U.S. Government Intensifies Scrutiny of Large Deposit Bank Accounts Held by Chinese Passport Holders

What Is the Official Basis for This Scrutiny?

• Chinese Money Laundering Networks are primarily composed of Chinese passport holders, international students, and overseas Chinese nationals, who either participate voluntarily or are unwittingly exploited as money mules. Over 20,000 Suspicious Activity Reports (SARs) have referenced accounts held by Chinese students, involving a total of $13.8 billion in funds.
• Between 2020 and 2024, the total value of suspicious transactions linked to CMLNs exceeded $312 billion.
• The U.S. Department of Justice disclosed a case in the Los Angeles area where over $50 million in drug proceeds was laundered through Chinese underground banking channels.
• China’s strict foreign exchange controls (including the annual $50,000 quota) and the money laundering demands of drug cartels form a complementary relationship.

How Will Financial Institutions Respond?

• Suspicious Activity Reports (SARs): All suspicious transactions involving at least $5,000 must be filed, with the keyword "CMLN-2025-A003" included.
• Currency Transaction Reports (CTRs): All cash transactions exceeding $10,000 must be submitted to the authorities.
• Key Targets for Enhanced Scrutiny:
  • Account holders with identities such as students, housewives, or retirees who frequently deposit/withdraw large sums of cash or receive funds from unknown sources;
  • Clients who opened accounts using Chinese passports or visas, where their source of funds is grossly inconsistent with their declared occupation or income level;
  • Accounts that frequently receive remittances labeled as "tuition fees" or "living expenses," but the fund amounts far exceed reasonable limits;
  • Clients who use large amounts of cash to purchase cashier’s checks or fund real estate transactions;
  • Accounts that frequently receive and transfer multiple small-value sums (a practice known as smurfing), with funds subsequently dispersed rapidly;
  • Small businesses engaged in electronics or luxury goods that conduct payment/receipt activities on a scale grossly disproportionate to their size;
  • Funds flowing to or from high-risk jurisdictions, such as Mexico, China, Hong Kong, or the United Arab Emirates.

What Precautions Should We Take?

1. Refrain from participating in any suspicious fund transfers or using underground banking channels; never accept remittances or transfer requests from strangers. Even for transfer requests from acquaintances, make a decision only after fully clarifying the background and purpose.
2. Properly retain written evidence of fund sources (such as remittance vouchers, contracts, payroll stubs, and relevant chat records with remitters);
3. Proactively cooperate with due diligence inquiries conducted by banks or financial institutions to avoid unnecessary troubles caused by insufficient supporting documentation.