Administrative Rules for the
Reporting by Financial Institutions of Large-Value and Suspicious Foreign
Exchange Transactions
Article 1 These Rules
are formulated in accordance with Regulations
of the People's Republic of China on Foreign Exchange Administration and
other regulations in order to monitor large-value and suspicious foreign
exchange transactions.
Article 2 Financial
institutions located in the territory of China that run foreign exchange
business (hereinafter referred to as financial institutions) shall report, in
accordance with these Rules, to foreign exchange administration authorities
large-value and suspicious foreign exchange transactions.
Large-value
foreign exchange transaction refers to foreign exchange transactions above a
specified amount made by transactions parties in any form of settlement through
financial institutions.
Suspicious foreign
exchange transaction refers to foreign exchange transaction with abnormal
amount, frequency, source, direction, use or any other such nature.
Article 3 State
Administration of Foreign Exchange and its branches (hereinafter referred to as
SAFE) are responsible for supervising and administering the reporting of
large-value and suspicious foreign exchange transactions.
Article 4 When opening
foreign exchange accounts for customers, financial institutions shall abide by Rules on Using Real Name for Opening
Individual Deposit Account and Rules
on Administration of Foreign Exchange Account within the Territory of People's
Republic of China and shall not open anonymous foreign exchange accounts or
accounts in obviously fictitious names for their customers.
When processing
foreign exchange transactions for customers, financial institutions shall
verify information about the customer's real identity, including the name of
work unit, name of the legal representative or person-in-charge, ID and its
number, supporting documents for account opening, organization registration
code, address, registered capital, business scope, size of business operation,
average daily transaction volume of the account and in the case of an
individual customer, name of the depositor, ID and its number, address,
occupation, household income and other information about the customer's family.
Article 5 Financial
institutions shall record all large-value and suspicious foreign exchange fund
transactions and keep the record for a minimum of five years as of the day of
transaction.
Article 6 Financial
institutions shall establish and improve internal anti-money laundering post
responsibility system, formulate internal anti-money laundering procedure and,
have specified staff record, analyze and report large-value and suspicious
foreign exchange transactions.
Article 7 Financial institutions shall not disclose
to any agency or individual information about large-value and suspicious
foreign exchange transactions, unless otherwise provided for by laws.
Article 8 The
following foreign exchange transactions constitute large-value foreign exchange
transactions:
(1)
Any single
deposit, withdrawal, purchase or sale of foreign exchange cash above US$10,000
or its equivalent, or the accumulated amount of multiple deposit, withdrawal,
purchase or sale transactions of foreign exchange within one day above
US$10,000 or its equivalent;
(2)
Foreign
exchange non-cash receipt and payment transactions made through transfer,
bills, bank card, telephone-banking, internet banking or other electronic
transactions or other new financial instruments in which a single transaction
volume or accumulated transaction volume within one day exceeding US$100,000 or
its equivalent by individual customers, and in the case of corporate customers,
a single transaction volume or accumulated transaction volume within one day
exceeding US$500,000 or its equivalent.
Article 9 The
following foreign exchange transactions constitute suspicious foreign exchange
cash transactions:
(1)
Frequent deposit
and/or withdrawal of large amount of foreign exchange cash from an individual
bankcard or individual deposit account that are apparently not commensurate
with the identity of or use of fund by the cardholder or account owner;
(2)
An individual
resident transferring to or withdrawing cash in large amount in a foreign
country after depositing large amount of foreign exchange cash in a bankcard in
China;
(3)
Frequent
depositing, withdrawal or sale of foreign exchange through an individual
foreign exchange cash account below the SAFE validated threshold;
(4) Non-resident individual requiring banks to
open traveler's check or draft to convert large amount of foreign exchange cash
he/she has brought into China in order to take the fund out of China;
(5)
Frequently
depositing large amount of foreign exchange cash in a bankcard held by
non-resident individual;
(6)
Frequent and
large-amount fund movement through a corporate foreign exchange account not
commensurate with the business activities of the account owner;
(7)
Regular and
large-amount cash deposit into a corporate foreign exchange account without
withdrawal of large amount of cash from the said account;
(8)
An enterprise
frequently receiving export proceeds in cash that is apparently not commensurate
with the range and size of its business;
(9) The RMB fund that an enterprise uses to buy
foreign exchange for overseas investment is mostly in cash or has been transferred
from a bank account not belonging to the said enterprise;
(10) The RMB fund that a foreign-funded enterprise uses to buy foreign
exchange for repatriation of profit is mostly in cash or has been transferred
from a bank account not belonging to the said enterprise;
(11) A
foreign-funded enterprise making investment in foreign exchange cash.
Article 10 The
following foreign exchange transactions constitute suspicious foreign exchange
non-cash transactions:
(1) Foreign
exchange account of an individual resident frequently receiving fund from
domestic accounts that are not under the same name;
(2) An individual
resident frequently receiving large amount of foreign exchange remittance from
abroad before remitting the total amount out in the original denomination, or
frequently remitting foreign exchange fund of the same denomination that is
transferred from abroad in large amount;
(3) Non-resident
individual frequently receiving remittance in large amount from abroad,
especially from countries (regions) with serious problems of narcotics
production and trafficking;
(4) Foreign
exchange account of a resident or non-resident individual with a regular
pattern of receiving large amount of fund which is withdrawn in several
transactions the next day, and then receiving large amount of fund again which
is withdrawn in several transactions the next day;
(5) An enterprise
making frequent and large advance payment for import and commission under trade
account below the SAFE validated threshold through its foreign exchange
account;
(6) An enterprise
frequently receiving, through its foreign exchange account, export payment in
bills (such as check, draft and promissory note) in large amount;
(7) Dormant
foreign exchange accounts or foreign exchange accounts usually with no large
fund movement suddenly receiving abnormal foreign exchange fund inflow, and the
inflow gradually becoming larger in a short period of time;
(8) An enterprise
having frequent and large amount fund transactions through its foreign exchange
account not commensurate with the nature and size of its business operation;
(9) The foreign
exchange account of an enterprise becoming inactive abruptly following frequent
and large amount inflow and outflow of fund;
(10) Frequent fund
movement through the foreign exchange account of an enterprise in amounts
divisible by thousand;
(11) Rapid inflow
and outflow of fund through the foreign exchange account of an enterprise, the
amount of which is big within one day but the outstanding balance of the account
is very small or nil;
(12) The foreign
exchange account of an enterprise remitting abroad the bulk of balance received
in multiple small amount electronic transfers, check or draft deposits; (13) A
domestic enterprise opening an offshore account in the name of an overseas
legal person or natural person, and the said offshore account experiencing
regular fund movement;
(14) An enterprise
remitting fund to many domestic residents through an offshore account and
surrendering foreign exchange to banks in the name of donation, the transfer of
fund and foreign exchange sales all done by one person or few persons;
(15) The annual
expatriation of profit by a foreign-funded enterprise exceeding the amount of
originally invested equity by a large margin and obviously not commensurate
with its business operation;
(16) A
foreign-funded enterprise rapidly moving the fund abroad in a short period of
time after receiving the investment, which is not commensurate with the payment
demand of its business operation;
(17) Offsetting
deposit and loan transactions with affiliates or connected companies of
financial institutions located in regions with serious smuggling, drug
trafficking or terrorist activities or other crimes;
(18) Securities
institutions ordering banks to transfer foreign exchange fund not for the
purpose of securities dealing or settlement;
(19) Securities
institutions that engages in B share trading business frequently borrowing
large amount of foreign exchange fund through banks; and
(20) Insurance institutions
frequently making compensation payment in large amount to or discharging
insurance in large amount for the same overseas policy holder through banks.
Article 11 Financial institutions shall report the
large-value or suspicious foreign exchange fund transactions as defined by
Articles 8, 9 and 10 monthly in hard copy as well as in electronic copy.
Article 12 Financial institutions shall examine the
following foreign exchange cash transactions and report promptly any discovery
of suspected money laundering in hard copy with relevant documents attached.
(1) Amount of expenditure of foreign exchange
account roughly tallying with the amount of deposit in the previous day;
(2) Depositing foreign exchange or renminbi
cash in many transactions in the foreign exchange deposit accounts of other
individuals and receiving at the same time renminbi or foreign exchange of
equivalent amount;
(3) An enterprise frequently purchasing foreign
exchange with renminbi cash.
Article 13 Financial
institutions shall conduct verification over the following non-cash foreign
exchange transactions, and shall promptly report any discovering of suspected
money laundering activity and attach related files to the superior authorities:
(1) An individual resident frequently
switching from one denomination to another when conducting foreign exchange
transactions apparently with no profit-seeking purpose;
(2) An individual resident asking a bank to
issue traveler's check or draft after frequently receiving foreign exchange
remittance from abroad;
(3) A non-resident individual frequently
ordering traveler's check or cashing traveler's check or draft in large amount
through foreign exchange account;
(4) When opening foreign exchange account,
an enterprise declining to provide supporting documents or general information
on different occasions;
(5) An enterprise group making internal
foreign exchange fund transfer exceeding the volume of actual business
operation;
(6) An enterprise providing incomplete
documents when surrendering to or purchasing foreign exchange from a bank, or
the amount of buying or selling suddenly expanding, selling and buying becoming
more frequent, or the amount of foreign exchange sold to the bank apparently
exceeding the normal level of its business operation;
(7) When entering an item of export revenue
into an account in a bank, an enterprise failing to provide valid documents but
frequently collecting foreign exchange sales statement (for verification
purpose), or rejecting to provide valid documents but frequently collecting
foreign exchange sales statement (for verification purpose);
(8) An enterprise frequently receiving
foreign exchange, making foreign exchange payment or frequently selling foreign
exchange to banks, all in large amount, for the purpose of donation,
advertising, sponsoring conference or exhibition, which is apparently not
commensurate with its range of business;
(9) An enterprise frequently receiving
foreign exchange, making foreign
exchange payment, or frequently selling foreign exchange to banks, all in large
amount, for the purchase of buying or selling technology or trade mark right or
other intangible assets, which is apparently not commensurate with its range of
business;
(10) Freight, premium and commission paid by
an enterprise apparently not commensurate with its import and export trade;
(11) An enterprise often depositing traveler's
check or foreign exchange draft, especially those issued abroad and not commensurate
with its business operation;
(12) An enterprise suddenly paying its
overdue foreign exchange loan in full with fund whose source is unspecified or
not commensurate with the background of the said enterprise;
(13) An enterprise applying for a loan
guaranteed by assets or credit belonging to itself or a third party, the source
of which is unspecified or not commensurate with the background of the
customer;
(14) Raising fund abroad through letter of
credit with no foreign trade background or other means;
(15) An enterprise knowingly conducting
loss-making sales or purchase of foreign exchange;
(16) An enterprise seeking to conduct a swap
between the local currency and foreign currency for a fund whose source and use
is unspecified;
(17) The capital invested by the foreign
partner of a foreign-funded enterprise exceeding the approved amount or direct
external borrowing of a foreign-funded enterprise being remitted from a third
country where there is no connected enterprise;
(18) Local currency fund converted from
capital invested by the foreign partner of a foreign-funded enterprise or
external borrowing being diverted to bank accounts for securities and other
investment, which is not commensurate with its business operation;
(19) Fund movement in and out of the foreign
exchange cash account of an financial institution apparently not commensurate
with the size of the deposit in the account, or the fluctuation of fund
movement apparently exceeding the change in the size of deposit;
(20) Fund movement of the internal foreign
exchange transaction accounts of a financial institution apparently not
commensurate with its daily business operation;
(21) Fund movement of the inter-bank foreign
exchange transaction account, onshore and offshore business transaction
account, or account for transactions with overseas affiliates apparently not
commensurate with the daily business operation of the financial institution;
(22) Foreign exchange credit or settlement
between a financial institution and its connected enterprises fluctuating by a
large margin within a short period of time;
(23) A financial institution buying an
insurance policy with large value foreign currency cash; and
(24) Any foreign exchange fund transaction
being suspected with proper reasons by the staff of a bank or other financial
institutions as money laundering.
Article 14 Tier-one
branches located in provincial capital, capital of autonomous region and
municipality directly under the central government of a financial institution
shall act as the major reporting unit
and the head office of the financial institution shall designate a major
reporting unit if there is no such branch in these places.
Sub-branches and
offices of a financial institution shall report, within the first five work
days of every month, large-value and suspicious foreign exchange fund
transactions of the preceding month through their superior office to the major
reporting unit and at the same time to the local branch office of SAFE.
Each major
reporting unit shall summarize large-value and suspicious foreign exchange fund
transactions that take place in the province, autonomous region or municipality
directly under central government in the preceding month and report, within the
first 15 work days of every month, to the local branch office of SAFE.
The head office of
each financial institution shall report, within the first five days of every
month, large-value and suspicious foreign exchange fund transactions that take
place within the head office in the preceding month to the local branch office
of SAFE.
Article 15 When a financial
institution discovers suspected crime during the examination and analysis of
large-value and suspicious foreign exchange fund transactions, it shall report
to the local public security authority and local SAFE office within three work
days as of the day of discovery.
Article 16 SAFE branch offices in every province,
autonomous region, and municipality directly under the central government shall
summarize large-value and suspicious foreign exchange fund transactions reported
by financial institutes and report to SAFE head office within the first 20 work
days of every month; when a foreign exchange transaction is suspected as crime,
the case shall be transferred promptly to local public security authority and
to the SAFE head office.
Article 17 In the case
of any of the following misconduct by a financial institution, the SAFE shall
issue a warning, order the
