What’s new: China’s central bank issued draft rules Wednesday to toughen a crackdown on money laundering and place nonbank financial institutions under oversight.
Under the new rules, published for public comment, nonbank payment companies, internet microlenders and consumer finance companies will come under the same anti-money laundering supervision as other financial institutions.
The rules also set requirements for institutions’ internal controls and risk management to address money-laundering concerns.
What’s the context: Chinese regulators have ramped up efforts to crack down on money laundering following a wake-up call in 2019 when the international Financial Action Task Force (FATF) on money laundering highlighted flaws in China’s system.
In the first six months of 2020, the People’s Bank of China doled out penalties of more than 370 million yuan ($53.89 million) for money laundering violations, exceeding the total for all of 2019, data from the central bank showed.
Related: Cover Story: How China Is Racing to Catch Up With Money Launderers
Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bobsimison@caixin.com).
