Central Bank: Strengthening the administration of account opening and the follow- up control measures for suspicious transaction reports
作者:管理员    发布于:2017-07-28 15:07:10    文字:【】【】【
摘要:Abstract: According to the web-site of the Central Bank on 25th May, People’s Bank of China recently issued the “Notice on Strengthening the Administration of Account Opening and the Follow-up Control Measures for Suspicious Transaction Reports”, which emphasised the need of strengthening account opening management to prevent illegal opening and strengthening follow-up control measures for suspicious transaction reports to improve risk prevention and control on money laundering. The “Notice” also requested the People’s Bank of China at all levels to strengthen the supervision on financial institutions and payment institutions regarding the implementation of account management, clients’ identification and the management system of suspicious transaction report. When illegal activity is found, administrative penalties shall be imposed according to the regime.

Attached original notice:

 

The Shanghai Head Office of the People's Bank of China (“PBC”); all branches and operations offices of the PBC; all central sub-branches of the PBC in capital cities of provinces (autonomous regions) and sub-provincial cities; China Development Bank; all policy banks, and joint-stock commercial banks; and Postal Savings Bank of China:

 

In recent years, lawbreakers have illegally opened and traded in bank accounts (including bank cards, here and below) and payment accounts and then committed telecommunications frauds, and illegal fund-raising, tax evasion, tax frauds, corruption, acceptance of bribes, money laundering and other cases of illegal and criminal activities have occurred frequently. Some cases and regulatory practices have shown that some banking financial institutions and non-bank payment institutions (hereinafter referred to as “payment institutions”) fail to strictly implement the client identification system at the link of account opening and have certain loopholes in business management and risk prevention and control, which have left an opportunity that can be made use of by lawbreakers to illegally open accounts; and many financial institutions and payment institutions have, after submitting suspicious transaction reports, failed to take necessary control measures for the clients, accounts and funds involved, and still provided undifferentiated financial services, resulting in the smooth transfer of crime funds and their proceeds and the continuous or final occurrence of money laundering and other criminal activities. In order to further improve the effectiveness of prevention of above-mentioned illegal and criminal activities, effectively maintain the social economic and financial order, and protect the safety of the people's properties and legal rights and interests, you are hereby notified of the relevant matters on strengthening the administration of account opening and the follow-up control measures for suspicious transaction reports as follows:

 

I.  Strengthening the administration of account opening, and effectively  

   preventing illegal account opening and trading of bank accounts and payment  

   accounts

 

(1)   Effectively performing the obligation of client identification, and eradicating the opening of bank accounts in false or pseudonymous names.

 

   All banking financial institutions and payment institutions shall, under the     

   principle of "Know Your Customer,” conscientiously implement the relevant  

   rules and provisions on account management and client identification,  

   distinguish the degrees of client risks, identify and verify the true identities of

   clients and their agents by selectively adopting online verification of identity

   certificates, personnel inquiry, return visit to clients, on-site investigation and

   visits, checking of public service bills (such as vouchers for payment of

   electricity and water charges, among others), online information verification

   and other verification methods, so as to prevent lawbreakers from opening

   accounts by using pseudonyms or falsely using others' identities.

 

(2)   Strictly examining abnormal account opening, and refusing account opening 

   when necessary.

 

   When clients do not cooperate in client identification, organize to open

   accounts at the same time or in batches, offer an unreasonable reason for

   account opening, or client’s identity does not match the opening business, or

   there are sufficient reasons to suspect that the clients are engaged in card

   reselling or criminal activities, banking financial institutions and payment

   institutions have the right to refuse account opening. According to the risk of

   client and the accounts or businesses initiated by the client, the account review period can be extended, 

   and strengthening customer due diligence efforts and other measures, and  

   refusing account opening when necessary.

 

II.  Strengthening the follow-up control measures for suspicious transaction

 reports, and improving the standards of risk prevention and 

 control on money laundering

 

(1)   Emphasizing on artificial analysis and identification, and detecting suspicious transactions.

 

For abnormal transactions identified through the transaction monitoring system, financial institutions and payment institutions shall focus on the value of client identity information and transaction records, which play an important role in customer due diligence to take effective measures to carry out artificial analysis and identification. These measures include but not limited to the following:

 

Ø  reidentifying and investigating client’s identity, including client’s occupation, age, income etc.;

 

Ø  taking reasonable measures to identify the actual controller of the client or the actual beneficiary of the transaction, and understand client’s equity or client’s control structure;

 

Ø  investigating and analysing client’s trading background, purpose and rationality of the transaction, including client’s operating status and source of income, basic information and transactions of associated clients, motivation of account opening or transaction etc.;

 

Ø  conducting an overall analysis of business relationship with client and a detailed review of all client’s accounts and transactions to determine whether the client’s transactions are consistent with their business, risk status and source of funds;

 

Ø  if the account is suspected to be used by someone else to involve in criminal activities, verify all transaction with the account owner.

 

(2)   Distinguishing the situation to take appropriate follow-up control measures.

 

All financial institutions and payment institutions shall follow the “risk-based” and “prudent balance” principle to assess the suspiciousness and risk status of suspicious transaction. Prudently handle the relationship between the management and control of account (or funds) and the protection of rights and interests of financial consumers. After submitting the suspicious transaction report, one shall take timely and appropriate follow-up measures to the client, account (or funds) and financial business involved to mitigate the risk of money laundering, terrorism financing and other illegal activities. These follow-up control measures include but are not limited to:

 

Ø  conducting continuous monitoring of the client and transaction involved in the suspicious transaction report, and if suspicious transactions continue to occur, submit periodically (e.g. every 3 months) or additional report;

 

Ø  increasing degrees of client risks, and take appropriate control measures according to the “Guidelines for the Assessment of Money Laundering and Terrorism Financing Risks and Categorized Management of Customers of Financial Institutions” (No.2 [2013] of the People’s Bank of China) and the related internal control regulation;

 

Ø  taking measures to limit the means, scale and frequency of transaction of clients or account after the approval of senior management, especially the amount of money, type of business and frequency of the transaction through non-counter approach;

 

Ø  refusing the provision of financial services and even terminating the business relationship after the approval of senior management;

 

Ø  reporting to the relevant financial regulatory authorities;

 

Ø  reporting to the relevant investigating authorities.

 

(3)   Establishing a complete internal control system and operating procedures of the follow-up control measures for suspicious transaction reports.

 

All financial institutions and payment institutions shall establish a complete internal control system and operating procedures to identify the measure that shall be taken regarding different suspicious transaction reports, and put it into the suspicious transaction reporting system, and construct a complete “ex-ante, concurrent, and ex-post” process for the internal control regulation and operating procedures of suspicious transactions report to improve the effectiveness of suspicious transaction reporting.

 

III.       intensifying supervision and inspection, and severely punishing illegal acts

 

The People’s Bank of China at all levels shall strengthen the supervision on financial institutions and payment institutions regarding the implementation of account management, identification of client’s identity and the management system of suspicious transaction report; take it as an important inspection item in the relevant law enforcement inspection, and continue to develop innovative inspection methods, which focus on the use of reversed investigation and spot-check, to improve the ability and standard of inspection; when illegal activity is found, administrative penalties shall be imposed according to the regime.

 

The Shanghai Head Office of the People's Bank of China (“PBC”), all branches and operations offices of the PBC, all central sub-branches of the PBC in capital cities of provinces (autonomous regions) and sub-provincial cities shall forward this notice to all financial institutions and payment institutions such as commercial banks, rural cooperative banks, rural credit cooperatives, village banks, foreign banks, securities companies, futures company, fund management companies, insurance companies, insurance asset management company, professional insurance agency companies, insurance brokerage firms, trust companies, financial asset management companies, enterprise group finance companies, financial leasing companies, car finance companies, consumer finance companies, currency brokerage firms and loan companies of which the headquarters are registered in the governed district.

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