FATF re-rates China's progress on money laundering and terror financing
Nov 30, 2022
Paris [France], November 30 : The Financial Action Task Force (FATF) re-rated China's progress made on money laundering and terror financing.
The country has been upgraded on two recommendations - Recommendation 7 - Targeted financial sanctions related to proliferation and Recommendation 24 - Transparency and beneficial ownership of legal persons, read a Paris-based watchdog report.
The FATF Plenary adopted the mutual evaluation report (MER) of China in February 2019, its 1st enhanced follow-up report (FUR) with technical compliance re-ratings (TCRR) in October 2020, and its 2nd enhanced FUR with TCRR in October 2021. This 3rd FUR analyses China's progress in addressing the technical compliance deficiencies identified in its MER.
Overall, China has made progress in addressing some of the technical compliance deficiencies identified in its 32016 Mutual Evaluation report, read the report.
China is now compliant on 9 recommendations, largely compliant on 22, and partially compliant on 5 Recommendations. The country remains non-compliant with four recommendations. China will remain in enhanced follow-up and will continue to inform the FATF of progress achieved in improving the implementation of its AML/CFT measures.
Given these results and China's level of effectiveness, the FATF placed China in enhanced follow-up. Patricia Godinho Silva, Legal Advisor, Bank of Portugal, conducted the analysis of the re-rating. Section 3 of this report summarises China's progress made in improving technical compliance. Section 4 sets out the conclusion and a table showing which Recommendations have been re-rated.
Re-ratings are given where sufficient progress has been made. Overall, the expectation is that countries will have addressed most, if not all, technical compliance deficiencies by the end of the third year from the adoption of their MER. This report does not address what progress China has made to improve its effectiveness.
Notably, China has China, in recent months, has blocked several bids to designate several terrorists based in Pakistan. Beijing put on hold a proposal to list Talha Saeed, son of Lashkar-e-Taiba (LeT) chief Hafiz Saeed. This bid was moved by India and co-supported by the US, under the 1267 sanction regime.
FATF is the global money laundering and terrorist financing watchdog set up in 1989 out of a G-7 meeting of developed nations in Paris.
Initially, its objective was to examine and develop measures to combat money laundering. After the 9/11 attacks on the US, the FATF 2001 expanded its mandate to incorporate efforts to combat terrorist financing.
In April 2012, it added efforts to counter the financing of the proliferation of Weapons of Mass Destruction (WMD).
