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China's improvements in AML/CFT shortcomings - the country is still under "enhanced follow up"

Following improvements made in addressing technical compliance issues, the Financial Action Task Force (FATF) today upgraded China's compliance with two of its recommendations.

China's status in relation to Recommendation 7 was changed from non-compliant to partially compliant in its most recent enhanced follow-up report.

China is declared non-compliant due to "several shortcomings," according to the international watchdog, regarding this suggestion for targeted financial sanctions related to proliferation.

According to the report, there were no "legal provisions" in China that forbade "legal persons and entities from making funds available to designated entities," while freezing requirements were 2incomplete in scope."  In some circumstances, they only applied to specific non-financial firms and professions as well as financial organizations.

FATF assessed that despite "moderate shortcomings" still present, China had made "positive progress" in implementing the suggestion.

Due to "several shortcomings," including "no requirements to collect, maintain, or have beneficial ownership information available, except if collected as part of CDD," China was found to be non-compliant with Recommendation 24.

Since then, the country has passed laws and regulations defining several legal person categories and their registration, but "moderate shortcomings" still exist, hence the country is now only partially rated as compliant.

Currently, China is compliant on 9 recommendation, largely compliant with 22, partially compliant with 5 and non-compliant with 4.

The country will now continue on an enhanced follow-up and will keep the watchdog updated on its AML/CFT improvement efforts.



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