Access to over RMB 500,000 without registration? New rules for financial institution customers are coming! Expert: Anti-money laundering supervision has not relaxed

The Regulations are designed to prevent and suppress money laundering and terrorist financing activities, standardize financial institution customer due diligence, client identity data, and transaction record-keeping behaviors, maintain national security and financial order.

Anticipated upgrading of anti-money laundering supervision in the financial sector.

Recently, the People's Bank of China and other three departments jointly drafted the Regulations on Financial Institution Customer Due Diligence and Client Identity Data and Transaction Record-Keeping Management (draft for solicitation of opinions), which was made publicly available for public consultation from August 4 to September 3.

In January this year, the revised Anti-Money Laundering Law officially took effect. This draft is born out of the above background.

From a overall perspective, the Regulations first define the scope of financial institutions that need to fulfill anti-money laundering obligations, and then propose multiple operational standards for customer due diligence in the financial sector, client identity data, and transaction record-keeping behaviors, providing financial institutions with a set of guidelines.

Source: Tuchuang Creative

Cancellation of cash storage business due diligence-related descriptions.

In fact, three and a half years ago, the regulatory department had already released an earlier version of the Regulations. Compared to the 2022 version of the Regulations, some details in this draft have been adjusted.

On January 1, 2022, the Regulations on Financial Institution Customer Due Diligence and Client Identity Data and Transaction Record-Keeping Management (issued by the China Banking Regulatory Commission, China Securities Regulatory Commission, and the People's Bank of China) was published. The above file clearly stipulates in Article 10 that "commercial banks, rural cooperative banks, rural credit cooperatives, and village banks and so on shall identify and verify the identity of natural person clients, understand and record the source or purpose of funds, and conduct due diligence for cash storage business exceeding RMB 50,000."

At that time, this provision had caused widespread attention and hot debate in society, with the topic "Individuals who store over RMB 500,000 need to register the source of funds" trending on Weibo. Some netizens believed that this would make the cash storage process more complicated and bring inconvenience to business operations; others believed that this would infringe upon residents' privacy.

Regarding this, a responsible official from the People's Bank of China had responded at the time, stating that according to statistics, the current cash storage business exceeding RMB 500,000 accounts for only about 2% of all cash storage businesses. The Regulations' Article 10 stipulation has little impact on clients' cash storage and withdrawal business. Financial institutions will not be affected in their normal operations.

It is worth noting that the current draft has cancelled the related descriptions for cash storage exceeding RMB 500,000 needing to "understand and record the source or purpose of funds", and the requirements for due diligence on cash storage business have been reduced.

According to senior financial policy expert Zhou Yiqin, who was interviewed by Time Finance, said that the elimination of these descriptions in this draft reflects the regulatory authorities' adjustment between anti-money laundering supervision and facilitating public financial services. The previous provision had caused market attention and certain controversy, and some people were brought inconvenience during its implementation. This adjustment is more practical.

However, he emphasized that this does not mean that anti-money laundering supervision has relaxed. "The Regulations have strengthened client due diligence overall requirements in other areas, requiring enhanced scrutiny of 'obviously abnormal' large transactions and aligning with international anti-money laundering trends."

Time Finance noted that aside from cash storage business, the new Regulations also propose stipulations for banks providing clients with cash remittance, cash exchange, bill discount, commodity trading, and sales of various financial products exceeding RMB 500,000 or its equivalent in foreign currency.

"Financial institutions shall conduct client due diligence and register client basic information, retain valid identification documents or other identity proofing materials." The Regulations stipulate.

As of now, the Regulations are still in the public consultation stage, and whether they can truly take effect is unknown. However, the draft also indicates that the previous related files will be abolished simultaneously upon implementation.