The effectiveness of China’s anti-money laundering policies

Tang Xu  Shi Yongyan Cao Zuoyi

1 Research fellow, doctoral supervisor, People’s Bank of China (PBOC)
2 Ph.D. of economics, PBOC
3 Master of Laws, PBOC

Abstract:

Finding the best method to assess the effectiveness of Anti-Money Laundering (AML) policies is a controversial issue. Based on about 9,000 questionnaires circulated to AML professionals and other related staff at the People’s Bank of China and other banking institutions, this study acquired first-hand data from respondents and has resulted in the following key findings: The effectiveness of the whole AML system is rated as “largely effective” in respect to China’s legislation, regulation and supervision, suspicious transaction monitoring and analyses and administrative investigation; the system is rated as “basically effective” in respect to money-laundering prosecutions and convictions and international cooperation. Financial institutions’ compliance with AML regulations is rated as “largely effective” in respect to internal control, customer identification, large-value transaction and suspicious transaction reporting, and the record-keeping of ID information and transactions. Statistically, 58.48% of respondents said they think that China’s AML regime is “completely effective” or “largely effective;” 35.21% say it is “basically effective,” and the remaining 4.68% call it “largely ineffective” or “completely ineffective.” The authors conclude by proposing some policy recommendations to enhance the effectiveness of AML policy.
Key words: anti-money laundering, effectiveness, questionnaire

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