The China Banking and Insurance Regulatory Commission (CBIRC) has just issued a directive seeking to prevent the involvement of criminal elements with the country’s financial sector.
The “CBIRC Notice Concerning Work in Relation to the Special Struggle to Properly Clean up Crime and Expunge the Malign in the Banking Sector and the Insurance Sector” (中国银保监会关于银行业和保险业做好扫黑除恶专项斗争有关工作的通知), seeks to “strictly prevent organisations and individuals involved in crime or malignancy from entering the banking and insurance sectors.”
CBIRC said that “special struggle work” must engage in “targeted crackdowns” as well as strengthen management of high-risk areas, while the Notice calls for cooperation between regulatory departments, strengthening of monitoring and regulation, and the targeting of key criminal or malignant activities in the banking and insurance sectors.
The Notice strictly bans banking-sector financial institutions from providing accounts or account transfers to organised criminal groups, or helping them to convert assets into cash or securities, or remit funds abroad.
Banks are also strictly prohibited from providing financial services to organised criminal groups or individuals who engage in criminal activities, while insurers are banned from providing such parties with divided-investment-model insurance products, or providing them with letters of guarantee.
Banking and insurance organisations are banned from hiring personnel involved with criminal activities, or engaging in any form of business cooperation with them.
The Notice said that it would specifically target:
– The illegal establishment of entities that engage in or mainly engage in the provision of loan services;
– The use of funds illegally raised from the public to provide private loans;
– The use of illegal methods to expedite the repayment of loans, including wilful harm, illegal imprisonment, humiliation, threats or harassment;
– The use of the funds from financial institutions for high-interest re-lending;
– The illegal provision of loans to students, or the provision of loans without a designated use;
– The provision of high-interest loans under the guise of the sale of services or commercial products
– Organised forms of insurance fraud.
