Refer China: Draft Rule Requires Verification for Overseas Transfers Over ¥5k

Or approximately $1,000 USD

China Proposes Draft Rule Requiring ID Verification for Overseas Remittances Over 5,000 RMB

On August 4, China's top financial regulators — the People's Bank of China, the National Financial Regulatory Administration, and the China Securities Regulatory Commission — jointly released a draft regulation for public comment. The proposed regulation, titled "Administrative Measures for Customer Due Diligence and Preservation of Customer Identity and Transaction Records", aims to strengthen anti-money laundering practices across the financial sector.

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It is important to note that this is only a draft for public consultation and has not yet been implemented.

The draft suggests that financial institutions and remittance service providers should verify the identity of individuals when transferring more than 5,000 RMB (or approximately $1,000 USD) overseas in a single transaction. This move is intended to enhance transparency and ensure accurate identification, especially in transactions with higher risks of money laundering or terrorism financing.

Regulators emphasized that many financial institutions have not adequately matched their due diligence practices with the risk levels of their clients. The draft aligns with international anti-money laundering standards set by the Financial Action Task Force (FATF), addressing gaps in areas such as simplified due diligence, ongoing monitoring, and beneficial ownership identification.

Under the proposed rules, financial institutions must apply a risk-based approach, following "Know Your Customer" (KYC) principles, and refrain from serving unidentified or anonymous clients. Additional enhanced due diligence would be required for higher-risk customers or suspicious transactions, regardless of the transaction amount.

Source: 财经网, 证券时报