China eases cash transaction reporting rule in draft AML overhaul

China’s financial regulators have proposed scrapping a rule that required individuals to report cash transactions involving over 50,000 yuan (HK$54,637), in a shift toward a more risk-based anti-money laundering approach.

The People's Bank of China, the National Financial Regulatory Administration, and the China Securities Regulatory Commission have jointly issued a draft rule on customer due diligence and record-keeping requirements for financial institutions, mainland media reported. 

The new draft removed the mandatory requirement for individuals making single cash deposits or withdrawals of over 50,000 yuan to declare and register the source or purpose of the funds — a rule set out in a 2022 AML regulation that was never implemented.

The reports stressed that dropping the blanket 50,000-yuan reporting rule does not signal looser AML oversight. The draft adds targeted measures focusing on high-risk areas, including banning simplified checks in high-risk scenarios, monitoring sensitive groups, and tightening scrutiny of transactions linked to high-risk regions.

Under the new proposal, the declaration requirement would still apply to certain transactions, such as cash remittances and purchases of physical precious metals exceeding the same threshold. In these cases, institutions must conduct due diligence, record basic customer information, and retain copies of valid identification documents, the reports said.