Original title: Four licensed institutions including Tenpay for foreign exchange business were fined
The rectification of foreign exchange business violations continues. On November 28, a reporter from Beijing Commercial Daily noticed that the Shenzhen Branch of the State Administration of Foreign Exchange recently disclosed six administrative penalty decisions in a row, involving multiple operating entities such as third-party payment institutions, banks, and securities companies.
2.78 million yuan fine
Four licensed institutions were involved in the fines recently disclosed by the Shenzhen Branch of the State Administration of Foreign Exchange.
Among the institutions that were punished, Tenpay Payment Technology Co., Ltd. (hereinafter referred to as “Tenpay”), the operating entity of WeChat Pay, failed to submit relevant materials in accordance with regulations, conduct foreign exchange business beyond the scope of registration, and failed to comply with regulations. For foreign exchange sales and failure to collect necessary information in accordance with regulations, he was given warnings, confiscated RMB 20,000 of illegal gains, and imposed a fine of RMB 2.78 million.
The ticket showed that Tenpay violated Articles 4, 5, and 7 of the “Measures for the Administration of Foreign Exchange Business of Payment Institutions”, which involved verification of the authenticity and legality of market transaction entities, payment institutions and cooperation Banks should perform various content including anti-money laundering and anti-terrorist financing obligations in accordance with the law.
CITIC Securities Co., Ltd. (hereinafter referred to as “CITIC Securities”) has 7 illegal acts. The specific illegal facts include QDII over-quota remittance, missing declaration of balance of payments statistics, withdrawals from accounts of non-identical B-share customers, and overseas H-share raised funds. The special account is used beyond the scope, the B-share margin account has exceeded the expenditure, the foreign exchange registration for overseas investment has not been completed, and the comprehensive position statement of foreign exchange settlement and sales is late.
In accordance with the relevant provisions of the “Regulations of the People’s Republic of China on Foreign Exchange Administration” and “Administrative Punishment Measures of the State Administration of Foreign Exchange”, CITIC Securities was ordered to make corrections, issued warnings, confiscated 810,000 yuan of illegal gains, and imposed a fine of 1.01 million yuan. At the same time, the relevant responsible persons were given a warning and a fine of 80,000 yuan.
In terms of banking institutions, Shenzhen Rural Commercial Bank was fined 1.0543 million yuan for illegally handling foreign exchange payments under general trade, illegally handling personal over-limit cash withdrawals, and illegally handling personal foreign exchange collection and payment and foreign exchange settlement business. The Agricultural Bank of China Futian Sub-branch was fined 768,900 yuan for failing to conduct a reasonable review of the authenticity of the transaction documents and their consistency with foreign exchange receipts and payments when handling the receipt and payment of current account funds.
Wang Pengbo, a senior analyst at Broadcom Analytics, pointed out that from the content of the fines issued by relevant agencies, over-range operations and illegal handling of business when conducting foreign exchange business can easily disrupt the order of the foreign exchange market and may even lead to foreign exchange evasion.
“The SAFE cracked down on foreign exchange business violations in accordance with the law, mainly to strengthen foreign exchange business management, maintain normal market order, guide market entities to conduct business in accordance with the law, and prevent and resolve potential risks.” A macro researcher at a commercial bank explained to a reporter from Beijing Commercial Daily. .
Require due diligence
Regarding the current rectification and follow-up business planning of violations disclosed in the ticket of the State Administration of Foreign Exchange, Shenzhen Branch, reporters from Beijing Commercial Daily also asked Tenpay, CITIC Securities, Shenzhen Rural Commercial Bank and other institutions for further understanding.
Among them, Tenpay responded to the Beijing Business Daily reporter saying that in response to the problems found in the routine inspections from 2019 to 2020, Tenpay has formulated an improvement plan as soon as possible and implemented it item by item. The rectification has now been completed. Follow-up will further strengthen compliance management under the guidance of the Shenzhen Branch of the State Administration of Foreign Exchange.
On the other hand, a reporter from Beijing Commercial Daily noticed that since 2021, the State Administration of Foreign Exchange and its branches have imposed penalties on operating agencies and individuals in violation of foreign exchange regulations in the form of fines or notifications.
In the notice on foreign exchange violation cases published on the official website of the State Administration of Foreign Exchange on October 29, in addition to notifying corporate entities of illegal foreign exchange trading cases, it also mentioned a number of individuals illegally buying and selling foreign exchange through underground banks, which violated the “Personal Foreign Exchange Administration”. Article 30 of the Measures stipulates that not only fines have been imposed, but relevant information on the punishments will also be included in the central bank’s credit investigation system.
The aforementioned macro researcher of the commercial bank told the Beijing Business Daily that violations of foreign exchange business regulations can easily lead to abnormal cross-border capital flows, aggravate market fluctuations, lead to distortion of relevant statistical indicators, and increase the difficulty of risk warning and macro-control. “Therefore, relevant institutions are required to improve internal governance, consolidate their main responsibilities, and enhance their awareness of conducting business in accordance with laws and regulations. Individual users should also regulate themselves and avoid illegal activities.”
“By imposing severe penalties and notifications on foreign exchange violation cases, the State Administration of Foreign Exchange has issued warnings to some institutions and individuals that have a fluke mentality, and once again reminded banks, payment institutions and other entities to comply with regulations.” Wang Pengbo believes that relevant institutions are the most The important thing is to meet the KYC (“Know Your Customer”) principle, strengthen business review and focus on key businesses, do a good job of due diligence, eliminate false and deceptive foreign exchange transactions from the root cause, and comply with the bottom line of compliance.
Beijing Commercial Daily reporter Yue Pinyu Liao Meng
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