China has continued its crackdown on money laundering risks with the People’s Bank of China (PBOC), the China Banking and Insurance Regulatory Commission and the China Securities Regulatory Commission issuing new guidelines financial institutions must follow in regard to customer due diligence and transaction records.
Effective from 1 March, the measures will include a requirement for individuals depositing more than RMB50,000 (US$7,875) to register the source of and use for the funds. Likewise, domestic transfers of more than RMB500,000 (US$78,750) and overseas transfers of more than RMB200,000 (US$31,500) will come under “key supervision”.
According to a joint announcement issued by the three institutions in late January, the measures are an important step in implementing the central government’s anti-money laundering supervision systems in order to effectively prevent financial risks.
Specifically they will “improve the scope of anti-money laundering obligations in the financial industry, clarify the specific requirements for customer due diligence in each financial industry, emphasize risk-based due diligence measures and continuous due diligence measures, and require financial institutions to deal with high-risk situations.”
China’s crackdown on money laundering has included a focus on cross-border gambling, with both CEOs of Macau’s historically top two junket operators Suncity Group and Tak Chun Group – Alvin Chau and Levo Chan respectively – having been arrested and detained in recent months.
The PBOC had issued a previous advisory in April 2021 promising to fight cross-border gambling by targeting “capital chains” within the financial sector.
However, given the headwinds currently faced by the junket industry, the impact of such crackdowns on Macau is likely to be significantly reduced over time according to Professor in Integrated Resort and Tourism Management at the University of Macau, Desmond Lam.
“Such anti-money laundering policies, given our current emphasis on the greater control of the gaming industry particularly on junket businesses, will have a much less significant impact on Macau,” Professor Lam told Inside Asian Gaming.
“This is particularly so moving forward as we emphasize developing a healthy, legal and leisure [focussed] mass gaming market in Macau.”