China: Central Bank issues trial guidelines on AML/CFT for Banks' Cross-border Business
The State Council announced, on 1 February 2021, that the People's Bank of China and the State Administration of Foreign Exchange had issued guidelines on Anti-Money Laundering and Anti-Terrorist Financing ('AML/CFT') for Banks' Cross-Border Business (Trial) ('the Cross Border Guidelines') and Self-Assessment for AML/CFT Risks of Legal Person Financial Institutions ('the Self-Assessment Guidelines'). In particular, the Cross-Border Guidelines emphasise that banks must strictly implement AML/CFT laws when handling cross-border business and adopt a risk-oriented approach. Specifically, the Cross-Border Guidelines stipulate that banks must, among other things, implement Know Your Customer measures, and effectively identify, evaluate, monitor, and control AML/CFT throughout the entire cross-border business process. Correspondingly, the Self-Assessment Guidelines provide principles for financial institutions established in China to identify and evaluate risks associated with AML/CFT. Notably, the Self-Assessment Guidelines detail AML risk assessments from corporate financial institutions, including inherent risk assessment and residual risk evaluation, and highlight the role and responsibility of senior management in relation to AML/CFT assessments.