The Supreme People's Procuratorate (SPP) and the State Administration of Foreign Exchange have released typical cases on reverse transference between administrative law enforcement and criminal justice in the field of foreign exchange.
The move focuses on key and complex issues in the fact identification and legal application concerning criminal justice and administrative law enforcement in the forex sector, and aims to further clarify rules for handling relevant cases, crack down on violations of the law in the forex field, and effectively safeguard the sound order of the forex market.
Reverse transference between administrative law enforcement and criminal justice applies to cases where procuratorial organs decide not to prosecute but deem it necessary to impose administrative penalties on the parties involved. In such instances, timely procuratorial opinions need to be presented, while the cases involved need to be transferred to the relevant administrative authorities. Procuratorial organs will closely monitor and supervise the handling of the cases.
In cases involving large-scale illegal trading in forex that constitute a crime of unlawful business operation, criminal liability shall be pursued in accordance with the law. For those not reaching the threshold for prosecution, administrative liability shall be pursued in accordance with the law.
In the six newly-released cases, the procuratorial organs, in collaboration with the forex regulatory authorities, have further aligned the standard for law enforcement and administration of justice and provided demonstration on the procedural linkage, in order to prevent regulatory loopholes in the forex sector, ensuring both criminal liability and other penalties where applicable. This initiative has formed a governance loop combining criminal and administrative liabilities, achieving positive results.
Individuals who merely lend their forex accounts without directly engaging in illegal business operation cannot be held criminal liable due to a lack of subjective intent. In three of the newly released cases involving illegal business operation, the procuratorial organs, upon review, concluded that whether the illegal forex trading is profitable is not a necessary condition for the imposition of administrative penalties. Disguised forex trading, profitable or not, and illegal forex trading referrals, should be subject to administrative penalties.
These typical cases also serve as an alert to the public, urging them not to seek short-term gains by assisting in illegal forex trading activities using funds and client resources gathered from normal cross-border trade and economic activities. Individuals should conduct forex transactions through lawful channels like banks and consciously resist illegal forex trading activities.
The Administrative Procuratorial Department of the SPP stated that procuratorial organs will thoroughly implement the guiding principles of the third plenary session of the 20th Communist Party of China Central Committee concerning deepening reform of financial system and improving the system of reverse transference between administrative law enforcement and criminal justice.
Measures will be taken throughout the process to ensure the smooth implementation of administrative penalties by the forex regulatory authorities, and to improve the system of reverse transference between administrative law enforcement and criminal justice in the forex sector, in order to effectively combat violations and criminal activities related to forex, and firmly guard against the occurrence of systemic financial risks.
