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China tightens cross-border money transaction

CHINA will tighten inspection on Chinese residents' cross-border money transaction among updated measures to manage large-sum money deals.

Financial institutions should report to authorities if an individual makes cross-border money transaction larger than 200,000 yuan (US$28,782) daily, the People's Bank of China said in a statement today announcing updated rules on the management of large-sum money deals and suspicious deals. The new rules will be effective starting July of next year.

The criteria is new to meet authorities' needs to monitor yuan deals more closely as the public can access more cross-border investment channels, including the Shanghai-Hong Kong and Shenzhen-Hong Kong stock exchange links.

“Yuan deals by domestic residents will be more frequent as the gradual opening-up of onshore individual cross-border businesses,” the statement said. “To design specialized yuan report standard will enable regulators to master cross-border yuan transaction data and conduct risk monitoring.”

Originally, reports should be filed if an individual makes cross-border transaction of foreign exchanges equivalent to more than US$10,000.

The criteria are kept unchanged in the updated rules.

Concerning cash deals, including cash deposit, withdraw, currency convert, and other payment, the threshold to define a large-sum deal was lowered to 50,000 yuan from 200,000 yuan daily.
Financial institutions should file reports if individual and corporate clients make cash deals larger than 50,000 yuan or US$10,000, according to the new standard.

Individuals using cash to buy 50,000 yuan or more worth of US dollars from banks in a day will be reported to the regulators, the statement said as an example.

The new standard meets with international practices against money laundry, and it can be further lowered when necessary, the statement said.


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