Corruption-related money laundering tricks to covertly cut off the outflow channels of corrupt assets
The recent video conference on combating foreign exchange crimes released a set of data: Since 2017, the State Administration of Foreign Exchange and public security agencies have jointly cracked more than 300 cases of foreign exchange-type underground banks, and investigated and dealt with more than 6,000 cases of illegal foreign exchange transactions through underground banks.
In recent years, my country has continuously increased its supervision in the field of anti-money laundering.
As we all know, corruption crimes are closely related to money laundering crimes. Some corrupt elements handle affairs within the country, collect money abroad, and some transfer the stolen money abroad through underground banks in an attempt to conceal the truth.
As an important part of the "Skynet 2020" operation, in 2020, the People's Bank of China, together with the Ministry of Public Security and other relevant departments, will continue to carry out special operations to prevent and combat the use of offshore companies and underground banks to transfer illicit funds overseas.
Continued crackdowns and severe punishments on corruption-related money laundering will undoubtedly increase the cost of illegal economic benefits for corrupt elements and form a powerful deterrent.
In the practice of chasing and pursuing stolen goods, the anti-money laundering investigations carried out by foreign fugitives have enriched the methods and methods of foreign chasing and stolen stolen goods, which is conducive to effectively curbing the outflow channels of corruption crime proceeds, thereby squeezing the living space of the fugitives abroad.
Corruption crime and money laundering crime go hand in hand, and money laundering activities are constantly updated and more hidden
On August 31, 2020, the Intermediate People's Court of Yueyang City, Hunan Province publicly sentenced the defendant Peng Yaofeng to the crime of bribery and money laundering in the first instance, sentenced him to life imprisonment, deprived of political rights for life, and confiscated all personal property.
One of the reasons why this case has attracted attention is that Peng Yaofeng is the younger brother of "Hongtong officer" Peng Xufeng.
The details of the two persons colluding with each other in money laundering were also exposed in the court trial. According to Peng Xufeng’s arrangement, Peng Yaofeng converted the RMB 38,898,856 of Peng Xufeng’s bribes into U.S. dollars, euros, and Australian dollars through bank accounts of others under his actual control. His behavior has constituted a crime of money laundering.
Money laundering refers to deliberately concealing or concealing the source and nature of the proceeds of crime and its proceeds through transfers, conversions, etc., or assisting in the transfer or conversion of an asset of unknown origin under the premise of knowing that an asset originated from a predicate crime.
At present, corruption crimes and money laundering crimes go hand in hand, and the transfer of assets, especially bulk assets, by corrupt elements abroad is the main method of money laundering.
Article 191 of my country's Criminal Law clearly stipulates the crime of corruption and bribery as the predicate crime of money laundering crime.
In 2014, the People's Bank of China began to study the national money laundering risk assessment work, referring to the money laundering risk assessment guidelines issued by the FATF (Financial Action Task Force), and completed the first "China Money Laundering and Terrorist Financing Risk Assessment Report (2017)".
The report shows that corruption crimes have become one of the largest types of crimes for illegal gains in our country. Money laundering has covered up corruption to a certain extent and disrupted economic order.
According to the analysis of the sample database of sentenced cases from 2013 to 2015, corruption crimes accounted for 16.14% of the amount of money laundering predicate crimes, ranking second.
The money laundering risk of corruption crimes is rated as middle-to-high level, alongside drug crimes and fraud crimes, second only to illegal fund-raising crimes.
With the development of society, corruption-related money laundering behaviors are constantly updated and more concealed, mainly including the following five common methods: First, the use of financial services, including the extensive use of various banking services to conceal stolen money, and some cases also involve securities and insurance businesses ; The second is to invest in companies, including "dry shares" or anonymous shareholding in interested companies, and to use close relatives or close relatives to hold shares in interested companies; the third is to purchase or hold real estate, including personal or Close relatives hold foreign (including foreign) real estate in the name, actually occupy and use other people’s real estate, buy or sell real estate at a low price to earn the difference; the fourth is to use cash, such as directly accepting and using cash, or receiving cash for concealed storage; Transfer stolen money overseas through multiple channels, such as transferring stolen money to overseas accounts through underground banks, sending children and relatives to reside overseas, and transferring funds across borders in cash, split purchases of foreign exchange, and exchange of virtual currencies.
In reality, corruption-related money laundering is often linked with financial activities, so as to realize the transfer and disguise of corrupt assets and legalize it in form.
Among the "hundred red-pass personnel", Li Xiangdong, the former general manager of the data department of Sichuan Mobile and general manager of the wireless music operation center, who is still at large, opened an offshore account in Hong Kong to launder money and fled to Canada.
Many corrupt and fleeing individuals have developed a "strong interest" in offshore financial centers.
Corrupt elements use accounts or "shell companies" in offshore financial centers to transfer illegal assets abroad, and at the same time obtain foreign passports or permanent status through investment immigration, creating various obstacles to anti-corruption, escape and recovery.
Crack down on the use of offshore companies and underground banks to transfer stolen money and cut off the channel for outflow of corrupt assets
In order to prevent money laundering activities, maintain financial stability, and curb money laundering crimes and related crimes, my country formulated the Anti-Money Laundering Law of the People's Republic of China and came into effect on January 1, 2007.
Article 4 of the Anti-Money Laundering Law stipulates that the anti-money laundering administrative department of the State Council is responsible for the national anti-money laundering supervision and management.
The anti-money laundering administrative department of the State Council, relevant departments, agencies and judicial organs of the State Council shall cooperate with each other in anti-money laundering work.
As the State Council's anti-money laundering administrative department, the People's Bank of China has jointly carried out special operations against the use of offshore companies and underground banks to transfer illicit funds for six consecutive years with the Ministry of Public Security, the Supreme Court, the Supreme Procuratorate, and the State Administration of Foreign Exchange.
Data shows that in 2019, the People's Bank of China and the Administration of Foreign Exchange actively cooperated with the public security organs to carry out special crackdowns, cracking more than 440 major underground bank cases, arresting more than 1,200 criminal suspects, and destroying more than 1,100 criminal dens.
Since April 2015, the special action against the use of offshore companies and underground banks to transfer illicit funds overseas has been included in the “Skynet Operation” deployed by the Central Anti-Corruption Coordination Group. It can be seen that anti-money laundering is essential for anti-corruption. International pursuit of escaped and stolen goods is of great significance.
The State Administration of Foreign Exchange's "Detailed Rules for the Implementation of the Measures for the Administration of Individual Foreign Exchange" stipulates that the limit for each person to purchase foreign exchange each year is US$50,000.
The State Administration of Foreign Exchange and the General Administration of Customs "Interim Measures for the Administration of the Entry and Exit of Foreign Currency Banknotes" stipulate that those who carry foreign currency in excess of US$5,000 are required to apply for a "carry permit."
Therefore, if you want to transfer huge amounts of funds out of the country, you must launder money through underground banks or use offshore companies.
In 2019, the Hunan Provincial Public Security Bureau successfully smashed an underground bank gang that attempted to launder cross-border money for escaped "red communication personnel". The main suspect, Zhong Mou, was detained in accordance with the law.
The clues to this case were discovered by the Hunan Provincial Commission for Discipline Inspection during the pursuit of Peng Xufeng and transferred to the public security organ for investigation.
After Peng Xufeng, Jia Siyu and his wife absconded to the United States, they attempted to illegally transfer funds through the underground money laundering channel operated by Zhong and others. They were promptly discovered by the Hunan Provincial Office of Pursuit of Evasion and cracked down in accordance with the law.
"In this way, the channel for the outflow of corrupt assets is cut off, making it impossible for domestic illicit money to be transferred overseas through offshore companies and underground banks." Zhang Lei, a professor at the Institute of Criminal Law Science of Beijing Normal University, believes that, on the other hand, through offshore Companies and underground banks search for the whereabouts of stolen money that has been transferred overseas and the chain of evidence for the transfer of stolen money, providing an important channel for us to recover stolen money overseas.
In addition, in the many underground bank cases cracked in my country in recent years, the phenomenon of using virtual assets such as Bitcoin and TEDA as money laundering tools is worthy of attention.
Since the release of the "Announcement on Preventing Token Issuance Financing Risks" in 2017, a number of virtual asset trading platforms have moved overseas, and continue to provide services to domestic users by setting up servers overseas.
With the help of the characteristics of virtual currency anonymization, borderless, and peer-to-peer payment, underground banks convert domestic stolen money into virtual assets through over-the-counter transactions and other methods, and realize the cross-border transfer of stolen money on overseas virtual asset trading platforms.
On September 15, 2020, FATF issued the "Red flag indicators for virtual assets to participate in money laundering and terrorist financing" following the release of the "Risk-Based Perspective: Guidelines for Regulation of Virtual Assets and Virtual Asset Service Providers" in June 2019. Virtual assets facilitate the risks of money laundering and terrorist financing, requiring countries and virtual asset service providers to understand their anti-money laundering and anti-terrorist financing obligations.
The People's Bank of China and the State Administration of Foreign Exchange have taken a series of active measures in conjunction with public security agencies to crack down on the illegal use of virtual assets to transfer funds across borders and cut off channels for the outflow of corrupt assets.
Use anti-money laundering intelligence information to track corrupt elements and stolen money, and pursue prosecutions abroad, which greatly improves the quality and effectiveness of anti-corruption international pursuits
Anti-money laundering work itself can also directly serve the anti-corruption international pursuit of escape and stolen goods.
On the one hand, money laundering crimes can be prosecuted in different places abroad.
In the case of Li Huabo, a "hundred red communicator", we cooperated with Singapore on the legal basis of the United Nations Convention against Corruption. Singapore filed and arrested Li Huabo for money laundering crimes, and was deported after his money laundering crimes were executed. Back home.
On the other hand, anti-money laundering intelligence information can be used to track corrupt elements and stolen money.
Through the People’s Bank of China, we monitor and investigate the transfer trajectory of corrupt assets in the country. Through the People’s Bank of China, we will submit a request for assistance to the foreign financial intelligence unit (FIU) to collect clues and evidence about the transfer of corrupt assets abroad and between different countries and regions. , To provide key information for the international pursuit of escape and stolen goods.
At present, the China Anti-Money Laundering Monitoring and Analysis Center (hereinafter referred to as the Anti-Money Laundering Center) has signed a memorandum of understanding with the financial intelligence agencies of 56 countries (regions) including the United States, Australia, New Zealand and other major destination countries for fleeing and recovering stolen goods.
In 2019, the Anti-Money Laundering Center formed 10 pieces of suspicious transaction information suspected of corruption and bribery based on overseas intelligence, and notified the National Supervision Commission and other relevant units in a timely manner.
At the same time, it assisted relevant departments to issue 14 requests for assistance to overseas financial intelligence agencies.
In the face of massive amounts of information, optimizing anti-money laundering intelligence inquiry procedures and using data platforms to realize online anti-money laundering data inquiry and feedback will undoubtedly improve the efficiency of investigation and co-investigation between the case handling department and the People’s Bank of China.
"In the past three years, through fund monitoring and analysis, the Anti-Money Laundering Center has provided feedback to law enforcement agencies to assist in the investigation or transfer of intelligence information involving the financial field up to 5,446 batches." Hao Xiangjie, deputy director of the Anti-Money Laundering Center, introduced that he will continue to strengthen bilateral financial intelligence exchanges and cooperation. Fully support the international co-investigation of discipline enforcement agencies and cooperate with anti-corruption international efforts to pursue escape and stolen goods.
In recent years, the anti-money laundering departments of the People's Bank of China at all levels have voluntarily transferred clues about corruption to local commissions for discipline inspection and supervision, and cooperated with local commissions for discipline inspection and supervision to investigate nearly 4,800 corruption-related cases.
The Criminal Law Amendment (11) clarifies "self-laundering" as a crime, and provides sufficient legal protection for the effective prevention and punishment of money laundering crimes
Corruption-related money laundering is a serious economic crime that poses a serious threat to a country’s political stability, social stability, and economic security.
However, the number of "money laundering crimes" judgments in my country is extremely low, and is significantly lower than the huge number of predicate crime judgments, which cannot produce the due punishment and deterrent effect on money laundering.
The “Report of the National Supervisory Commission on the International Anti-corruption Recovery and Recovery of Fleeing and Stolen” also mentioned that the criminal law’s conviction standards for money laundering crimes are too high and the scope is too narrow, and the punishment for corruption-related money laundering is insufficient, which increases the difficulty of recovering stolen goods. .
One of the important reasons for this is that the criminal law of our country has not previously stipulated "self-laundering" as a crime, that is, the act of laundering their own criminal proceeds and proceeds by corrupt elements is not separately identified as the crime of money laundering in addition to the crime of corruption and bribery.
"From the definition of the crime of money laundering and judicial practice, the subject of the crime of money laundering can only be an accomplice who provides a fund account or assists the subject of the predicate crime to conceal and conceal the source and nature of the funds, and it is agreed to assist after the predicate crime is committed. Liu Honghua, former director of the People’s Bank of China’s Anti-Money Laundering Bureau (now Director of the Department of Legal Affairs), believes that, in other words, the subject of money laundering can only be an accomplice who assists the predicate criminal subject to launder money afterwards.
For example, criminals who launder their own money laundering of the proceeds of corruption and bribery will only be convicted of corruption and bribery, and will not be separately convicted of money laundering.
On December 26, 2020, the twenty-fourth meeting of the Standing Committee of the 13th National People’s Congress passed the Criminal Law Amendment (11), which revised the money laundering crime clauses and will implement “self-laundering” after seven types of crimes. "It is clearly a crime, and at the same time, improve the relevant methods of money laundering, and increase the number of underground banks to launder money through "payment" settlement methods.
The Criminal Law Amendment clarifies "self-laundering" as a crime, and provides sufficient legal protection for the country to effectively prevent and punish illegal money laundering crimes, as well as to pursue escape and recovery abroad.
"This amendment can regulate'self-laundering' behaviors that are separated from predicate crimes. For example, the situation in which predicate offenders transfer the proceeds of crimes from inside the country to foreign countries. This is a deepening of the scientific understanding of'self-laundering' and money laundering crimes and will help Further maintain the order of the country's financial management and achieve a comprehensive crackdown on money laundering crimes." Zhang Lei said.
Continue to intensify the crackdown on corruption-related money laundering crimes, and accurately solve the intertwined problem of domestic transactions and overseas cashing out, so that illicit money cannot be hidden or transferred in China
In April 2020, in accordance with the overall arrangement of the "Skynet 2020" operation, the National Supervision Commission of the Central Commission for Discipline Inspection organized a national discipline inspection and supervision agency to carry out a 2020 special operation for international crimes of duty.
The special action work plan requires that we continue to increase efforts to recover stolen goods, continue to use 2020 as the "year of stolen stolen goods recovery", promote the public security organs and the People's Bank of China to increase the crackdown on corruption-related money laundering crimes, and accurately solve the interweaving problems of domestic transactions and overseas cashing , To ensure that the illicit money "cannot be hidden or transferred out" in the country.
Underground bank activities have always been the focus of rectification and crackdown by the People's Bank and the public security department.
The People's Bank of China continues to organize and carry out special operations to prevent and combat the use of offshore companies and underground banks to transfer illicit funds, increase efforts to combat underground banks with money laundering crimes, and enhance the effectiveness of special operations.
At the same time, it will increase the investigation and punishment of counterparties in underground bank transactions, and increase the illegal costs of engaging in and participating in underground bank transactions.
On December 4 last year, the State Administration of Foreign Exchange notified 10 typical cases of counterparties in underground money houses, involving 2 companies and 8 individuals, and fined more than 14 million yuan.
The subjects involved mainly used underground banks, and mostly adopted domestic and foreign capital matching methods to complete illegal capital exchange and cross-border transfers, and the capital operation methods were concealed and diversified.
The State Administration of Foreign Exchange actively cooperated with the People's Bank of China and the Ministry of Public Security to carry out special operations to prevent and combat the use of offshore companies and underground banks to transfer illicit funds, and continue to maintain a high-pressure attack on underground banks.
Since 2020, the Administration of Foreign Exchange has cooperated with the public security authorities to crack down on a number of major underground bank cases, investigated and dealt with more than 1,700 counterparties, and fined more than 500 million yuan.
Money laundering through offshore centers is the current challenge.
Many corrupt elements are just looking at the convenient features of the offshore financial market, and transfer illegal assets through accounts in the offshore financial market.
In response to this problem and the current legal and regulatory difficulties, Yang Chao, a researcher at the G20 Anti-Corruption, Escape and Recovery Research Center, suggested that a “blacklist” of key monitoring should be introduced for specific countries or regions, such as tax haven offshore financial institutions. Special attention is paid to transactions of market banks and companies, and strengthened standards are implemented for account review and transactions in these countries and regions.
"Expanding industries that undertake anti-money laundering obligations should consider including the jewelry, art industry and other industries that often have large transactions into the anti-money laundering work system to further expand and refine the coverage of anti-money laundering work."
In practice, the source and destination of funds for corruption cases are facts that must be ascertained in every case.
Anti-money laundering investigations of persons involved in corruption cases have become a routine procedure in handling cases.
Therefore, deploying anti-money laundering forces in some major and important cases and launching "one case and two investigations" on corruption and money laundering can not only make the investigation of corruption cases more effective, but also allow criminals to receive every criminal fact. Legal sanctions.
Recently, the progress of digital renminbi pilot projects in many places and departments has been successively disclosed.
The digital renminbi is actually the digitization of the renminbi, the renminbi in digital form.
The advent of the "digital currency" era will form a powerful deterrent to corruption-related money laundering crimes.
"As a payment tool, in the design, the digital RMB wallet is divided into several levels based on the strength of customer identification. If you are making large payments or transferring funds, you must apply for a real-name wallet. For large amounts of corruption, bribery and money laundering In terms of other behaviors, because the information is real-named, it can provide corresponding assistance for case investigation and fund tracking." said Mu Changchun, director of the Digital Currency Research Institute of the People's Bank of China.
(Our reporter Wang Zhuo)