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Article 1. These Measures are formulated in accordance with the Regulation of the People's Republic of China on Foreign Exchange Control and other relevant provisions for the purpose of monitoring large-sum and suspicious foreign exchange transactions and standardizing the reporting of foreign exchange transactions. Article 2. Domestic financial institutions engaging in foreign exchange business (hereinafter referred to "financial institutions") shall report large-sum and suspicious foreign exchange transactions to the authorities for foreign exchange control in accordance with these Measures. Large-sum foreign exchange transactions refer to foreign exchange transactions above a specified amount made by the transacting parties in any form of settlement through a financial institution. Suspicious foreign exchange transactions refer to foreign exchange transactions with or for an abnormal amount, frequency, source, direction or use. Article 3. The State Administration of Foreign Exchange ("SAFE") and its branch offices (hereinafter referred to the "AFE") shall take charge of the supervision and administration of the reporting of large-sum and suspicious foreign exchange transactions. Article 4. When opening foreign exchange accounts for its customers, a financial institution shall abide by the Provisions on Real-Name Opening of Individual Deposit Accounts and the Provisions on the Control of Foreign Exchange Accounts Opened in China and may not open any anonymous foreign exchange account or any account under an obviously fictitious name for any of its customers. When handling foreign exchange business for its customers, a financial institution shall verify the customer's information, including the name of the entity, the name, ID card and the number thereof of the legal representative or person-in-charge of the entity, supporting documents for account opening, the organization code, domicile, registered capital, business scope, size of business operation and the average daily transaction volume of the account of the entity and, in the case of an individual customer, the name, ID card and the number thereof, domicile, occupation, and information about the income and family of the depositor. Article 5. Each financial institution shall make record of all large-sum and suspicious foreign exchange transactions and keep such records for at least five years from the date of the relevant transaction. Article 6. Each financial institution shall establish and improve an internal anti-money laundering post responsibility system, formulate its internal anti-money laundering procedures and have persons specially responsible for the record making, analysis and reporting of large-sum and suspicious foreign exchange transactions. Article 7. Unless otherwise required by law, no financial institution may disclose to any entity or individual any information about any large-sum or suspicious foreign exchange transaction. Article 8. Any of the following foreign exchange transactions shall constitute a large-sum foreign exchange transaction: (1) any single deposit, drawing, settlement or sale of any foreign cash or any multiple deposits, drawings, settlements or sales of any foreign cash made in a day with an amount or an accumulated amount at the equivalent of US$10,000 or more; (2) in the case of receipt or payment of non-cash foreign exchange through a transfer, bill, bank card, telephone banking, Internet banking or any other form of electronic transactions or any other new financial instrument, any single transaction or any multiple transactions made in a day with an amount or an accumulated amount at the equivalent of US$100,000 or more in the case of transactions made by an individual, or any single transaction or any multiple transactions made in a day with an amount or an accumulated amount at the equivalent of US$500,000 or more in the case of transactions made by an entity. Article 9. Any of the following foreign exchange transactions shall constitute a suspicious foreign exchange cash transaction: (1) any resident individual frequently depositing and drawing large amounts of foreign cash in and from an individual bankcard or deposit account, which apparently does not suit the status of or the use of fund by the cardholder (depositor); (2) any resident individual making transfers or drawing cash in large amounts in a foreign country after depositing a large amount of foreign cash in a bankcard in China; (3) any resident individual frequently depositing, drawing cash or settling foreign exchange through an individual foreign exchange cash account in an amount below the SAFE verification threshold; (4) any non-resident individual frequently taking into China from abroad and depositing in the bank large amounts of foreign cash and then requiring the bank to open a traveler's check or draft to be taken out of China; (5) any non-resident individual frequently depositing large amounts of foreign cash in his bankcard; (6) any frequent receipts and payments of large amounts of foreign cash through the foreign exchange account of an enterprise, which does not suit the business activities of the account holder; (7) any regular and large-amount foreign cash deposits into the foreign exchange account of an enterprise without withdrawal of any large amount of foreign cash from such account; (8) any enterprise frequently receiving export proceeds in cash that apparently does not suit the range and scale of its business; (9) the RMB fund that an enterprise uses to buy foreign exchange for overseas investment being mostly in cash or that transferred from a bank account other than one of such enterprise; (10) the RMB fund that an enterprise with foreign investment uses to buy foreign exchange for repatriation of profit being mostly in cash or that transferred from a bank account other than one of such enterprise; (11) any enterprise with foreign investment making investment in foreign cash. Article 10. Any of the following foreign exchange transactions shall constitute a suspicious non-cash foreign exchange transaction: (1) any resident individual's foreign exchange account frequently receiving funds from any domestic account under a different name; (2) any resident individual frequently receiving from abroad large amounts of foreign exchange remittance and then remitting them out in the original currency, or remitting in a large amount of foreign exchange from abroad and then remitting them out through frequent remittances in the original currency; (3) any non-resident individual's foreign exchange account frequently receiving large amounts of remittances from abroad, especially from countries (regions) with serious problems of narcotics production and trafficking; (4) any resident or non-resident individual's foreign exchange account with a regular pattern as receiving a large amount of fund which is drawn in several transactions the next day and then receiving another large amount of fund which is again drawn in several transactions the next day; (5) any enterprise making frequent external advance payments for import or external payments for commissions under trade account in a large amount, through its foreign exchange account, each payment being in an amount below the AFE verification threshold; (6) any enterprise frequently receiving, through its foreign exchange account, export foreign exchange receipts in a large amount in bills (such as a check, draft and promissory note); (7) any enterprise's dormant foreign exchange accounts or foreign exchange accounts usually with no large fund movements suddenly receiving abnormal foreign exchange fund inflows, which gradually become larger in a short period of time; (8) any enterprise having frequent and large-amount fund transactions through its foreign exchange account, which is in keeping with the nature and size of its business operation; (9) any enterprise's foreign exchange account becoming inactive abruptly following frequent and large-amount inflows and outflows of fund; (10) any frequent fund movements through the foreign exchange account of an enterprise in amounts divisible by thousand; (11) any rapid inflow and outflow of fund through the foreign exchange account of an enterprise, which transactions are in a large amount, with the outstanding balance of the account being very small or nil; (12) any remittance abroad of the bulk of balance of the foreign exchange account of an enterprise received in multiple small-amount electronic transfers, check or draft deposits; (13) any domestic enterprise opening an offshore account in the name of an overseas legal or natural person, and such offshore account experiencing regular fund movements; (14) any enterprise remitting fund to two or more domestic residents through an offshore account and surrendering foreign exchange to the bank in the name of donation, with the transfers of fund and foreign exchange sales all done by the same one or few persons; (15) the annual repatriation of profit by an enterprise with foreign investment exceeding the amount of investment by a large margin or obviously does not fit in with its business operation; (16) any enterprise with foreign investment rapidly moving the fund abroad in a short period of time after receiving the same as investment, which does not fit in with the demand of payment as may arise from its business operation; (17) any offsetting deposit or loan transaction with any affiliate or connected company of a financial institution located in a region with serious problems of smuggling, narcotics trafficking or terrorist activities; (18) any securities institution ordering the bank to transfer foreign exchange fund for any purpose other than securities dealing or settlement; (19) any securities institution that engages in B share trading business frequently making short-term foreign exchange loans in a large amount through the bank; (20) any insurance institution frequently making indemnities in a large amount to or canceling insurance policies in large sum for the same overseas policy holder through the bank. Article 11. Each financial institution shall report the large-sum and suspicious foreign exchange transactions defined in Articles 8, 9 and 10 hereof on a monthly basis in both paper and electronic forms. Article 12. Each financial institution shall examine the following foreign exchange cash transactions and report promptly any discovery of suspected money laundering in paper form with relevant documents attached: (1) any payment from a foreign exchange account in an amount roughly tallying with the amount of deposit made on the same or previous day; (2) any account holder depositing foreign exchange or Renminbi cash in many transactions in foreign currency deposit accounts of others and receiving at the same time Renminbi or foreign exchange of the equivalent amount; and (3) any enterprise frequently purchasing foreign exchange with large amounts of Renminbi cash. Article 13. Each financial institution shall examine the following foreign exchange non-cash transactions and report promptly any discovery of suspected money laundering with relevant documents attached: (1) any resident individual frequently switching from one currency to another when conducting foreign exchange transactions apparently not for profit-seeking purpose; (2) any resident individual asking the bank to issue a traveler's check or draft after frequently receiving foreign exchange remittances from abroad; (3) any non-resident individual frequently ordering or cashing traveler's checks or drafts in a large amount through his foreign exchange account; (4) any enterprise refusing to provide supporting documents or general information on different occasions when opening a foreign exchange account; (5) any enterprise group making any internal foreign exchange fund transfer exceeding the volume of its actual business operation; (6) any enterprise providing incomplete documents when settling or selling foreign exchange, or settling or selling foreign exchange with a abruptly increased amount, increased frequency or with an amount apparently exceeding its ordinary level of operation; (7) any enterprise frequently collecting foreign exchange settlement vouchers (for verification purpose) without providing or refusing to provide valid business papers when entering an item of export revenue into its account with the bank; (8) any enterprise frequently receiving, settling or paying foreign exchange in a large amount in the name of donation, advertising or exhibition, which is apparently not in agreement with its range of business; (9) any enterprise frequently receiving, settling or paying foreign exchange in a large amount in the name of purchase or sale of any proprietary technology or trademark or any other intangible assets, which is apparently not in agreement with its business operation; (10) any enterprise paying any freight, premium or commission that apparently does not coincide with its import or export transactions; (11) any enterprise often making deposits in its traveler's check or foreign currency draft, especially those issued abroad, which is not in agreement with its business operation; (12) any enterprise making an abrupt repayment of its foreign exchange loan, with fund the source of which is unknown, or which does not coincide with the background of the customer; (13) any enterprise applying for a loan guaranteed by its or a third party's assets or credit, the source of which assets is unknown, or which does not coincide with the background of the customer; (14) raising fund abroad through a letter of credit without a foreign trade background or through other means; (15) any enterprise knowingly conducting loss-making sale or purchase of foreign exchange; (16) any enterprise seeking to conduct a swap between the local and foreign currencies for a fund the source and use of which are unknown; (17) the capital invested by the foreign party of an enterprise with foreign investment exceeding the approved amount or any foreign loan of such an enterprise being remitted from a third country where there is no connected enterprise of such enterprise; (18) the capital invested by the foreign party of an enterprise with foreign investment or a foreign loan to such an enterprise being converted into Renminbi and transferred to a bank accounts for securities and other investment, which does not fit in with its business operation; (19) any fund movement in and out of the foreign exchange cash account of a financial institution apparently does not fit in with the size of the deposit in the account, or the fluctuation of such fund movement apparently exceeding the change in the size of deposit; (20) any fund movement of the internal foreign exchange transaction accounts of a financial institution apparently does not fit in with its daily business operation; (21) any financial institution having any fund movement in its inter-bank foreign exchange transaction account, onshore and offshore business transaction account or account for transactions with overseas affiliates, which is apparently not in agreement with its daily business operation; (22) the foreign exchange credit or settlement between a financial institution and its connected enterprises fluctuating by a large margin in a short period of time; (23) any financial institution buying an insurance policy with a large amount of foreign cash; and (24) any other foreign exchange transactions being suspected on reasonable grounds by the staff of the bank or other financial institution as money laundering. Article 14. Tier-one branches located in capitals of provinces and autonomous regions and in municipalities directly under the central government of a financial institution shall act as the principal reporting units, or the head office of the financial institution shall designate a principal reporting unit if there is no such branch in any of such places. Sub-branches and offices of a financial institution shall, within the first five working days of each month, report the large-sum and suspicious foreign exchange transactions that took place in the preceding month through their superior office to the principal reporting unit and at the same time to the local branch office of AFE. Each principal reporting unit shall, within the first 15 working days of each month, itemize the large-sum and suspicious foreign exchange transactions that took place in the relevant province, autonomous region or municipality directly under the central government in the preceding month and report the same to the local branch at the provincial level of SAFE. The head office of each financial institution shall, within the first five days of each month, report the large-sum and suspicious foreign exchange transactions that took place within the head office in the preceding month to the local branch office of the AFE. Article 15. When a financial institution finds any suspected crime during the examination and analysis of large-sum and suspicious foreign exchange transactions, it shall report that to the local public security authority and local branch office of AFE within three working days as of the date of discovery. Article 16. The branches at the provincial level of SAFE shall itemize the large-sum and suspicious foreign exchange transactions reported by financial institutes and report the same to SAFE head office within the first 20 working days of each month or, if any foreign exchange transaction is suspected as a crime, the case shall be transferred promptly to the local public security authority and reported to the SAFE head office. Article 17. Any financial institution who commits any of the following acts shall be ordered to make corrections, given a warning or a fine from 10,000 to RMB30,000 Renminbi yuan by AFE: (1) failure to report any large-sum or suspicious foreign exchange transaction according to the relevant provisions; (2) failure to keep any large-sum or suspicious foreign exchange transaction in record stipulated by the relevant provisions; (3) disclosing any large-sum or suspicious foreign exchange transaction in violation of the relevant provisions; or (4) opening a foreign exchange account for any organization without examining the customer information in accordance with the relevant provisions; Article 18. Any financial institution that opens a foreign exchange account for any individual without examining the customer information in accordance with the relevant provisions shall be ordered to make corrections, given a warning or a fine from 1,000 to 5,000 Renminbi yuan by AFE. Article 19. Where any financial institution violates these Measures and causes great losses as a result, the AFE may order such financial institution to suspend or cease part or all of its foreign exchange settlement and sales business. Article 20. Any staff member of a financial institution who violates the relevant provisions and provides assistance in money-laundering activities shall be given a disciplinary sanction or, if a crime is constituted, be transferred to the judicial organ to be investigated for criminal responsibility. Article 21. The following is the meaning of some of the terms in these Measures: "Frequent (or frequently)" means foreign exchange fund transactions occurring at least three times a day or occurring daily for at least five days in a row. "Large amount" refers to an amount close to the threshold amount for reporting as a large-sum foreign exchange transaction. "A short period of time" means a period not exceeding 10 business days. When "above", "from" or "to" is used to indicate a threshold number, either a floor or a ceiling, the given figure is also included. Article 22. These Measures shall come into force as of March 1, 2003. |
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