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China cracks down on money laundering

In a further move towards improving financial regulation in Chinas booming market, the Chinese government has cracked down heavily on illegal financial operations. Dozens of arrests have been made and millions of Yuan been seized in a quest to clean up the mess made by unlicensed banking operators and big time fraudsters.
Seven large underground banks said to have been laundering $1.75 billion have been destroyed this year alone, and the Economic Crime Investigation Department is not nearly done yet.

China has awakened relatively late to the fight against money but is no actively joining it. With money laundering making up up to 5 percent of GDP, there remains a lot to be done. Since 2002 alone, the Chinese government has helped foreign police with the investigation of more than 400 money-laundering cases. In this light, Chinas first anti-money laundering law will come into effect, demanding financial and some non-financial institutions to keep records of clients and transactions and to report suspect transactions. The law will also broaden the definition of money laundering to include corruption and bribery and empowers banks to freeze capital for two days.

Money is mainly laundered with the help of underground banks, online banks, smuggled cash, investment and international trade, and cutting off these sources of money help fight some of the most destructive crimes to society, like organized crime and drugs, terrorism, corruption and financial fraud.