Pubdate: Fri, 23 Sep 2005
Source: Sacramento Bee (CA)
Copyright: 2005 The Sacramento Bee
Contact:  http://www.sacbee.com/
Details: http://www.mapinc.org/media/376
Note: Does not publish letters from outside its circulation area.
Author: Elaine Kurtenbach, AP Business Writer

CHINA WORKING ON LAWS TO COUNTER LAUNDERING

SHANGHAI, China - China is stepping up work on laws to counter 
money-laundering and financing of terrorist operations, state 
newspapers reported Friday, citing a senior central bank official.

A draft of an anti-money-laundering law will be submitted to China's 
national legislature at the "appropriate time," Xiang Junbo, a vice 
governor of the People's Bank of China, told a conference in Beijing. 
An anti-terrorism law that includes sections on money laundering has 
also been drawn up, Xiang said.

Money laundering is a growing problem in China, often linked to drug 
trafficking, corruption and tax evasion. The government has recently 
ordered banks to begin regular reporting of large foreign currency 
dealings as part of a crackdown.

Chinese reports say most of the illicit money transfers come from 
Hong Kong, Japan, the United States and Taiwan.

China is also constructing a center to monitor and screen suspicious 
transactions and other illegal activity, especially underground 
banking, the Shanghai Daily cited Xiang as saying.

Local banks have already assigned more than 92,000 people to work in 
posts devoted to preventing such crimes, reported the central 
bank-linked Financial News.

It said that since the central bank set up its Anti-Money Laundering 
Monitoring and Analysis Center in 2004, the country's 17 major 
commercial banks have made 654,400 reports of suspicious transactions 
involving 248 billion yuan ($31 billion) in local currency dealings 
and $76.9 billion in foreign currency dealings.

More than 1,500 cases were given to police for handling, it said.

The government recently reiterated its determination to crack down on 
such transactions following an unconfirmed report that a major 
Chinese bank, the Bank of China, was included in an investigation by 
U.S. authorities into alleged illicit dealings with North Korea.

In connection with that investigation, the U.S. Treasury Department 
last week designated Banco Delta Asia SARL, a bank based in the 
Chinese-ruled former Portuguese enclave of Macau, as a "primary money 
laundering concern."

The U.S. Treasury alleged the bank had aided front companies for the 
North Korean government in distributing counterfeit money and smuggling.

The bank has denied the allegations, saying it was in compliance with 
all money-laundering and terrorist-financing regulations.

American officials have not commented on the report by the Asian Wall 
Street Journal that the Bank of China and another Macau-based bank 
were also included in the probe by more than a dozen U.S. government agencies.
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MAP posted-by: Elizabeth Wehrman