From August 1, any cash transactions - individual or accumulated on the day - related to the purchase of gold, silver, platinum or precious stones such as diamonds, gemstones... worth 100,000 yuan or more (about 364 million VND) will have to be reported mandatory to the China Anti-Money Laundering Monitoring and Analysis Center within 5 working days.
This is part of a new regulation issued by the People's Bank of China (PBoC) to combat money laundering and terrorist financing, especially targeting organizations and enterprises trading in precious metals and precious stones nationwide.
According to the previous announcement, financial institutions and jewelry stores must comply with the principle of "Understanding customers", conducting customer records investigations based on the nature of transactions, the level of risk of money laundering and personal records before conducting large transactions in cash.
Precious metals under control include gold, silver and platinum, while the precious stone group includes diamonds and pearls.
This move is said to be a reaction to the fact that domestic gold prices in China have increased sharply this year, as domestic market demand skyrocketed. In April, spot gold prices and Shanghai Gold Exchange futures both set a record high, according to Xinhua.
Tight control of cash transactions also shows that China is looking to tighten loopholes in the informal financial system, especially as gold and precious stones are often used as tools for storing value and can be exploited for money laundering or transfers of assets beyond control.
Analysts believe that the new regulation may affect the liquidity of the gold market in the short term, but in the long term it will help improve transparency, especially in the context of gold prices becoming a hot topic in the world's second largest economy.
