China's fight against illegal cross-border money flows has been ineffective because it does not have a single department in charge of the collection and analysis of intelligence, Foreign Exchange quoted the deputy director of the State Administration of Foreign Exchange (Safec) as saying. Ma Delun added that China had nothing similar to regulations issued by the US Banking Association, which order banks to look out for suspicious behaviour by customers or staff. The head of the administration's investigation branch said that the two main sources of illegal foreign exchange trading were related to tax avoidance and money laundering and that the main source of intelligence was from tipoffs from the public.
In July, the People's Bank of China set up a department to combat money laundering, giving it the responsibility to draft laws and implement enforcement measures to be taken by the country's banks.
The Guangdong branch of Safec published figures in September showing that since the start of 2000 it had arrested 247 people in 146 operations against illegal currency trading involving Yn86m, with 45 of the operations being conducted in the first eight months of this year.
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