New Regulations Aimed at Cracking Down on Money Laundering in China

Hannah Feldshuh | Aug 14, 2019 12:00 pm | Add a comment | 2119 reads

From visas to tax law, it's clear that Chinese authorities are making serious efforts to standardize their enforcement processes. As an extension of that, as of Aug 1, 2019, China Customs will actively investigate any traveler who enters or leaves China with more than USD 20,000. Those found with more than that amount may face administrative penalties or criminal charges. Regardless of intent, Chinese authorities will consider this behavior as money laundering.

Here are more details on the recent notice, which are updates to China's existing anti-money laundering system:

If you are carrying large sums without legal declaration forms and customs agents determine there is evidence of smuggling, then agents may deduct the largest possible fine from the seized assets before returning any remaining foreign currency.
If you are found leaving the country with undeclared currency equal to less than USD 20,000, customs agents can decide whether to impose administrative punishments or issue a warning.

The key features within existing legislation include:

China requires travelers to declare if they are carrying more than USD 5,000. For amounts less than USD 5,000, a permit is not required except in the event that the traveler is making multiple trips within a short period.
In order to legally take more than USD 10,000 out of the country, travelers must apply for a Foreign Exchange Exit Permit before leaving as detailed by Article 5 of China's Interim Measure for the Administration of Entry and Exit of Foreign Currency Banknotes. To complete this process, you must go to your Chinese bank with a deposit certificate, passport, and valid visa.
Those in possession of more than USD 10,000 will need to apply for a permit at the State Administration of Foreign Exchange.
In the case of those approved for multiple permit cards, customs agents will not release funds that exceed USD 10,000.
Permit cards will expire 30 days after issuance.

Confused? Check this table for an easier visual breakdown:

Amount	Need to declare?	Need a permit?	Penalty
< USD 5k	No	No	None, unless multiple trips are made within a short period
USD 5k to < USD 10k	Yes	No	None, unless multiple trips are made within a short period
USD 10k to < USD 20k	Yes	Yes	If found without a permit, customs agents may impose administrative punishments or issue a warning
USD 20k or more	Not permitted	Not Permitted	May be treated as money laundering