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Money laundering in China and Southeast Asia

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To effectively combat the rising threat of money laundering in China and Southeast Asia, the country must address deficiencies in its financial system, warns Wang Jing, deputy head of the anti-money-laundering bureau of the People’s Bank of China.

Wang highlights the lack of compliance management capability and regulatory technology in Chinese financial institutions, particularly amid the growing complexity of financial crimes and the rapid expansion of the fintech sector.

Speaking at the 13th China Anti-Money Laundering Summit Forum in Shanghai, Wang emphasizes the importance of taking a strong stance against money laundering for national and financial security. Both mainland China and Singapore have reported increased risks of money laundering and terror financing, according to the 2023 Anti-Money-Laundering Index by the Basel Institute on Governance. The Financial Action Task Force is set to review China's anti-money-laundering efforts next year, following a narrow passage in its 2019 assessment.

Wang notes that various financial crimes, including telecoms scams, online gambling, and underground banks, are increasingly linked to money laundering, posing new challenges. Despite the rise in financial risks, Chinese financial institutions generally exhibit low levels of risk management and significant differences in their risk control capabilities.

Wang highlights the need for increased efforts against money laundering in China, emphasizing its significance in curbing crimes in Southeast Asia. Han Dongping, a lawyer specializing in financial crimes, emphasizes the importance of international cooperation to effectively combat cross-border money laundering, despite potential hindrances from political and economic factors.

Cyber Protection

Criminal groups in Southeast Asia are earning billions of dollars through scams, threatening the GDP of affected countries. The United Nations Office on Drugs and Crime reports that illicit profits are laundered through money transfers, legitimate businesses, and various investment portfolios. In response to these challenges, China initiated an anti-money-laundering campaign in January last year, linking the issue to national security, social stability, economic growth, and the public interest.

Prosecutors in China have taken action against over 1,700 individuals for money laundering in the first three quarters of the year, a nearly 15% increase from the same period last year. The surge is closely associated with the high frequency of telecoms scams and cross-border gambling. A recent case in Chongqing municipality revealed that a gang laundered over 2.25 billion yuan ($312 million) in proceeds from telecoms scams and online gambling through cryptocurrency over five consecutive months. The gang members were sentenced to jail terms ranging from one to six years.


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