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Deals planned to recover illegal assets from abroad

China Daily, December 29, 2014 Adjust font size:

China will strengthen financial intelligence exchanges with the United States and Australia to track corrupt Chinese officials' illegal assets and fight money laundering, a senior official from the Ministry of Justice said.

The People's Bank of China is in discussions with the US Financial Crimes Enforcement Network, a bureau under the US Treasury Department that monitors financial transactions to fight crime, said Zhang Xiaoming, deputy director-general of the ministry's legal assistance and foreign affairs department. Preparations are being made for a bilateral agreement to target assets that Chinese suspects hold overseas, Zhang said in an exclusive interview.

The central bank will also sign a similar agreement with the Australian Financial Intelligence Unit to monitor the suspicious flow of such assets, he said.

"After the agreements are made, China will share intelligence with the US and Australia, which will also offer information to their enforcement agencies to conduct further investigations," Zhang said.

"Once law enforcement officers in the US and Australia identify illegal funds, they will immediately initiate judicial procedures to freeze and confiscate those criminal proceeds in their countries."

More than half the known corrupt Chinese officials have transferred their illegal assets offshore and escaped to the US, Canada and Australia to avoid punishment, the Ministry of Public Security said.

Between 1990 and 2011, more than 18,000 corrupt officials fled overseas, transferring ill-gotten funds of up to 800 billion yuan ($128.5 billion), figures from the Chinese Academy of Social Sciences show.

In July, the Ministry of Public Security launched a special "Fox Hunt 2014" crackdown on economic fugitives who had fled overseas.

As of Dec 4, Chinese police had brought back 428 fugitives for alleged economic crimes from 60 countries and regions, but had seized only part of the illegal funds they had transferred abroad.

"Due to legal obstacles and different legal procedures, we face practical challenges in seizing and bringing back more assets," said Liu Dong, deputy director of the ministry's economic crimes investigation department.

Zhang of the Ministry of Justice said that in many cases, authorities are unable to provide judicial agencies in the US or Australia with all the necessary legal documents, including asset restraining orders that must be issued by Chinese courts to request assistance to freeze and seize the illegal funds.

"Although the US Federal Bureau of Investigation or Australian police have traced the assets and collected enough evidence to identify them as ill-gotten gains, they are unable to take immediate measures to freeze and confiscate them due to the lack of asset restraining orders from the Chinese courts."

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