China’s AgBank Says Building Anti-Money Laundering Center After US$215 Million Fine

By Reuters 24 March 2017

SHANGHAI, China — Agricultural Bank of China (AgBank), the country’s third-biggest lender, said it would spend three years building an anti-money laundering (AML) center to improve and centralize AML control, according to a statement circulated late on Thursday.

The move comes after US regulators fined the lender US$215 million for inadequate compliance, and days after Reuters revealed an AgBank account had been used by Burma rebels to collect funds.

“Compliance management for anti-money laundering, counter-terrorist financing and sanctions-related work has become increasingly important for all countries around the world,” AgBank said in a press statement emailed late on Thursday.

AgBank suspended an account used to fund ethnic rebels fighting government troops in Burma.

Over nearly two years, the Myanmar National Democratic Alliance Army (MNDAA) raised more than $500,000, deposited directly in an AgBank account or sent it via two mobile payment services – Tencent Holdings’ WeChat Pay and Alipay, part of Ant Financial, which is affiliated with US-listed Chinese e-commerce giant Alibaba.

The suspension came after Reuters sent AgBank a list of questions about its rebel-linked transactions, which compliance experts said could point to weakness in financial controls aimed at stopping terrorism.

AgBank said it would spend three years building a team of AML professionals, a set of effective AML tools, and a complete AML internal control system to bring AgBank’s compliance management up to a “first-class level by international standards.”

The AML center will be the “hub and core” for AgBank’s AML strategy, planning and management for its headquarters and branches at home and abroad, the bank said.

AgBank Governor Zhao Huan said at a recent AML training session that employees should increase their monitoring of reports of suspicious transactions and fully implement the rules to “avoid touching the red line of international sanctions” its statement said.