Underground Banks Explore Relevant Legal Issues

Underground bank refers to those illegal persons or organizations, which depends on certain legal or publicly recognized identity, utilizes or indirectly utilizes the fund settlement network of financial institutions to illegitimate traffic in foreign exchange, transfer cross-border fund and absorb deposits or extend credit without the approval of financial supervision and management departments. Underground bank is a manifestation of underground economy. People pass different judgments since its inception. Some people treat it as a hotbed of money laundering, others think it activates non-governmental economic. Although the illegal nature of underground bank determines that it can't be exposed to the light of day, the underground bank does not disappear, and its scale is getting larger and larger. Fujian Province is a famous overseas Chinese district and contiguous to Guangdong Province and Taiwan Province. Private economy in Fujian Province has developed fast; non-governmental financing is very active, and the demand of fund and foreign currencies. In order to seek profits, some criminals make use of China's long-term foreign exchange control and contradiction between supply and requirement of foreign exchange to wantonly engage in underground bank crime, which disrupts the order of financial administration. In recent years, Economic Investigation Department of Public Security Institution of our province has increased the penalties on underground banks, which to some extent has curbed the crimes of underground banks and achieved phrasal effects. However, the achievement on lawful level is far from satisfaction, and underground banks in our province remain to exist in spite of being continuously attacked and forbidden, the reasons include no legally significant regulation to direct the fighting on underground banks, great trouble in taking evidences to prove the crimes and vague recognition of legal responsibilities of the chairpersons and main participants of those banks. The paper not only tries to use the means of contrast analysis, compare investigation and empirical Study on the basis of the theory research of underground banks to explain the present situation of underground banks. Through the comparison of the measure at home and abroad, it also points out the existence of underground banks in china is a correspondence with the international irregular remittance system existing in many countries. Both of them have a certain historical origin and culture background, which means the fighting and control projects can not expect results overnight. An overall and long-term planning should be established. The paper focuses on the difficult legal points about fighting against underground banks and provides the relevant suggestions, so as to achieve the purpose that theory should serve practice.