Friday, October 25, 2013


An appeals court in Shandong has dismissed the appeal of convicted Chinese leader, Bo Xilai, and affirmed his conviction and life sentence. He reportedly has no more appeals as a matter of right, but may file further proceedings, through such actions rarely, if ever, succeed in overturning a criminal conviction in China.

The fact that his trial, and appeal, was, in a limited and controlled way, made public by Chinese officials, indicates that his conviction and punishment were intended to act as a deterrent to Chinese PEPs, many of whom are engaged in rampant corruption, and whose actions ha ve brought the Chinese Communist Party into disrepute.

What compliance officers need to take away from the Bo Xilai case is that official corruption within China remains out of control, and the risk that any Chinese PEP has accumulated illicit wealth, through bribes and kickbacks, is high. Your specific threats:

(1) That a wealthy Chinese businessman, seeking to open an account at your Western bank, is either a disguised PEP, or a front man, placing illicit funds into your financial institution.

(2) That your bank client, who is engaging in business in China, is directly, or indirectly, paying off a Chinese PEP,  through his accounts with you.

Corruption among Chinese PEPs continues to be a clear and present danger to Western banks.

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