Maturing AML/CFT Regulatory System In Mainland China – Developments Since The 2019 FATF Mutual Evaluation

China's regulatory system of anti-money laundering ("AML") and combating the financing of terrorism ("CFT") aims to secure national security and maintain the stability of the financial market. In 2019, the Financial Action Task Force ("FATF") published the fourth-round mutual evaluation report on mainland China, showing gaps in meeting the FATF standards. Since then, the country has made great efforts and progress in strengthening its AML/CFT system. Key developments and trends include:

1. Compliance with international standards

China has made further steps to close gaps towards the FATF standards. By November 2022, China was compliant or largely compliant on 31 out of 40 FATF Recommendations, as shown in Figure 1 compared with 22 in the 2019 FATF Mutual Evaluation.