4 Ways of Getting Money Out of China; Bank of China Modified Statement on Money Transfer Program Attracts Attention

How to move money out of China? There's 4 ways suggested in this article: 揭秘国内“富跑跑”们4条洗钱密道:哪种最常用?. The article starts off by saying if you saw the CCTV report on BOC "You Huitong" and think you can go down to Bank of China in Guangzhou to move ¥10,000,000 overseas, forget about it. The guys on camera are just exaggerating; you will only be able to transfer $50,000 like everyone else.

If you really want to get around foreign exchange controls, you can use underground banks that have an onshore and offshore capital pool. They can match offshore demand with onshore demand. No money actually crosses the border, they swap ownership between people who want to own foreign currency overseas and foreigners who want to hold renminbi in China. If money needs to move across the border, it can be done with fake trade contracts or fake letters of credit. Yet another method is to find dozens of individual account holders. Chinese citizens can legally convert up to $50,000 in foreign currency. The third method is to give cash directly to a trade company, which uses various methods to move money offshore. Finally, a Chinese citizen can go to Macau and use the system of pawn shops, or even motor boat smugglers.

The article concludes with a few other methods. One is to set up an offshore company in Panama and slowly move funds through third parties. Another is investing in U.S. real estate through a fund and asking that when the fund matures, the proceeds are deposited into an overseas account. Another is to buy an expensive insurance policy from a Hong Kong company and then cancel it in Hong Kong.

As for the Bank of China story, it appears Bank of China has a legal remittance program that is part of China's financial sector reform. It may have been abused by some bank employees and customers. Some abuse is inevitable given that this is one of the first legal ways for Chinese to make large fund transfers overseas—there is a lot of pent up demand. Furthermore, regulators must have expected some abuse by people who want to transfer money, but don't fall under the pilot reform's specific rules. However, this does not extend to moving illegal funds:
"No matter where our client's money is from and where it goes, we can help them get it out," said the staff member, "To put it simply, we help your launder money." According to the report, the BOC takes about 0.3 to 0.4 percent of the total amount of each exchange in fees.

In its report, CCTV alleged that the bank has violated China's foreign-exchange rules by providing services that help individual clients transfer capital exceeding national limits, stating further that BOC was helping its clients move "dirty money" abroad.

After the news broke, two Guangzhou BOC branches told the Global Times they are still providing the service, and requests are specially handled by account managers. Representatives of both banks declined to provide further details about the program.
We'll see how the story develops. The above article in Chinese thinks the guys on camera talking about money laundering are just blowing smoke.

If there were illegal money transfers by criminals, I assume Bank of China has records of its fund transfers; if not some Australian banks on the other end may have records. Chinese ‘washing cash’ in Australia

At the bottom is the statement from the Bank of China's English website. The initial Chinese statement that appeared on the company's Weibo and website was amended, and the subtle changes in the wording attracted lots of attention in China.

Here's 21st Century discussing the changes: 被疑洗钱后12小时:中行两度澄清修改三处措辞
As of press time, the Bank of China CCTV exposure, "money laundering" storm less than one day, the incident is still fermenting.

21st Century Business Herald reporter noted that the Bank of China in the evening of July 9 around 21:00 release notes, there are three changes. First, the "attention to CCTV and other news media recently on my line 'gifted Huitong' business coverage" in the "CCTV" faded; second is the "business methods and operating procedures have been done prior to the relevant regulatory authorities of the reporting "to" business methods and operating procedures have been pre-filing "; Third, the previous formulation," each business activities are submitted to the regulatory system "to" enter each business are regulated business systems. " .

Nuances sparked reverie. 21st Century Business Herald restore the Bank of China, CCTV exposure, "money laundering" of events the whole story.

BOC Chinese statement: 中国银行关于“优汇通”业务的说明 (BOC Explanation of 优汇通 Superior Remittance Service)


On 9 July 2014, some news media made reports on the “You Hui Tong” service of the Bank. Such reports are not consistent with the actual situation of the Bank.

After reporting to relevant regulators and on the basis of carrying out pilot cross-border RMB business, the Bank and relevant banks have, in compliance with the regulatory requirements, launched a pilot scheme of RMB cross-border transfer service in 2011, which is only offered for the two purposes of investment emigration and purchases of overseas properties. Up to now, there are many commercial banks which have launched this type of service as a pilot scheme in Guangdong area.

In the process of conducting this business, the relevant branches of the Bank have put in place robust business operation procedures in compliance with the relevant regulatory and anti-money laundering requirements, and adopted unified and clear standards applicable to proof of use of funds and proof of source of funds. These measures and operation procedures have been reported to the competent regulatory authorities. Precautionary measures are also adopted to prevent business risks, including reviewing transaction documents on a case-by-case basis and reporting each transaction to the business regulatory system.

Financial products innovation is a cornerstone for the banking industry’s development and reform and for the satisfaction of clients’ needs. With more and more enterprises and individuals “going
global”, the internationalization of RMB and financial services is an irreversible trend. The Bank will endeavour to continue to offer high quality financial services to our clients within the legal and regulatory compliance framework.

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