Laws of the People's Republic of China

[2007]No.1

Under the Anti-Money Laundering Law of the People's Republic of China, the Law of the People's Republic of China on the People's Bank of China and other laws and regulations, the People's Bank of China constituted the Measures for the Administration of Financial Institutions' Report of Transactions Suspicious of Financing for Terrorist Purposes have been adopted at the 13th executive meeting on June 8th, 2007. They are hereby promulgated and shall enter into force as of the promulgation date.

President Zhou Xiaochuan

June 11, 2007

Measures for the Administration of Financial Institutions' Report of Transactions Suspicious of Financing for Terrorist Purposes

Article 1

In order to monitor the activities of financing for terrorist purposes, prevent terrorism-oriented financing by means of financial institutions and regulate financial institutions' report of transactions suspicious of financing for terrorist purposes, the present Measures are constituted under the Anti-Money Laundering Law of the People's Republic of China, the Law of the People's Republic of China on the People's Bank of China and other laws and regulations.

Article 2

The term "financing for terrorist purposes" as mentioned in the present Measures refers to the following behaviors:

1.

to raise, possess or use funds or other forms of property by terrorist organizations or terrorists;

2.

to assist terrorist organizations, terrorists, terrorism or terrorist criminal activities with funds or other forms of property;

3.

to possess, use or raise funds or other forms of property for terrorist purposes or terrorist criminal activities;

4.

to possess, use or raise funds or other forms of property for terrorist organizations or terrorists.

Article 3

The present Measures are applicable to the following financial institutions established within the territory of the People's Republic of China under law:

1.

policy banks, commercial banks, rural cooperative banks, urban credit cooperatives and rural credit cooperatives;

2.

securities companies, futures companies and fund management companies;

3.

insurance companies and insurance assets management companies;

4.

trust and investment companies, financial assets management companies, finance companies, financial lease companies, auto finance companies and currency brokerage companies;

5.

other financial institutions as determined and announced by the People's Bank of China.

The present Measures are applicable to the report of transactions suspicious of financing for terrorist purposes by institutions conducting remittance, payment and clearing business, fund sale business and insurance brokerage.

Article 4

The People's Bank of China and the branches thereof shall conduct supervision and check over financial institutions' report of transactions suspicious of financing for terrorist purposes.

Article 5

The anti-money laundering monitoring and analysis center set up by the People's Bank of China takes charge of accepting and analyzing the report of transactions suspicious of financing for terrorist purposes.

If the anti-money laundering monitoring and analysis center finds out that the report of transactions suspicious of financing for terrorist purposes submitted by a financial institution is incomplete or erroneous, it may send a notice of supplement or correction to the financial institution, which shall make a supplement or correction within five workdays after accepting the notice.

Article 6

The report of transactions suspicious of financing for terrorist purposes sent by financial institutions their working personnel for the purpose of fulfilling the obligation of combating financing for terrorist purposes and under law shall be protected by law.

Article 7

A financial institution shall submit to its headquarters the report of transactions suspicious of terrorist-oriented financing, which shall submit the electronic form of the report to the anti-money laundering monitoring and analysis center within 10 days upon the occurrence of the related incident or appoint another institution to do so. If a financial institution has no headquarters or it is impossible for it to report suspicious transactions to the anti-money laundering monitoring and analysis center via its headquarters or any other institution appointed by its headquarters, the reporting method shall be separately determined by the People's Bank of China.

Article 8

In suspicion of any client, fund, transaction or potential transaction involved in any terrorism, terrorist criminal activities, terrorist organization, or of any person conducting financing activities for terrorist purposes, a financial institution shall submit a report of transactions suspicious of financing for terrorist purposes, irrespective of whether the amount of funds or the value of the property involved is huge. A report of suspicious transactions shall be submitted under, but not limited to, any of circumstances as follows:

1.

any client suspicious of raising or attempting to raise funds or property of other forms for any terrorist organization, terrorist or crime of terrorist activities;

2.

any client suspicious of providing or attempting to provide funds or other forms of property for any terrorist organization, terrorist, person conducting financing activities for terrorist purposes or terrorist criminal activities;

3.

any client suspicious of preserving, managing, operating funds or other forms of property for any terrorist organization or terrorists, or attempting to do so;

4.

any client or his/its trading counterpart suspicious of being a terrorist organization, terrorist or person conducting financing activities for terrorist purposes;

5.

any fund or any other form of property suspicious of being sourced from or being about to source from any terrorist organization, terrorist or person conducting financing activities for terrorist purposes;

6.

any fund or property of other forms suspicious of being used or being about to be used for financing for terrorist purposes, crime of terrorist activities or any other terrorist purposes, or being used by any terrorist organization, terrorist or person conducting financing activities for terrorist purposes;

7.

other circumstances under which the financial institution and its working personnel have good reasons to suspect that any fund, property of other forms, transaction or client is involved in terrorism, terrorist criminal activities, terrorist organization, terrorist or personnel conducting financing activities for terrorist purposes.

Article 9

If any financial institution discovers or has good reasons to suspect that any client or his/its trading counterpart is in relation to any of the following lists, it shall promptly file a report of suspicious transactions with China Anti-money Laundering Monitoring and Analysis Center and the local branch of the People's Bank of China, and take measures under law as required by the related competent department:

1.

list of terrorist organizations or terrorists as announced by the related department or institution of the State Council;

2.

list of terrorist organizations or terrorists as announced by judicial authorities;

3.

list of terrorist organizations or terrorists as listed in any decision of the Security Council of the United Nations; or

4.

list of other terrorist organization suspects or terrorist suspects that must be paid attention to as required by the People's Bank of China.

If there is any other provision on the monitoring of above-mentioned lists in any law or administrative regulations, such provision shall prevail.

Article 10

Financial institutions may refer to the Measures for the Administration of the Financial Institutions' Report of Large-sum Transactions and Suspicious Transactions (Decree No.2, 2006 of the People's Bank of China) and other related provisions for the specific report elements, report form and requirements for filling in such reports.

Article 11

If any financial institution violates the present Measures, it shall be imposed upon a punishment by the People's Bank of China under the provisions of Article 31 and Article 32 of the Anti-Money Laundering Law of the People's Republic of China. And the People's Bank of China shall make suggestions to China Banking Regulatory Commission, China Securities Regulatory Commission or China Insurance Regulatory Commission to take any of the following measures in light of different circumstances:

1.

to order the financial institution to stop its business for internal rectification or revoking its business license;

2.

to disqualify the directly liable directors, senior managers and other persons of the financial institution from their posts or to forbid them to work in the financial industry;

3.

to order the financial institution to impose disciplinary punishment upon the directly liable directors, senior managers and other persons.

If any branch of the People's Bank of China at the county (municipal) level finds out any financial institution in violation of the present Measures, it shall report to the branch of the People's Bank of China at the next higher level, which shall give a punishment or make a suggestion under the provision of the preceding paragraph.

Article 12

The Provisions of the People's Bank of China on the Procedure of Administrative Punishment (Decree No.3, 2001 of the People's Bank of China) shall be abided by the People's Bank of China or any of its branches at or above the county (municipal) level when imposing any administrative punishment upon any financial institution.

Article 13

When implementing work of preventing and combating financing for terrorist purposes and fulfilling such obligations as establishing and perfecting inner control system, identifying clients' identity, keeping clients' identity-related materials and confidentiality, etc., financial institutions shall be governed by the related provisions on anti-money laundering

Article 14

The present Measures shall enter into force as of the promulgation date.