In January, 2022, the People’s Bank of China, China Banking and Insurance Regulatory Commission and China Securities Regulatory Commission jointly issued a new management measure on financial institutions to further improve the anti-money laundering supervision system and raise the work level. The new measure will come into force since March 1, 2022.
source: www.pbc.gov.cn
According to the new management measure, there are some new policies on cash, which will have an influence on people who need to do cash transactions, so that people should pay attention to the new policies and have a basic understanding about them.
source: www.pbc.gov.cn
Financial institutions shall conduct due diligence and register the basic information of customer’s identity if they provide one-off transactions such as cash remittance, cash exchange, bill payment, and sales of various financial products for customers who have not opened accounts in the institutions and the transaction amount is more than RMB 50,000 in a single transaction or over USD 10,000 in the equivalent of foreign currency.
Reminder
The financial institutions include development financial institutions, policy banks, commercial banks, rural cooperative banks, rural credit cooperatives, village banks and other financial institutions. The institutions engaged in foreign exchange business shall also follow the rules.
Besides, commercial banks, rural cooperative banks, rural credit cooperatives, rural banks and other financial institutions shall identify and verify the customer's identity, understand and register the source or use of funds when the customer (a natural person) need to access the cash of more than RMB 50,000 or over USD 10,000 equivalent in the equivalent of foreign currency in a single transaction.
What is the significance of the new policies?
1.Promote the development of the financial industry, and make efforts to improve the abilities to guard against the financial risks and prevent money laundering in China.
2.Adhere to the risk-based concept to anti-money laundering and strengthen the anti-money laundering work of financial institutions.
3.Link up with the international standards of anti-money laundering, and constantly improve the anti-money laundering supervision system.
What else should you focus on?
As the new management measure will be put into practice soon, you should not only focus on anti-money laundering, but also should be aware of the importance of tax compliance, which also means you are required to comply with tax laws and regulations.
Since the new policies are implemented by financial institutions on March 1, the taxation department can check the cash receipts and payments with the banks to get the evidence when investigating cases of issuing false invoices.
It means that cash access will be supervised. Meanwhile, the State Taxation Administration will also strengthen supervision and control. China has entered the era of "mandatory regulation" of taxation, and the "supervision network" woven by the state is becoming stricter. The whole business chain requires legal compliance.
In order to save tax legally and avoid tax risks effectively, enterprises need to find professional tax consultants to provide tax suggestions and services to ensure the normal operation of their production and operation. HACOS has professional finance and tax teams and focuses on business services. If you need any help, welcome to contact us!
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