On The Legal System Of Suspicious Transaction Reporting In Chinese Commercial Banks

Banking offices worldwide and convenient cash transfermation systems make commercial banks be the important front for money laundering and the important channel for terrorist financing. Commercial banks play an important role in terms of anti-money laundering and cracking down on terrorist financing to protect the legitimate interests of the commercial bank customers, the stability of the financial system and the operation of the national economic policies. And it also has a positive effect on our country’s anti-corruption action. The system is perfect or not directly related to the quality of China’s anti-money laundering operations.Suspicious transaction reports are the premise of the anti-money laundering operation. Although the legislation starts faster after we sighed the United Nations Drug Conventions, anti-money laundering legislation started later in our country, there are still so many defects in laws. The legislative is not high, so the commercial banks do not pay much more attention to the implementation. Besides, there are a lot of problems in the implementation. The standard of the suspicious transaction is too detailed so that the commercial banks just audit information according to the standard. So, the utilization is not high because of too much useless information and too many defensive reports. And all of these are not good for the anti-money laundering operation, and these defects do not adapt to the current financial order. In addition, lack of incentive system make the commercial banks negative, and they lack independent judgment to the suspicious transaction. The commercial banks are for-profit organization, if the costs outweigh the benefits, this system is invalid. Furthermore, suspicious transaction reports involve the privacy of the financial consumers, it is not preceded well in the relevant legal laws, and still lacks the relief measures on consumers. So, it can not protect the legitimate rights of the financial consumers.At present, the suspicious transaction reports are received by China Anti-Money Laundering and Analysis Center, and the system is supervised by the members of the Ministerial Joint Money Laundering. But, there are a lot of defects in the system. For example, it is short of the perfect Financial Intelligence Unit, so the efficiency too low to analysis the suspicious transaction reports highly. And the reports need to transfer too many members makes a higher cost but a lower efficiency of combating money laundering. And if we can establish perfect information sharing mechanism and advanced financial intelligence center, those problems can be solved.And now, the commercial banks of suspicious transaction reporting system has been relatively mature in America and Britain, we can learn the advanced experience combining the specific situation from them. First, we should improve the legislative level in the Anti-Money Laundering Law to improve the commercial banks pay more attention to the system. In addition, we should improve the governance system and incentive system and strengthen the responsibility of the commercial banks to improve the enthusiasm and sense of responsibility. Finally, we should strengthen the protection of financial consumers’ rights and interests, so that the system will be perfect.