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In a joint statement from the Ministry of Public Security, People’s Bank of China, and the Ministry of State Security, China announced new rules on freezing the assets of terrorist organizations.
The rules which are said to be effective immediately, expand China’s counter-terrorism fight into the financial realm, emphasize giving government authorities the ability to cut off the funds of domestic terrorist groups as well as their overseas partners. Sources say that the move highlights Beijing’s ongoing concern of terrorist organizations in western China and their connections to affiliates in other countries such as Pakistan.
China has been suffering a spate of recent conflicts with Islamic extremist groups in western Xinjiang Province. Since last April, nearly 100 people have been killed in clashes between police and locals. Last year, China asked Pakistan to turn over several members of the East Turkestan Islamic Movement (ETIM) who, China says, were wanted for terrorist attacks in Kashgar.
Since 2006, China has been a party to the International Convention for the Suppression of the Financing of Terrorism, and in 2011 the National People’s Congress passed a policy requiring all relevant government authorities to take measures to cut funds revealed to be directed to terrorist organizations.
The new rules set an automatic reporting requirement for all financial institutions where reasonable suspicion exists that customers or transactions are connected with terrorist activities. Moreover, the funds of any person on a to be determined government terrorist watch list, must be frozen and their financial activity closely monitored. The new measures also include a ‘gag-order’ which forbid financial institutions from informing customers that they are under surveillance or that their funds have been frozen.
The rules also require that when financial institutions are asked to freeze funds or reveal financial information by a foreign government they must first make sure that proper formalities have been followed.
A financial institution’s failure to comply with the new rules is grounds for punishment, the rules state.
