As part of an ongoing effort to curtail domestic corruption, the
Chinese government continues to tighten regulations governing the
commercial prepaid card market. On November 23, 2011, China's
Ministry of Commerce ("MOFCOM") released its Rules on
the Administration of Single Use Commercial Prepaid Cards (draft
for feedback) (the "Draft Rules")1 for
public comment through December 23, 2011.2 As the third
government release in 2011 in connection with this popular form of
gift-giving, the Draft Rules impose significant compliance
obligations on card issuers.
I. Background
The Chinese commercial prepaid card market has grown rapidly in
recent years. As a popular alternative to cash gifts, prepaid
cards, while promoting domestic consumption, have also been tied to
money laundering, corruption and tax evasion. On May 23, 2011, the
Opinions on Regulating the Administration of Commercial Prepaid
Cards (Guo Ban Fa [2011] No. 25) (the "Opinions")
were jointly issued by a
