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China eager to join combat against money laundering
Wang Fang, The Epoch Times
3/6/2005

The International Conference on Combating Money Laundering was held in Hong Kong on February 16-17. President of the "Financial Action Task Force," Mr. Jean-Louis Fort said that China would very soon become a full member of the organization.

In recent years, a massive number of Chinese officials have left China and the majority of them carried huge sums of money with them. In order to block the illegal outflow of money, China is eager to join this international organization.

The vice-president of the People's Bank of China, Li Ruogu, attended the conference and expressed that China would hopefully complete the legislation against money laundering this June to conform to the suggestions and requirements of FATF.

The Associated Press stated that in recent years China has received international pressure requesting that it clean up its legal system to cooperate with the international efforts to prevent terrorist organizations from amassing funds. But, China indicated that its work in anti-money laundering would mainly aim at domestic corruption and economic crimes.

The Chinese official statistics state that the number of corrupted officials that have fled are about 500 in total and these cases involve about 70 billion yuan (US$8.4 billion). The lack of the cooperative anti-corruption mechanism from foreign countries has impeded the capture of these corrupted officials.

The material from China’s Ministry of Public Security published on Wednesday indicated the escaped economic crime suspects hide in various places around the world. The higher ranking corrupt officials prefer to hide in the United States, Canada and Australia, while the lower ranking corrupt officials choose the nearby states of Thailand, Burma, Russia etc. (lower cost countries).

Other corrupted individuals temporarily hide in Africa, South America and Eastern Europe, etc. They choose the “low cost” countries first and then seek the opportunity to move to “a secure place.”

Regarding inland Mainland China, money laundering is very active and rules are ignored. The official rule allows one to carry only 20,000 yuan or the equivalent in foreign currency when entering or leaving the country. It has been reported there are still many people carrying larger amounts of cash commuting between the mainland and Hong Kong every day. The currency exchange shops such as those located at the Sheung Wan area in Hong Kong, therefore, get this "official" business.

Regarding Hong Kong, in order to cooperate with FATF’s new regulations against money laundering adopted in 2003, the Hong Kong government planned to submit the drafts to the legislature before the end of the year and to strengthen the efforts against illegal money laundering across the border.

The measures include a rule that any passenger carrying over $15,000 (US dollars) or the Euro equivalent could be required to register his or her name and the amount of money carried.

There are also six specific professions, real estate, precious metal and jewelry stores, trust service agencies, attorneys and accountants which are all required to report any suspicious money laundering activities, otherwise they may possibly face legal liability.

Generally it is believed these measures should make a big dent in cross-border money laundering, especially for some mainland corrupt officials and illegal merchants who transport illegal money to Hong Kong.

The headquarters of FATF is located in Paris. It is an international governmental organization established in 1989 by the Organisation for Economic Co-operation and Development (OECD). China started its application to join this organization in February 2004 and now has observer status.

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