The draft law on anti-money laundering submitted to the top
legislature on Tuesday expanded the scope of tracing suspicious
money flowing from the banking sector to other commercial
Meanwhile, it will place those holding public office under
These measures have generally been touted as two crucial new
steps in China's anti-money laundering legislation.
Admittedly as the scope of supervision widens, the authorities
are tightening the reins to control the rising crime of money
laundering, which is conducted under various disguises.
The anti-money laundering monitoring centre of the People's Bank
of China reported 683 suspected money-laundering cases to police in
the past two years, involving a total of US$17 billion. Experts
estimate that the real amount of tainted money could be US$50
With the rising number of embezzlement- and bribery-related
money laundering crimes by government officials in recent years,
the draft law rightly strengthens control of possible crime by
What the new law needs to tackle, however, goes far beyond
A serious challenge facing legislators is how to define the
predicate offences of money laundering.
A wider definition of the predicate offences, which serve as a
source of money laundering, will toughen law enforcement.
Traditionally, Criminal Law stipulated that the predicate
offences for money laundering include drug trafficking, organized
crime, smuggling and terrorist activities.
Internationally, the general scope of predicate offences for
money laundering is much wider. It means that although
money-laundering criminals of other sources can be held accountable
domestically on other charges, it would be hard to seek
international co-operation in seizing them once they fled
It is good to see that the new draft law gives a wider berth to
the predicate offences for the crimes of money laundering,
incorporating embezzlement, bribery and financial swindle.
The current controversy lies in whether China should further
expand that scope to better dovetail with international practice,
such as the 40+9 Recommendations proposed by the Financial Action
Task Force on Anti-Money Laundering, an inter-governmental body
combating international illegal money flow. It suggests at least 20
predicate offences for money laundering.
From an international perspective, given the rising crime on its
soil and its necessity to gain full access to international
co-operation against money laundering, it is better for China to
get bolder in defining the crime.
(China Daily April 27, 2006)