China To Join Money-Laundering Fighting Body
In 2005
China plans to join the Financial Action Task Force
(FATF) as a full member in 2005. This is an international
task force which fights money-laundering and terrorist
financing on an international level in 2005.
Current membership of the group is dominated by the
developed countries which are members of the OECD (Organization
for Economic Cooperation and Development), which is based
in Paris. Other major developing countries which are
already members are Russia and Brazil.
The FATF has assumed a major role in the war against
terrorist financing following the terrorist attacks made
against the US on Sept. 11, 2001.
China's reason for joining is different, and is mainly
focused on recovering stolen state assets from Chinese
state-owned enterprises (SOEs). In most cases, this involves
officials nearing retirement who use government funds
for gambling and other purposes.
Over the Chinese new year, the Chinese government has
been involved in a strong crackdown on illegal gambling
operations and casinos in China, and also in the neighboring
countries of North Korea, Vietnam and Myanmar. Most of
the casinos in the neighboring countries were opened
by Chinese business persons to provide entertainment
to senior management of state-owned enterprises. Government
officials who have been involved have been removed from
power, and television programs have focused on the dangerous
side-effects of gambling.
As China heads toward a market economy, corrupt officials
have tried to embezzle state-owned funds for their own
benefit. A major challenge for China has been how to
clean up the bad debt on the books of China's state-owned
banks, which are believed to total more than US$500 billion.
While there have been some
successes in recovering funds, the Chinese government
realizes that effective international measures need to
be handled through FATF.
While the crackdown has been widely reported in the
Chinese-language press, little mention of it has been
made in the English-language press. However, the Chinese
government's determination to join FATF on a fast-track
basis underlines that it understands that corruption
has international consequences, and that it cannot tackle
the problem completely on its own.
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