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Destination America for China's corrupt officials
By Xu Fang and Maggie Zhang | 2011-6-16 | NEWSPAPER EDITION/SHANGHAI DAILY
AMERICA is the destination most favored by high-ranking corrupt Chinese officials fleeing
the country with large sums of money, according to a report by China's central bank.
Other popular destinations include Australia and the Netherlands.
Those unable to get visas for Western countries opt for temporary stays in small countries
in Africa, Latin America and eastern Europe while they wait for a chance to move to more
developed countries, the People's Bank of China report said.
Low-ranking officials usually escape to neighboring countries such as Thailand, Myanmar,
Malaysia, Mongolia and Russia, it said.
The report cited research by the Chinese Academy of Social Sciences which revealed that about 16,000 to 18,000 government employees, police officers, judicial officers, senior managers of government institutions and state-owned companies, as well as employees of Chinese organizations in foreign countries, had escaped abroad or gone missing since the middle of the 1990s.
The money they carried with them is said to add up to 800 billion yuan (US$123 billion).
The report said the numbers were rough statistics because there were no official figures so far.
Corrupt officials used several methods to illegally transfer assets abroad including large cash withdrawals using credit cards overseas, according to the report by the central bank's anti-money laundering monitoring and analysis center. Fake trade documents were also used to transfer capital out of China.
The report said transferring money to relatives, mistresses and other individuals had become a new way for corrupt officials to transfer assets abroad, as shown by major corruption cases uncovered in recent years. Some turned to cash smuggling, but that was a high-risk enterprise.
Other methods included overseas investments, making use of offshore financial centers and taking bribes overseas.
The central bank said that authorities in "sensitive industries" such as finance, state-owned monopolies, transport, land and construction sectors and tax, trade and investment departments should increase inspections and strengthen cooperation between banking regulators and other government bodies to fight money laundering.
In China, banks, brokers, futures companies and insurers are required to report transactions involving huge sums of cash to regulators as the country beefs up its efforts to curb money laundering.
Cross-border transfers of more than US$10,000 involving an individual have to be reported to the central bank. Cases of huge sums of cash, such as daily transactions of 200,000 yuan or more or the foreign currency equivalent of US$10,000 or more have to be reported to the anti-money laundering center.
Big sum cases can also be defined as daily transfers between firms valued at over 2 million yuan or foreign currency valued at over US$200,000.