How China Is Helping In The Global Effort To End Financial Crime

by Mohit J. White Hat Link Building Services

Financial crime is a threat for every company, person, and economy worldwide.

Criminals like to play on weaknesses and string stories that seem plausible, just to hide their true intention — getting away with crime.

China has always had their own ways when it comes to business, believing in guanxi (having personal trust) and privacy.

The problem with guanxi in our modern times is the space it gives for corruption and crime.

In recent years China has changed their rules and standards to form a cohesive China company check.

China kyb (know your business) has become quite similar to the global Customer Due Diligence standards.

What is KYB in China

The international organisation in charge of Anti-Money Laundering (AML) laws, the Financial Action Task Force (FATF) did a follow-up report on the status of China’s AML initiatives to find that China now has a rather better grasp on the regulations.

Know Your Business (KYB) procedures have now improved in China — now mandating AML laws for financial institutions throughout China.

This means that if you go to open a business account, you will have to answer several questions — both personal and about your business.

The information gathered as a part of KYB can include the company’s name, establishment date, financial records, and the names plus personal information of all people who have a 25% equity, partnership, or control of the business.

How to perform a company check

Chinese companies are required to register with the government now — giving the business name, industry, names plus personal information of anyone with stock or control of the company, and any other information to prove they are legitimate.

As a consumer or company, you should run a company check on each business you deal with — especially if money is exchanged.

To do this is a bit tricky though since the majority of the information, including company names, are in Chinese only.

Your first step should be to look at their licence and then input the information in the National Enterprise Credit Information Publicity System to check against the records — if the information doesn’t match, you should be wary.

Doing your part

Preventing and stopping financial crimes is not just for the government, banks, and businesses.

Everyone should do their due diligence when doing business with any company.

Check to ensure they have a valid business licence and that it matches all records.

Even a common individual can be a victim of a financial crime.

In recent years, China has begun to join the global effort to prevent and end financial crimes.

Though they still believe that privacy and guanxi is important, as a part of their culture, they have brought in some standards to evaluate the risks an individual or company poses for financial crime.

A China company check determines that a business is what they say it is and not just a cover.

When opening a business account at a bank, you will have to go through the standards of China kyb.

It is up to all of us to prevent financial crime.