PBOC Demands ID Check for Over USD1,000 Overseas Transfers to Stop Money Laundering
Liao Shumin
/SOURCE : Yicai
PBOC Demands ID Check for Over USD1,000 Overseas Transfers to Stop Money Laundering

(Yicai Global) July 31 -- China's central bank is tightening up capital controls to verify transfers that exceed USD1,000 to stop money laundering and has already fined firms failing to comply with the new rules.

The People's Bank of China released four policies to stop criminally inclined capital outflows on July 26, after which it has fined some of China's securities firms, insurers and third-party payment platforms such as Alibaba's Alipay and Tencent's Tenpay for related wrongdoings.

The scope of the four notices included identity verification, the scale of cross-border payment transactions, management of high-risk businesses susceptible to money laundering or terrorist financing, as well as safekeeping of transaction records. In addition to financial institutions, also real estate developers and accounting firms must report to the central bank.

Regarding cross-border payments worth more than CNY10,000 (USD1,470) or USD1,000, or alternatively an equivalent amount in another foreign currency, the PBOC requires institutions to record the payers' ID credentials and verify their personal information.

PBOC fined Alipay and Tenpay CNY600,000 (USD87,900) each on July 24 for processing cross-border payment transactions beyond the approved business scope, incorrect filings of these payments, and failures to report risks. Shenzhen-based third-party payment platform DDBill Payment paid CNY15.3 million (USD2.2 million) in penalties for handling overseas payments using falsified logistics data.

PBOC issued a CNY1 million fine, the largest penalty given to a brokerage company this year, to China Galaxy Securities on July 27 for a number of violations including processing transactions for unidentified customers, the Beijing-based firm said in a statement yesterday.

China Life Insurance was fined CNY700,000 due to its failure to properly store customer identity documents and transaction records, the Beijing-based insurer said on July 29.

Editor: Emmi Laine

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Keywords: Pboc , Anti-Money Laundering , Penalty , Alipay , Tenpay , China Galaxy Securities , China Life Insurance , Capital Controls , Overseas Transfers