China Net Finance December 31 (Reporter Anran Zhu Ling) There are two important dates in the field of anti-money laundering in 2021.
One is June 1.
The "Anti-Money Laundering Law of the People's Republic of China (Draft Revision for Public Comment)" (referred to as "Draft Revision of Anti-Money Laundering Law") was released on this day.
The Draft Amendment to the Anti-Money Laundering Law has a total of 63 articles, which is nearly double the number of regulations compared with the 37 articles in the 2007 Anti-Money Laundering Law.
It also clearly stipulates that specific non-financial institutions shall perform anti-money laundering obligations in accordance with the relevant requirements of financial institutions when engaging in specific businesses.
One is December 31.
In accordance with the requirements of the notice issued by the Anti-Money Laundering Bureau of the People’s Bank of China on the issuance of the Guidelines for the Self-Assessment of the Risks of Legal Person Financial Institutions on Money Laundering and Terrorist Financing (referred to as the “Guidelines”), legal person financial institutions shall formulate or update their institutions before December 31, 2021 Money laundering and terrorist financing risk self-assessment system to meet the overall requirements of the Guidelines.
537 fines and penalties a year focused on customer identification
"Whoever is the customer must bear the responsibility of customer identification."
In the Caixin report, a person who participated in the Draft Amendment to the Anti-Money Laundering Law was quoted.
Prior to April 2021, the Central Bank issued the "Measures for the Supervision and Administration of Anti-Money Laundering and Anti-terrorist Financing of Financial Institutions" (referred to as the "Measures"), adding non-bank payment institutions, online microfinance companies, and consumer finance to the scope of application. Types of organizations such as companies.
It is understood that anti-money laundering and anti-terrorist financing work has been included in the agenda of the State Council’s Financial Stability and Development Committee.
The regulatory authorities continue to increase anti-money laundering and anti-terrorist financing supervision, not only in broadening the scope of anti-money laundering supervision, but also in the intensity of penalties.
Recently, the "China Anti-Money Laundering Report 2020" released by the Central Bank showed that the People's Bank of China carried out anti-money laundering enforcement inspections on 614 voluntary agencies throughout the year, 87% of which were legal entities. 537 anti-money laundering agencies were punished in accordance with the law and fines amounted to 526 million. Yuan, 1,000 individuals who violated the regulations were punished, and the fine was 24.68 million yuan.
A reporter from Chinanet Finance noted that among these anti-money laundering fines, there are many large fines.
Take third-party payment as an example. Commercial Bank Credit, which was fined in April 2020, was fined 116 million yuan in a lump sum for 16 violations, setting a new record for paying fines.
In January 2021, Guotong Xingyi was fined 67.1 million yuan for 12 violations of laws and regulations, including failing to submit suspicious transaction reports as required.
From the point of view of the punished subjects, not only small and medium payment institutions, but also leading companies such as Tencent Tenpay.
In March 2020, Tenpay was fined by the Shenzhen Central Sub-branch of the People's Bank of China for failing to perform its customer identification obligations in accordance with regulations and failing to submit suspicious transaction reports in accordance with regulations.
It is not difficult to find that customer identification and suspicious transaction identification are the most frequent reasons for tickets.
"There are many factors here. For example, it is difficult to identify suspicious transactions. The system will automatically perform some basic identification tasks, but it still cannot completely get rid of human identification. However, there are few compliance personnel and heavy workload. The final identification is easy to become a formality. ." A compliance person of a financial institution said in an interview.
With the strengthening of anti-money laundering supervision, customer identification has also been upgraded to customer due diligence.
In the "Measures for the Supervision and Administration of Anti-Money Laundering and Anti-Terrorist Financing of Financial Institutions", the requirement for financial institutions to "Know Your Customer" (KYC) is fully transformed and upgraded to "Customer Due Diligence (CDD)" .
"Only from the meaning of the text, you can see the difference between the two." Some insiders commented.
From rule-based to risk-based
In the "Draft Revision of the Anti-Money Laundering Law", "risk-based" runs through the entire text.
It is understood that anti-money laundering supervision in Western developed countries places more emphasis on the "risk-based approach", requiring financial institutions to put themselves and money laundering risks in a system, and financial institutions and supervisors jointly face and control money laundering risks.
In recent years, China has also begun to learn from international experience to explore the practice of "risk-based" in order to enhance the effectiveness of anti-money laundering supervision.
On January 15, 2021, the Anti-Money Laundering Bureau of the People's Bank of China issued a notice on the issuance of the "Guidelines for the Self-Assessment of Money Laundering and Terrorist Financing Risks of Legal Person Financial Institutions", requiring legal person financial institutions to formulate or update their own money laundering institutions before December 31, 2021 And the terrorist financing risk self-assessment system to meet the overall requirements of the Guidelines, and complete the first self-assessment based on the new system before December 31, 2022.
The comprehensive establishment of the "self-assessment system" is a good embodiment of the "risk-based" regulatory thinking.
In the past, domestic financial institutions only met the compliance requirements listed by the regulatory authorities one by one, even if they completed their anti-money laundering obligations, they were called "formal compliance."
"Under the current situation, the rule-based approach is increasingly showing its drawbacks. Complying with the development trend of anti-money laundering in the world and gradually realizing the transition from rule-based to risk-based is the only way for China's anti-money laundering work. Wang Jing, deputy director of the Anti-Money Laundering Bureau of the Central Bank, once publicly stated at the 10th China Anti-Money Laundering Summit Forum in 2020.
It is worth mentioning that financial institutions have also encountered some challenges in the self-assessment of money laundering risks.
Huang Yiqing, product director of Suoxinda, gave an example to a reporter from Chinanet.com: For example, the actual implementation of self-assessment work cannot be achieved without the support of specific business data.
However, various financial institutions will face more or less data quality problems, such as irregular data standard code values, inconsistent attribute values of business entities in various systems, and incomplete business data (especially manual ledgers).
To solve these problems, the information system needs to provide corresponding functions for assistance, and it also needs to integrate resources in the industry from a higher level.
As a Hong Kong-listed financial AI big data solution provider, Suoxinda launched the IRAP (Money Laundering Risk Self-Assessment) product to provide services for financial institutions to solve the money laundering risk self-assessment.
Fintech "double-edged sword"
In the field of anti-money laundering, financial technology can be described as a "double-edged sword."
In the "40 Recommendations" of the Financial Action Task Force (FATF), Article 15 specifically refers to "new technology."
FATF requires countries and financial institutions to identify and evaluate money laundering and terrorist financing risks arising from the development of new products, new businesses, new transmission channels, and the use of new or updated technologies for new products and existing products.
Obligatory agencies are required to conduct risk assessments before using such products, businesses and technologies, and adopt appropriate measures to manage and reduce risks.
The widespread application of new technologies has caused changes in financial business models and brought challenges to the prevention and control of money laundering risks for financial institutions.
Chao Kejian, director of the Anti-Money Laundering Bureau of the Central Bank, has publicly stated that it is necessary to vigorously improve the level of financial technology in the field of anti-money laundering and anti-terrorist financing, and further strengthen cooperation with the technology industry and financial institutions to promote financial technology and regulatory technology in anti-money laundering and anti-terrorist financing. Field application and development.
In fact, the application of new technologies in the compliance and risk control management of voluntary agencies involves a very wide range.
For example, financial institutions use big data, machine learning and other technologies to optimize risk prevention and control data indicators and analysis models, accurately characterize customer risk, effectively identify high-risk transactions, and improve the accuracy of financial business risk prediction and identification; risk technical prevention The mechanism is embedded in the financial business process and so on.
The other side that cannot be ignored is that financial technology is also becoming the hardest hit area for money laundering.
Zhang Zhongyuan of the Anti-Money Laundering Bureau of the Central Bank said that a large number of virtual assets have been used in illegal activities such as money laundering.
Although China has always adopted an inclusive regulatory approach to financial technology, in the face of ICO financing, the People’s Bank of China, in conjunction with the Ministry of Public Security and other competent authorities, has strictly followed the principle of zero tolerance and full coverage to crack down on virtual asset trading platforms, Illegal financial activities such as ICO.