Rule-based but risk-oriented approach for combating money laundering in Chinese financial sectors

Purpose - This paper attempts to examine the practical condition of implementing risk-based approach (RBA) in Chinese financial sectors. Design/methodology/approach - This paper compares the differences between rule-based approach and risk-based approach (RBA), and provides different options to financial institutions considering their own circumstances. Findings - This paper finds that capacity constraint is an issue for directly transplanting the RBA performed by developed countries to Chinese financial institutions. Originality/value - This paper creatively proposes a rule-based but risk-oriented AML approach or partial RBA that fits Chinese financial institutions' reality underpinned by Chinese culture, and correspondingly, different assessment methods are presented as well.