The Central Commission for Discipline Inspection particularly targeted practices within the Party that exemplified extravagance, bureaucracy and undesirable work practices. (Photo : www.business.financialpost.com)
China’s central government has stepped up its anti-graft drive by cracking down on illegal lending and money-laundering operations of so-called “black banks,” in an effort to prevent stolen assets from being taken out of the country, the China Daily reported.
According to the Ministry of Public Security, "black banks" and illegal currency exchanges have enabled some former government officials and senior managers of state-owned companies accused of corrupt activities to flee the country. Most have escaped to popular destinations, such as the United States and Australia, where the absence of bilateral extradition treaties and differences in international law and legal process have ensured that they are safe from extradition.
The report said that the ministry started the three-month operation against underground lenders, money launderers and offshore funds at the end of August.
Meng Qingfeng, vice minister of public security, said that the ministry will work with the People's Bank of China (PBOC) and the State Administration of Foreign Exchange (SAFE) involving the sharing of information and establishing a mechanism to coordinate and conduct rapid investigations into suspicious outbound flows of assets.
Meng added that a special force will be set up to fight against underground banks and probe evidence of economic crimes.
He also said that the ministry will increase the flow of related information, and organize a series of educational events to show the public how to conduct overseas financial transactions legally.
Officials said that a network of underground banks has been used by corrupt officials or business leaders who are secretly planning to leave the country and send the millions of dollars and assets they illegally obtained to countries where they want to escape.
The government said that the outflows of illegal assets are a severe threat to national economic security, so the government is determined to stop money-laundering operations and improve foreign exchange controls to maintain financial and political stability.
According to statistics released by the ministry in April, the combined operation of the Public Security Ministry, the PBOC and SAFE against underground money exchanges has apprehended more than 230 suspects in many major cases, and more than 100 black banks have been closed down, confiscating about 670 billion yuan ($105.5 billion) in assets.
