Research on China's Anti-Money Laundering Legislation

Author: Xu Hanming
Publisher:
Publishing Date: 2005-09-01
Features: This book is the first specialized work in China that conducts research on anti-money laundering from a legislative perspective. It provides specific discussions on major issues in anti-money laundering legislation and extensively quotes knowledge from new institutional economics to analyze China's anti-money laundering legal system. It holds significant importance for deepening research on anti-money laundering legislation in China and promoting the standardization of such legislation. The Research on Anti-Money Laundering Legislation in China is the first specialized work in China that systematically studies the prevention, control, and punishment of money laundering from a legislative perspective. The author emphasizes the integration of economics, finance, and law, conducting in-depth analysis on how to reduce institutional barriers in anti-money laundering, fully leverage the effectiveness of China's anti-money laundering system, and promote the "Pareto effect" of the anti-money laundering system. It proposes anti-money laundering institutional designs that align with China's national conditions.
Chapter 1 provides a detailed discussion on the nature and purpose of anti-money laundering law, pointing out that anti-money laundering law is not merely a law for combating money laundering but should also be a law for the pre-emptive prevention, in-process control, and post-event punishment of money laundering. At the same time, to realize the role of anti-money laundering law, it must be elevated to the status of law and promulgated to achieve its intended effects. Correspondingly, the content of anti-money laundering law should be comprehensive, regulated by multiple legal means. Specifically, it includes the nature and purpose of anti-money laundering law, the effectiveness of anti-money laundering law, the principles of anti-money laundering law, the responsibilities of anti-money laundering subjects, the preventive legal system of anti-money laundering, the control legal system of anti-money laundering, the definition of money laundering crimes, the constitutive elements of crimes, and international cooperation. Regarding the purpose of anti-money laundering law, based on different levels and requirements, it can be divided into specific goals and ultimate goals. Specific goals refer to establishing reasonable systems and control measures for anti-money laundering at the technical level, while ultimate goals refer to reasonably preventing and combating anti-money laundering activities through the operation of specific goals, curbing upstream crimes, preventing the loss of national financial revenue and state-owned assets, maintaining financial and economic security, promoting economic development, social stability, and long-term national peace and stability.
Chapter 2, after examining the effectiveness of anti-money laundering law in international conventions, proposes a legislative design for China's anti-money laundering law. It argues that the spatial effectiveness of China's anti-money laundering law should establish a multi-level jurisdictional system based on territorial jurisdiction as the main framework, supplemented by personal jurisdiction, protective jurisdiction, universal jurisdiction, and coordinating jurisdiction. Regarding the temporal effectiveness of anti-money laundering law, since the harmfulness of money laundering crimes is widely recognized, anti-money laundering law should take effect from the date of promulgation and adopt the principle of "from old to lighter" in retroactive application to uphold the spirit of human rights protection.
Chapter 3 analyzes the nature and function of the basic principles of anti-money laundering law and provides a detailed interpretation of the systematic structure of these principles. It proposes that China's anti-money laundering law should include the following principles: exemption of personal privacy and business secret obligations, improvement of reporting subject internal control systems, legitimate prudence, coordination and cooperation, and international cooperation.
Chapter 4 conducts an in-depth study on the nature, characteristics, and functions of the anti-money laundering coordination mechanism for the first time in China. It points out that the anti-money laundering coordination mechanism, led by the national anti-money laundering coordination institution, takes guidance, supervision, coordination, and management as its basic approaches. It involves anti-money laundering obligation reporting agencies, information monitoring departments, investigation agencies, criminal investigation agencies, and judicial organs, each performing their respective duties, being responsible, cooperating, and mutually restraining, forming a coordinated and unified force to optimize resources, reduce costs, improve efficiency and effectiveness, maintain national economic security, uphold a fair and just market transaction order, and protect the legitimate rights and interests of the state, collective economic organizations, and citizens. As an institutional arrangement in the anti-money laundering system, the coordination mechanism occupies a connecting and pivotal position in the hierarchical structure of the anti-money laundering system and cannot be replaced by other hierarchical systems. At the same time, the status of the anti-money laundering coordination mechanism is independent, with its main function being to integrate the guiding ideology, basic principles, fundamental tasks, and policy measures of the anti-money laundering system into all stages and links of anti-money laundering, forming an organic whole from relatively independent, duty-bound anti-money laundering agencies, departments, and institutions. Based on a comparison of mature experience models in other countries, the author provides a detailed design for the necessity, principles, and conditions of establishing China's anti-money laundering coordination mechanism and organizational structure, as well as the functions and personnel composition of the anti-money laundering coordination institution. It advocates that to fully leverage the effect of the anti-money laundering coordination mechanism and integrate the national anti-money laundering forces, the coordination institution should be directly subordinate to the state, i.e., the National Anti-Money Laundering Committee. At the same time, it proposes establishing the National Anti-Money Laundering Investigation Bureau, the National Anti-Money Laundering Information Monitoring and Processing Center, and the National Anti-Money Laundering Expert Committee within it to exercise investigation and criminal investigation functions, information monitoring functions, and provide consultations on specialized anti-money laundering issues, thereby strengthening prevention, control, and punishment, ensuring national financial and economic security.
Chapter 5 first conducts a statistical analysis of the collection of anti-money laundering information in China, demonstrating the necessity of establishing a national anti-money laundering information monitoring and processing center in China. It proposes that the national anti-money laundering information monitoring and processing center should be independent, primarily in terms of personnel, finance, and internal autonomy. Additionally, regarding the relationship between the national anti-money laundering information monitoring and processing center and criminal law enforcement departments, it proposes constructing a new relationship between the FIU (Financial Intelligence Unit) and criminal law enforcement departments by learning from the French model. On one hand, law enforcement departments have the right to obtain relevant financial transaction report materials from the FIU when investigating money laundering cases, and the FIU also has the right to obtain corresponding intelligence from law enforcement departments, including intelligence needed for preliminary investigations of suspicious transactions. On the other hand, when law enforcement departments receive cases with evidence-provided transaction clues from the anti-money laundering bureau, they should immediately take action and report the results to the national anti-money laundering bureau. The personnel composition of the national anti-money laundering information monitoring and processing center should be professional and comprehensive, and its funding arrangements should adopt a system where national finance is the primary guarantee, combined with allocations from the recovery of money laundering crime proceeds. Finally, drawing on the experience of the United States and Canada, it provides a detailed explanation of the operational process of the FIU, including information collection, information analysis, information disclosure, and information exchange.
Chapter 6 analyzes the nature and characteristics of the responsibilities of anti-money laundering subjects and proposes the construction of China's anti-money laundering subject responsibilities based on an international legislative comparison of these responsibilities. Specifically, it conducts an in-depth analysis of the responsibilities of anti-money laundering coordination organizations, the People's Bank of China, financial regulatory departments, insurance and securities regulatory institutions, anti-money laundering information monitoring and processing centers, administrative departments and intermediaries, public security organs, procuratorial organs, and people's courts, providing significant legislative reference value.
Chapter 7, after discussing the nature and characteristics of the customer identification system, conducts a comparative study on the evolution and regulations of customer identification systems in typical countries, proposing a conceptual design for China's customer identification system. It advocates that the design of China's customer identification system should adhere to the following principles: scientific customer classification, rigorous review scope, clear review responsibilities, advanced review methods, standardized review procedures, and a complete systematic structure, which holds positive significance for establishing and improving China's customer identification system.
Chapter 8 discusses the concept and characteristics of transaction record preservation and, based on an in-depth analysis of international and typical countries' legislative provisions on transaction record preservation, proposes a legislative design for China's transaction record preservation system. It argues that financial institutions and other industries engaged in financial transactions should preserve the following records: in addition to legal requirements, these records should not be disclosed or provided to units or individuals outside the legal provisions: copies of identity documents (such as passports, ID cards, driver's licenses, or similar official documents or records) of customer accounts should be preserved for one year after the account is closed; customer account records—since the transaction is recorded; various forms of customer accounting vouchers, such as deposit slips, checks, and other forms of vouchers—since the record is made; financial transaction documents related to accounts should be preserved for at least one year after the account is closed; financial transaction documents can be preserved in legal forms such as originals, copies, microfilms, or electronic files; records and data of electronic payments should be preserved for at least one year.
Chapter 9, after reviewing China's large-sum and suspicious transaction reports, conducts an in-depth analysis of the reporting subjects, content, standards, exemptions of obligations, and exemptions of liability of large-sum and suspicious transaction reports. It proposes that China should expand the scope of reporting obligation subjects, establish two reporting systems for large-sum and suspicious transactions, implement different reporting standards for the two different reporting systems, and improve the enthusiasm of anti-money laundering subjects and the efficiency of anti-money laundering by establishing systems for the exemption of obligations and the exemption of liability.
Chapter 10 analyzes the concept and characteristics of internal control and conducts a specific study of its international and typical countries' legislation, thereby proposing a design for China's internal control system. It advocates establishing specialized anti-money laundering institutions and departments, improving audit systems, perfecting employee training systems, accelerating talent development, and improving the integrity goal system.
Chapter 11, after analyzing the concept and characteristics of money laundering crimes, discusses the evolution of the concept of money laundering crimes and the similarities and differences in the definition of money laundering crimes in international conventions, conducting an in-depth discussion on the advantages and disadvantages of China's money laundering crime concept. It proposes improvements in the following three aspects: explicitly stipulating that the subjects of money laundering crimes can be both individuals and entities, and also upstream crime subjects; criminalizing all three stages of money laundering behavior and setting up different constitutive elements; appropriately broadening the scope of upstream crimes of money laundering.
Chapter 12, starting from the general principles of criminal constitutive elements, discusses the concept, requirements, and characteristics of money laundering criminal constitutive elements, and conducts a comparative study of several factors in money laundering criminal constitutive elements, such as behavior, object, subject, and subjective aspects, concluding the general development trends of international legislative provisions on money laundering criminal constitutive elements, providing a theoretical foundation for improving China's money laundering criminal constitutive elements.
Chapter 13 provides a detailed analysis of money laundering criminal constitutive elements in China's Criminal Law, compares the differences between China's money laundering criminal constitutive elements and international as well as other countries' legal provisions, analyzes the defects of money laundering criminal constitutive elements in China's Criminal Law, and proposes specific model designs for legislative improvement.
Chapter 14 discusses the concept and characteristics of legal liability in anti-money laundering and, based on this, analyzes the civil liability, administrative liability, and criminal liability of anti-money laundering. It also fully argues for the legal liability of money laundering crimes and special confiscation measures. Given the increasing and social nature of money laundering crimes, it advocates raising their statutory penalties and improving the provisions on property penalties, including the addition of "confiscation of property" and setting corresponding sentencing ranges based on different amounts and circumstances of money laundering, to deliver a heavy blow from the perspective of property penalties. Regarding special confiscation measures, it proposes adding provisions for the confiscation of criminal value and indirect confiscation in Article of the Criminal Law and implementing an inverted burden of proof for confiscation.
Chapter 15 provides a profound description of the evolutionary essence, driving forces, and effects of economic globalization, demonstrating the necessity of international cooperation in anti-money laundering and providing a specific argument for the concept, characteristics, and principles of international cooperation in anti-money laundering. Additionally, based on a comparative study of legislative provisions on international cooperation in anti-money laundering, the author proposes his own ideas for designing China's anti-money laundering judicial assistance system, administrative international cooperation system, and financial intelligence exchange cooperation system. It advocates that China should fully utilize the international cooperation mechanism for anti-money laundering to promote the in-depth development of China's anti-money laundering work.