring and managing the nation's foreign exchange affairs.
SAFE said its Fujian bureau co-operated with police and cracked three crimes of illegal foreign exchange transactions that involved banking officials in the province.
It is the first time SAFE has seized banking officials participating in illegal foreign exchange trade.
Police unearthed an underground bank and arrested 14 suspects. They also froze 22 accounts with outstanding balances worth 10 million yuan (US$1.2 million).
The forex authorities did not specify the number of banking officials involved, but said they assisted other suspects in depositing and trading the money.
SAFE also reported the closure of another major foreign exchange case in Fujian which also involved the cracking down of underground banks.
On August 25, the Fujian bureau of SAFE and local police attacked 18 underground trading houses and arrested 30 suspects, 11 of which were later sentenced one to six years in prison, the most serious punishment so far in China for underground banking.
SAFE said much of the underground foreign exchange trading in Fujian is related to Chinese business people who were trying to use the foreign exchange they obtained through "black" banks and investing the money as foreign investments, which enjoy preferential treatment.
(China Daily November 11, 2004)
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