Zhongtian Vision: From October 2020 in Zhejiang Province, the new policy of large cash management fo

1. The significance of the pilot

     To lay the foundation for the establishment of a long-term mechanism for large-amount cash management, that is to say, through the three provinces and cities pilots, sum up and accumulate experience, and then may be promoted to the whole country.

According to the analysis of relevant bankers, this large-value cash management is only limited to the management of cash deposits and withdrawals. Bank transfers, including public-to-public, public-to-private, and private-to-private, are still managed by the "Financial Institutions Large Transaction and Suspicious Transaction Report" Measures" (People’s Bank of China Order No. 3, 2016) regulates.

2. Time and place

     The pilot project lasts for 2 years, first in Hebei Province, and then extended to Zhejiang Province and Shenzhen.

     Starting from July 2020, Hebei Province has started pilot projects.

    Starting in October 2020, Zhejiang Province and Shenzhen City will start pilot projects.

     Why choose these three provinces and cities? The "Draft for Consultation on Large Cash Management" released last year said:

     Banking financial institutions in Hebei Province have a good management foundation for large-value cash business. Zhejiang Province and Shenzhen are both key areas for cash investment in the country. Some industries in Zhejiang Province have outstanding large-value cash use, and personal accounts have outstanding large-value cash use. Shenzhen and Hong Kong Cross-border flows of RMB banknotes are common.

3. Starting point

     According to the investigation and analysis of the pilot bank, the starting point for the management amount of public accounts is 500,000 yuan, and the starting point for the management amount of private accounts is 100,000 yuan in Hebei Province, 300,000 yuan in Zhejiang Province, and 200,000 yuan in Shenzhen.

     The management business situation is mainly counter business with cash physical transfer, including self-service deposit and withdrawal through large-value high-speed deposit and withdrawal equipment, and must avoid supervision and "pseudo large-value cash transactions" for splitting, hidden cash posting, etc. Circumstances formulate preventive measures, not only monitoring a single transaction that exceeds the threshold amount, but also monitoring multiple transactions that cumulatively exceed the threshold amount.

     The three provinces and cities have cash deposits and withdrawals of more than 500,000 yuan in public accounts (including individual industrial and commercial accounts), more than 100,000 yuan in private accounts in Hebei Province, more than 300,000 yuan in private accounts in Zhejiang, and 200,000 yuan in private accounts in Shenzhen Above RMB, it belongs to the category of large cash management.

     From the analysis of the content of the document, the starting point of the amount includes both a single transaction and multiple accumulations. The accumulation period should be a natural day.

4. Make an appointment for large cash withdrawal

     All commercial banks will establish appointment rules, implement an appointment system for large cash withdrawals, and report relevant information to the central branches of the People's Bank of China.

5. Register for large deposits

     Customers withdrawing and depositing cash above the threshold amount shall be registered when handling the business. Commercial banks shall also report relevant information to the central branches of the People's Bank of China.

6. The cash can be traceable

     The pilot bank takes overall consideration of the PBC’s serial number data concentration requirements and large-amount cash monitoring requirements, and guides banking financial institutions to realize the association and traceability of information of deposit and withdrawal services above the starting point with the physical cash serial number.

    To put it bluntly, for cash deposits and withdrawals above the starting point, the serial number of each RMB physical item must be associated with the deposit and withdrawal business information, such as who took it, when, where, who deposited, and when Saved, where is it saved.

7. Risk prevention

     For situations where customers come from high-risk industries, the transaction amount is extremely large, the transaction frequency or amount does not match the customer's identity and daily transaction characteristics, etc., strictly review the authenticity and standardization of the information, and find or have reasonable grounds to suspect that the customer is suspected of crimes such as money laundering In case of activities, a suspicious transaction report shall be submitted, and risks shall be marked, followed up and recorded for future reference.

     For the suspicious transaction reports mentioned here, please refer to the "Measures for the Administration of Large-Value Transaction and Suspicious Transaction Reports of Financial Institutions."

8. Cash analysis report system

     Strengthen its own large-value cash analysis level, analyze the large-value cash business information submitted by banking financial institutions according to industry, use, and amount, grasp the direction of large-value cash flow, and predict the risk of large-value cash business. On the premise of ensuring the safety of personal information and strictly regulating the use of information, communicate and share information with relevant departments.

     The exchange and sharing of information with relevant departments is also quite powerful. Some regions have seen tripartite cooperation between tax, police and bank, monitoring taxpayers’ bank accounts and submitting them to tax authorities for inspection.

9. Management measures for specific industries and specific regions

1. Hebei Province, focusing on the real estate industry, especially the pre-sale funds for commercial housing in Xingtai City.

2. Zhejiang Province, focusing on the wholesale and retail, real estate sales, construction, and automobile sales industries, focusing on the authenticity of cash withdrawal and subsequent use.

3. Shenzhen City, focusing on the use of personal accounts for the management and control of operating income and expenditures, subdividing the sources and uses of operating income and expenditures of personal accounts, and monitoring overseas RMB cash business.

10. Personal cash income report

     Choose suitable cities and regions for the pilot area, explore the leadership of some state agencies, state-owned enterprises and public institutions, and encourage individuals to report the nature of transactions and transaction amounts of cash income above a certain amount.

     At present, banks monitor large-value payments and suspicious transactions, fulfill their reporting obligations for large-value transactions and suspicious transactions, and submit large-value and suspicious transaction reports to the China Anti-Money Laundering Monitoring and Analysis Center.

The following three situations will be subject to key supervision!

(1) A single transfer payment of more than 1 million yuan between legal persons, other organizations and individual industrial and commercial households (hereinafter collectively referred to as units);

(2) Single cash receipts and payments with an amount of more than 200,000 yuan, including cash deposits, cash withdrawals, cash remittances, cash drafts, and cashier's order settlements;

(3) Transfers of more than 200,000 yuan between personal bank settlement accounts and between personal bank settlement accounts and corporate bank settlement accounts.

So what is a large payment?

     According to the "Measures for the Administration of Large-Value and Suspicious Transaction Reports of Financial Institutions" that came into effect on July 1, 2017 (that is, the aforementioned (People's Bank of China Order No. 3, 2016)), large-value transactions are:

(1) Cash deposit, cash withdrawal, cash foreign exchange settlement and sale, cash exchange for single or cumulative transactions of more than 50,000 yuan (including 50,000 yuan) and foreign currency equivalent of more than 10,000 US dollars (including 10,000 US dollars) on the day , Cash remittance, cash bill settlement, and other forms of cash receipts and payments.

(2) The transfer of a single or cumulative transaction of more than RMB 2 million (including 2 million) and a foreign currency equivalent of more than USD 200,000 (including USD 200,000) on the day when the bank account of a non-natural person customer and other bank accounts occur.

(3) On the day that the bank account of a natural person customer and other bank accounts occur, a single or cumulative transaction of more than RMB 500,000 (including 500,000), and a foreign currency equivalent of more than USD 100,000 (including USD 100,000) is transferred within the country.

(4) Cross-border transfers of single or cumulative transactions of more than 200,000 yuan (including 200,000 yuan) and foreign currency equivalent of more than US$10,000 (including US$10,000) on the day when the bank account of a natural person customer and other bank accounts occur .

case study:

     Recently, the Wuxi Taxation Bureau issued a notice that a company failed to declare tax payment for collecting money with a personal bank card, which constituted tax evasion, and was charged more than 8 million in taxes and fined! The undeclared tax on personal account collection constitutes more than 5 million tax evasion and a fine of nearly 3 million!

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What happened roughly:

     From 2017 to 2018, the company obtained out-of-book sales of electric vehicles and accessories, and did not declare tax.

   In 2017, 1,219,3078.7 yuan of sales were collected through personal accounts, of which 1,149,5378.7 yuan was not accounted for and tax payment was not declared.

In 2018, 27,883,309.65 yuan of sales were collected through personal accounts, of which 27,018,459.65 yuan was not accounted for and tax was not declared.

   After the deduction, the value-added tax was recovered in 2017 of 1,670,268.7 yuan, and in 2018, 383,9500.25 yuan. The total amount of corporate income tax collected in 2017 and 2018 was 439,662.71 yuan.

     Because the company concealed waste income, used false special value-added tax invoices to under-list income and multiple expenditures in the accounting books, it constituted tax evasion, and it planned to impose a 50% fine for the collection of value-added tax and corporate income tax, totaling 2,974715.87 yuan.

    It can be calculated that the company failed to declare tax due to the collection of personal cards, and was recovered tax and fined more than 8 million! This is a profound lesson.