A crackdown of money laundering in China is expected after the predominant state owned CCTV (China Central Television) aired undercover footage showing the Bank of China offers these services for a fee during a 20 minute bulletin.
A Business Spectator article republished in The Australian reports:
“We don’t care where your money is from or how you earn it, we can help you get it out of the country,” a Bank of China employee told CCTV. “We don’t care how black your money is or how dirty it is, we will find ways to launder it and shift it overseas for you,” according to a detailed CCTV investigative report.
China allows a maximum of $US50,000 to be sent off shore per year – simply not enough to snap up a bargain in Australia’s residential property bubble. Therefore investors need to go to a branch of the Bank of China who will help these citizens launder their money out of China. The scheme is marketed as ‘You Huitong’ translated as You Uncapped. According to the story, Bank of China staff colludes with Chinese immigration staff to disguise the origin of the funds.
According to the Business Spectator:
A senior manager with one of the big four Australian banks told the CCTV reporters that the Bank of China was crucial to the bank’s migration business.
“The money is very safe and will leave the country in a very grey channel. The Bank of China is the same as an underground bank [a Chinese term for black market operators that launder money],” he told CCTV.
He said the Bank of China has a huge business network abroad and only the Bank of China could carry out operations on such a large scale.
According to the CCTV bulletin, one sub-branch of the Bank of China in Guangdong – alone – has sent $970 million USD abroad this year.
But some Chinese do it alone, without the help of the Bank of China. The Sydney Morning Herald reports today that Brisbane Customs have intercepted two Chinese women arriving from mainland China with a suitcase full of $155,000 in US and Chinese currency.
A NAB survey released today shows the share of foreign buyers purchasing established Australian property fell to 10.2 per cent in the June quarter down from 13.9 per cent in the March quarter and the weakest in two years. Any imminent crack down by the Chinese government could have significant effects to foreign demand for Australian property in the months coming.
» CCTV Accuses BOC of Money Laundering – CRIEnglish, 9th July 2014.
» Australia’s SIV scheme a target for money laundering – The Australian, 9th July 2014.
» Chinese ‘washing cash’ in Australia – The Australian, 10th July 2014.
» Bank of China denies money laundering allegations – The Australian, 10th July 2014.
» Brisbane customs officials uncover $155k in luggage – The Sydney Morning Herald, 10th July 2014.
» Foreign demand for property easing, NAB survey shows – The Australian, 10th July 2014.