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US Treasury Under New Mandate to Probe Chinese Money Laundering

Lin Yang

   WASHINGTON - The U.S. Treasury Department will investigate the risks
   posed by China's money laundering and develop a strategy to defend
   against them, according to language in the National Defense
   Authorization Act of 2021 requiring specific inquiry into what experts
   have long called a serious threat.

   [1]Targeting Chinaunderscores U.S. congressional lawmakers' concerns
   over the lack of transparency in China's financial regulatory system
   and "who really controls shell companies being used to move billions of
   dollars through and within its borders," wrote Nate Sibley, a research
   fellow at the [2]Hudson Institute, in an articleon the think tank's
   website.

   "A dedicated study and a dedicated strategy for [combating] Chinese
   money laundering is a major development and indicates that the U.S.
   government is finally taking this threat seriously," Sibley told VOA
   Mandarin. "To date, we have relied on investigative reporting and
   occasional details in indictments to understand this problem. The
   contrast with, for example, Russian money laundering, which gets a lot
   more attention, is remarkable given that [China] represents the
   foremost illicit finance risk jurisdiction worldwide."'¯

   According to the [3]U.N. Office on Drugs and Crime,money laundering
   accounts for $2 trillion a year, or about 5% of the world's GDP.

   The illegal activity is designed to make large amounts of money
   generated by a criminal activity, such as drug trafficking, appear to
   have come from a legitimate source, according to [4]Investopedia. The
   money from the criminal activity is considered "dirty." The process to
   "clean" it can be as time-tested as using cash to purchase assets such
   as real estate or as current as manipulating cryptocurrencies.

   "[5]Money laundering encourages criminal behavior because it allows
   criminal money to be used in daily life," said a report from the
   Anti-Money Laundering Center of the Netherlands. "The investments made
   by criminals may even give them a degree of influence over people,
   businesses and legal sectors. This is why money laundering is such a
   serious threat to the economy and why it also affects the integrity of
   the financial sector."

References

   1. https://www.govtrack.us/congress/bills/116/hr6395
   2. https://www.hudson.org/research/15573-countering-chinese-communist-party-threats-with-corporate-transparency
   3. https://www.unodc.org/unodc/en/money-laundering/overview.html'%80%AF
   4. https://www.investopedia.com/terms/m/moneylaundering.asp
   5. https://www.amlc.eu/what-is-money-laundering-2/

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