China’s latest Anti-Money Laundering rules on special preventive measures have come into effect, significantly strengthening the country’s financial crime framework. The updated regime introduces clearer tools for cross-border capital supervision, allows for immediate enforcement without prior notification, and imposes personal liability on senior management where internal controls are found to be inadequate.

Together, these changes mark a material shift in how AML risk is supervised, enforced, and governed within China’s financial system.

China has continued to enhance its AML framework in response to evolving financial crime risks, including cross border capital flows, misuse of digital channels, and increasingly complex laundering typologies. The new rules clarify and expand the authorities’ ability to apply special AML preventive measures in situations where money laundering risk is assessed to be elevated.

The framework reflects a more proactive and intervention-focused approach, moving beyond reactive enforcement.

Enhanced Cross-Border Capital Supervision

A central feature of the new rules is the strengthening of cross border capital supervision. Authorities are now better equipped to monitor and restrict transactions that pose heightened money laundering or illicit finance risks, particularly where funds move rapidly across jurisdictions.

These measures are designed to address vulnerabilities linked to:

• Complex international fund flows
• Use of offshore structures
• Layering through multiple jurisdictions
• Evasion of capital and AML controls

For institutions engaged in cross border business, this represents a clear signal of increased regulatory scrutiny.

Immediate Enforcement Without Prior Notification

One of the most significant developments is the ability for regulators to apply certain AML preventive measures without providing advance notice to the affected institution or individual.

This power enables authorities to act swiftly where there is a risk that advance notification could lead to asset dissipation, obstruction, or concealment of evidence. From a compliance perspective, this underscores the importance of ensuring that AML controls operate effectively at all times, not only during supervisory engagements.

The revised AML framework introduces clearer personal liability for senior management where institutions fail to establish or maintain effective internal AML controls.

Senior executives and responsible officers may be held accountable if deficiencies in governance, resourcing, or oversight contribute to money laundering risk exposure. This represents a notable shift toward individual accountability and reinforces the expectation that AML compliance is a senior management responsibility, not solely a compliance function issue.

Governance and Internal Control Expectations

Under the new rules, institutions are expected to demonstrate that AML frameworks are:

• Risk based and proportionate
• Adequately resourced
• Embedded into business operations
• Subject to effective senior oversight

Weak or poorly implemented internal controls may now carry direct consequences for both institutions and individuals.

Implications for Financial Institutions and Multinational Firms

The updated AML measures have particular relevance for:

• Banks and payment institutions
• Firms engaged in international trade and investment
• Multinational groups with China operations
• Institutions handling high-volume cross-border transactions

Organizations should reassess whether their internal controls, escalation processes, and governance structures are sufficient to meet the heightened expectations.

Alignment With Global AML Trends

China’s reforms align with broader global trends emphasizing early intervention, cross border risk management, and individual accountability in AML compliance. Similar themes are increasingly visible in enforcement actions and legislative reforms across major financial centres.

For global compliance teams, this reinforces the need for consistent group wide standards while remaining responsive to jurisdiction specific enforcement powers.