Editor’s Note
China’s central bank has intensified anti-money laundering oversight this year, penalizing multiple financial institutions while refining supervisory standards. This signals a broader regulatory push to strengthen financial risk controls.
Since the beginning of this year, the People’s Bank of China (PBOC) has comprehensively upgraded its anti-money laundering (AML) supervision. On one hand, multiple banks have been penalized for AML violations. On the other hand, the PBOC is standardizing AML supervisory behavior and refining risk-based AML supervision requirements.
In the first seven months of this year, several large and medium-sized banks and a batch of small and medium-sized banks have received penalty notices for AML violations, showing characteristics of “large combined penalties + dual penalties targeting individuals.” Small and medium-sized institutions such as city commercial banks, rural commercial banks, and rural credit cooperatives have become high-incidence areas for penalties.
On July 9, the Hubei Provincial Branch of the People’s Bank of China announced an administrative penalty decision. Due to violations such as failing to perform customer identification obligations as required and conducting transactions with customers of unclear identity, Hankou Bank Co., Ltd. was fined 1.23 million yuan. Two relevant responsible persons were also fined 14,000 yuan and 10,000 yuan, respectively.
This penalty originated from Hankou Bank’s violation of Article 9 of the “Regulations on Anti-Money Laundering by Financial Institutions,” which requires financial institutions to establish and implement a customer identification system.
Previously, on July 8, Guangdong Shunde Rural Commercial Bank Co., Ltd. was warned and fined 1.5249 million yuan for violating regulations on payment and settlement, precious metals, treasury, credit reporting, anti-money laundering, and financial technology management.
Payment institutions are also under strict scrutiny. On July 16, Renbao Payment Technology (Chongqing) Co., Ltd., whose payment license was revoked, received a 1.04 million yuan penalty notice from the PBOC for illegal and irregular activities. Institutions like Zhaoyin Credit were heavily fined or had their licenses revoked for weak AML efforts.
According to the law enforcement summary released by the National Financial Regulatory Administration, 69 people were prohibited from entering the insurance industry in the first half of the year, with at least 20 receiving “lifetime industry bans.” During the same period, 12 people had their senior management qualifications revoked, and 3 institutions had their business licenses revoked. Multiple lifetime industry ban penalty decisions clearly recorded that the involved personnel had violations such as “failing to perform customer due diligence investigations” and “failing to report large/suspicious transactions as required,” based on which the regulatory authorities imposed top-level penalties.
On July 16, the People’s Bank of China released the “Decision on Amending and Repealing Some Regulations (Draft for Comments),” initiating a comprehensive revision of China’s core AML regulations.
This revision focuses on two core systems: First, extending the retention period for suspicious transaction-related records in the “Measures for the Administration of Reporting of Large-Value and Suspicious Transactions by Financial Institutions” from 5 years to 10 years. Second, improving the “Measures for the Administration of Anti-Money Laundering and Counter-Terrorist Financing Supervision of Financial Institutions,” further implementing the primary responsibility of financial institutions, and for the first time clarifying the legal status of “non-on-site supervision” at the regulatory level.
Analysts point out that one reason for this revision is to respond to the upcoming fifth round of mutual evaluation by the Financial Action Task Force (FATF). Extending the retention period for suspicious transaction records is precisely to meet FATF’s requirements for long-term traceability capabilities and to enhance China’s technical compliance performance in the evaluation.
Furthermore, the new regulations impose stricter requirements on the monitoring scope of financial institutions, clarifying that transaction monitoring should cover all customers, all businesses, and all processing links, filling previous regulatory blind spots.
Significant adjustments have also appeared in supervision methods. “On-site evaluation” has been revised to “conducting law enforcement inspections through non-on-site means.” This implies that in the future, the central bank will rely more on digital supervision methods, improving supervision efficiency and coverage through remote monitoring, online inspections, and other means.
On the other hand, starting from August 1, 2025, the “Measures for the Administration of Anti-Money Laundering and Counter-Terrorist Financing of Precious Metals and Jewelry Industry Institutions” will be formally implemented. This marks a further expansion of China’s AML system coverage, bringing precious metals and jewelry trading businesses (such as gold stores) into the scope of obligated entities for the first time.
According to the new regulations, for transactions involving a single or daily cumulative cash transaction amount reaching or exceeding 100,000 yuan (or equivalent foreign currency), relevant industry institutions must submit a large-value transaction report to the China Anti-Money Laundering Monitoring and Analysis Center within 5 working days after the transaction occurs.
Although compared to the 50,000 yuan reporting threshold stipulated in the 2016 version of the “Measures for the Administration of Reporting of Large-Value and Suspicious Transactions by Financial Institutions,” the new management measures appear somewhat “relaxed,” they actually have deeper implications.
Analysts point out that this revision brings non-financial institutions like gold and jewelry stores and pawnshops under regulatory purview for the first time. This move not only blocks “smurfing” style money laundering behaviors that evade supervision through fragmented purchases but also makes the 100,000 yuan reporting threshold more binding in practice. Therefore, although the threshold appears lowered on the surface, it实质上 strengthens supervision over high-risk industries.
The most direct impact of the new regulations’ implementation is reflected in consumers’ purchasing processes. For example, when consumers use cash to purchase gold worth over 100,000 yuan, they need to provide identification documents, and merchants will record details such as their occupation and purchase purpose. Some stores may suggest customers use bank transfers to simplify the complex reporting procedures.
Overall, with the extension of the suspicious transaction record retention period, the strengthening of regulatory technological means, and the inclusion of new risk areas like precious metals into the regulatory framework, the “AML security net” China is building is becoming increasingly tight. This is not only a positive response to international standards but also a powerful safeguard for domestic financial order.
At the same time, the new regulations also imply that compliance costs for financial institutions and specific non-financial industries will rise significantly, placing higher demands on risk control systems and personnel capabilities.
How to balance improving regulatory efficiency with reducing compliance burdens, and how to ensure the smoothness of legitimate transactions while strictly preventing risks, will become new challenges jointly faced by regulators and market participants.
