Financial institutions that fail to effectively guard against money laundering have been hit with a surge in fines after China’s central bank changed the way it calculates the punishments, reported Caixin.
The People’s Bank of China (PBOC) handed down nearly four times more fines in the first quarter of 2020 than it did over the same period last year. The PBOC penalized 93 institutions and their staff a total of RMB 183 million ($25.9 million) for violations of money laundering regulations in the January-to-March period.
Until recently, many rule breakers would only have to pay a few hundred thousand RMB for money laundering violations, a practice derided by critics who said the penalties were not serious enough to act as an effective deterrent. In all of 2018, the PBOC doled out penalties totaling RMB 189.3 million for money laundering violations, roughly the same amount they doled out in the first quarter of this year.
Since the beginning of 2020, the PBOC has imposed four fines of over RMB 10 million, including the biggest fine on record, a RMB 61.2 million penalty against payment services provider Shenzhen RYX Infotech Co. imposed by the PBOC’s Shenzhen branch.