IMF Staff Country Reports

According to the recent unpublished domestic national risk assessment (NRA),2 China faces
relatively lower ML/TF threats from abroad with a higher risk of domestic criminal proceeds
being transferred overseas. The update to the NRA concluded that the overall level of ML risk is
medium and has remained the same (since 2017). Notably, there have been some changes in the
major types of illicit proceeds-generating crimes, with tele and internet fraud becoming the most
significant ML threat. The domestic understanding of risks including those related to corruption and
domestic politically exposed persons (PEPs) may suffer from blind spots and could be further
deepened. For example, given the dominant role of the state and state-owned-enterprises in the
economy, more detailed analysis of corruption, as a predicate offence, would be worthwhile along
with an assessment of the levels of politically exposed persons (PEPs) and the quality of related
preventive measures (discussed further below). To improve the understanding of risk among
government entities and the private sector responsible for reporting suspicious transactions, the
publication of analysis from the NRA should be considered.