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450 arrested in crackdown on illegal fund transfers out of China

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As reported by China’s official Xinhua News Agency, authorities in China claim to have arrested 450 suspects this year for illegally transferring money out of the country through use of offshore companies and/or underground banks. The announcement highlights China’s increasing efforts to control capital outflows. Under current laws, Chinese citizens and companies can only transfer USD $50,000 per year outside China without government approval.

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“Chinese police have solved 158 major cases involving underground banks and money laundering this year and apprehended 450 suspects, the Ministry of Public Security (MPS) said Tuesday.

In a crackdown launched by the MPS, the People’s Bank of China and the State Administration of Foreign Exchange, 192 locations where illegal banking services were provided have been discovered, involving nearly 200 billion yuan (30 billion U.S. dollars), the MPS said.

Crimes committed by underground banks are still rampant, although years of police efforts have managed to curb them to some extent, according to the MPS.

Underground banks in different regions have increasingly colluded with one another, with crimes spreading to more places and committed in more covert ways.

Underground banks have become channels for transferring illicit money obtained through all sorts of illegal activity, including public funds embezzled by corrupted officials, the MPS said.

This year’s crackdown has focused on cross-regional and cross-border underground banks, as well as those who transfer money gained from corruption and other crimes, according to the MPS.”




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