Editor’s Note
China’s financial regulators have proposed new draft measures to strengthen customer due diligence and record-keeping requirements for financial institutions, signaling a continued tightening of anti-money laundering supervision. The public comment period underscores a systematic approach to enhancing the AML framework.
Anti-money laundering (AML) supervision in the financial sector continues to intensify. On August 4th, the People’s Bank of China (PBOC), the National Financial Regulatory Administration, and the China Securities Regulatory Commission jointly released the “Measures for the Customer Due Diligence and the Preservation of Customer Identity Information and Transaction Records by Financial Institutions (Draft for Comments)” (hereinafter referred to as the “Measures”) for public consultation. The feedback period ends on September 3, 2025.
According to the Measures, financial institutions required to fulfill AML obligations fall into six major categories: 1) Policy banks, commercial banks, rural cooperative banks, rural credit cooperatives, and village banks; 2) Securities companies, futures companies, and securities investment fund management companies; 3) Insurance companies and insurance asset management companies; 4) Trust companies, financial asset management companies, enterprise group finance companies, financial leasing companies, auto finance companies, consumer finance companies, money brokerage firms, and wealth management companies; 5) Non-bank payment institutions; 6) Other institutions engaged in financial business as determined and announced by the PBOC.
For banks, the Measures stipulate that when providing one-time financial services such as cash remittances, cash exchange, bill cashing, physical precious metals trading, or sales of various financial products with a transaction value exceeding RMB 50,000 or the equivalent of USD 10,000 in foreign currency, they must conduct customer due diligence and retain relevant documents.
For non-bank payment institutions, the Measures require them to conduct customer due diligence when establishing business relationships with customers through methods like opening payment accounts, or when selling registered prepaid cards or selling unregistered prepaid cards worth over RMB 10,000 at once, or in other circumstances specified by the PBOC. They must also register basic customer identity information and retain copies or scans of valid identity documents.
When banks or non-bank payment institutions provide acquiring services to special merchants, they must conduct due diligence on these merchants, register their basic identity information and that of their legal representatives or responsible persons, and retain copies of their valid identity documents.
Regarding trust companies, the Measures state that when establishing a trust or handling trust beneficiary right transfers for clients, they must identify and verify the identity of the settlor, understand the source of trust property, register basic identity information of the settlor and beneficiaries, and retain copies of the settlor’s valid identity documents.
According to the drafting explanation, the Measures were formulated mainly to implement the provisions of the “Anti-Money Laundering Law of the People’s Republic of China,” to clarify and detail regulations on customer due diligence and record preservation, to meet requirements for international AML assessments, and to enhance the effectiveness of financial institutions’ customer due diligence work.
The main content of the Measures includes clarifying the overall requirements for customer due diligence, improving specific due diligence requirements, and refining the scope of application to ensure alignment with the Anti-Money Laundering Law.
In improving specific due diligence requirements, the PBOC stated it aims to: 1) Update the applicable scenarios and measures for customer due diligence across financial industries based on current business practices; 2) Clarify due diligence requirements during the ongoing business relationship between financial institutions and clients, based on legal provisions; 3) Specify due diligence requirements related to beneficial owners, high-risk countries/regions, countries/regions subject to enhanced monitoring, foreign politically exposed persons and senior management of international organizations, correspondent banking and similar businesses, and remittance businesses, referencing international AML standards.
It is worth noting that since the new Anti-Money Laundering Law took effect, the PBOC has issued several supplementary regulations. For example, the “Measures for Anti-Money Laundering and Counter-Terrorist Financing for Precious Metals and Gemstone Practitioners,” which took effect on August 1st, aims to strengthen and standardize AML/CFT work in that sector.
Wang Pengbo pointed out that the multiple detailed new regulations also serve to implement the requirements of the Anti-Money Laundering Law. Effective anti-money laundering measures can help financial institutions identify and prevent potential financial crime risks, providing customers with a safer service environment.
In Wang Peng’s view, the implementation of the Measures will help build a safe and transparent financial system and enhance international competitiveness. Financial institutions need to proactively adapt and integrate compliance into their strategies to achieve “compliance creates value.”
