[Keywords:] underground money houses; Broken window theory; Unblocking management; launder money
First of all, the questions raised
In August 2007, the Shenzhen Branch of the State Administration of Foreign Exchange and the local public security bureau jointly acted and successfully destroyed a large "underground money house". From 2006 to now, the transaction amount of this underground money house has reached 4.3 billion yuan, and there are many "well-known large state-owned enterprises in China" as the transaction subjects. Almost at the same time, Shanghai's largest "underground money house case" involving 5.3 billion yuan was pronounced in the first instance, and the defendant involved was convicted of illegal business operation or deported. The "underground money house case" caused a sensation, which triggered numerous debates on how to crack down on and manage the "underground money house".
The 2005 China Anti-Money Laundering Report issued by the People's Bank of China pointed out that China's money laundering activities have strong local characteristics, among which "underground money houses" are the most typical. "Underground money houses" help criminals to transfer funds out of the country by engaging in various illegal activities such as money laundering and illegal trading of foreign exchange, and are increasingly becoming one of the money laundering channels for various criminal activities such as corruption, tax evasion, smuggling and smuggling. In terms of the total amount, according to the disclosure of domestic media and the preliminary estimation of relevant departments, the annual remittance and transfer of funds through "underground banks" is not less than 200 billion yuan, which is roughly equivalent to about 2% of China's total economic output. Among the 200 billion yuan of underground funds, 70 billion yuan comes from money laundering of smuggling income, 30 billion yuan from corruption income, and10 billion yuan comes from illegal profit transfer of foreign-funded enterprises. Of course, these are only statistics, and there will be more unrecorded capital flows. These illegal and criminal activities bring more than 400 million yuan of profit space to "underground money houses" every year.
Why did "underground money houses" breed and develop in China? Here, we put the analysis of this problem into a standard paradigm of social science, that is, the normative framework composed of social choice theory, game theory and mechanism design revealed by Mount-Raiter Triangle, that is, the soil environment (causes) that "underground money houses" produce and the social rules that restrict it, but the value rules of these choices must be realized through a perfect legal system (mechanism design) (regulatory results), especially the payment function. That is to say, when the "underground money house" has not disappeared because of the continuous crackdown by the relevant government departments, but its scale is getting bigger and bigger, we should investigate some reasonable factors of the social choice of "underground money house" and formulate corresponding legal systems to regulate the living soil of "underground money house". In Structure and Change in Economic History, North pointed out that "institution is a series of rules, law-abiding procedures and moral and ethical norms of behavior, aiming at restraining individual behavior that pursues the maximization of subject welfare or utility interests". In fact, the game result of our crackdown on "underground money houses" activities is precisely because of the lack and loopholes of the legal system, which makes the governance of "underground money houses" in trouble.
Second, the nature of underground banks
What is an "underground money house"? At present, there is no unified and accurate legal definition of this concept in China. "Underground money house" is actually not a clear legal concept. Literally, "underground" refers to illegal, non-public, and generally refers to activities without the permission of relevant government administrative departments; "Qianzhuang" refers to an institution engaged in related financial activities, so "underground Qianzhuang" is an institution engaged in financial activities illegally (or undisclosed). The national law that clearly defines illegal financial institutions is1Measures for Banning Illegal Financial Institutions and Illegal Financial Activities issued on July 3, 1998. Article 3 of the Measures stipulates: "Illegal financial institutions refer to those established without the approval of the national financial regulatory authorities, or those mainly engaged in the business of taking deposits, issuing loans, handling settlement, discounting bills, borrowing funds, trust and investment, financial leasing, and financing guarantee.
But for the "underground money house", the theoretical circle has the following expression:
1. "Underground money house" is the common name of organizations engaged in underground financial business. Independent of the current financial system, it mainly provides an informal financial trading platform for the non-state-owned economy (private economy).
2. "Underground money houses" refer to institutions and organizations that secretly engage in illegal financial activities, money laundering and other illegal and criminal activities for the purpose of making profits without the examination and approval of the relevant competent departments of the state, and disrupt the order of national financial management.
3. The reason why the "underground money house" is an "underground money house" is actually because it has the unique business nature of banks, simple internal structure, clear division of labor and clear responsibilities, can realize the turnover of a large amount of funds, and has formed an organized institution with a certain scale engaged in cross-regional or even cross-border illegal transactions of RMB and foreign exchange.
4. "Underground money house" is a special illegal financial institution, which is outside the financial supervision system, and uses or partially uses the fund settlement network of financial institutions to engage in illegal financial industries such as illegal trading of foreign exchange, transnational (border) fund transfer, fund deposit and lending.
Although there are different expressions about "underground money houses" in theoretical circles, their views on their nature are basically the same, and they all think that they are illegal financial institutions or illegal economic organizations.
The author believes that it is understandable to define "underground money houses" as illegal financial institutions or illegal economic organizations, because they are for profit, have not been examined, approved and registered by the competent government departments, are outside the legal control and government management, and secretly engage in illegal financial activities, disrupting the national financial order. However, due to the complexity and huge number of "underground banks" in China, they need to be treated differently. Serious illegal and criminal acts such as arbitrage and money laundering must be severely cracked down; For some small-scale lending behaviors of the people, it is necessary to guide them through legislation, so that they can surface and embark on the right path.
Thirdly, analyze the causes of underground money houses from the legal point of view.
China's "underground money houses" first appeared in the Song Dynasty and were called "money houses" or "silver shops". Banks with real banking functions appeared in Qianlong and Jiaqing years of Qing Dynasty. During Daoguang period of Qing Dynasty, due to two Opium Wars, a large amount of silver flowed out of China, which contributed to the transformation from private banks to commercial banks. After the founding of New China, private banks gradually faded out of people's lives due to the implementation of the planned economic system, strict control of goods and resources, and lack of room for development of private capital. After the reform and opening up, this traditional non-governmental financial institution appeared in rural areas and urban-rural fringe areas (especially in Jiangsu and Zhejiang provinces) and existed as a manifestation of underground economy. However, at this time, underground banks have basically deviated from the benign role of banks in history (shouldering the hedging and regulating role of private capital exchanges), skillfully using the shortcomings of system reform and legal loopholes to serve the capital needs generated in the process of system transition by modern means, engaging in illegal absorption of public deposits, loans, high-interest loans, illegal pawn, private equity funds, and illegal trading of foreign exchange. Engaging in illegal financial business such as money laundering outside the trading places specified by the state, which seriously impacts the normal financial market order, affects the effectiveness of financial policies and the accuracy of balance of payments statistics, reduces state taxes, and causes the loss of foreign exchange; At the same time, it is easy to become a channel for serious crimes such as corruption, smuggling, drug trafficking, terrorist organizations and cross-border money laundering, which will impact the normal legal system and undermine fair social order.
Hegel once said that "what exists is reasonable", which means that existence must have a reason; But what exists is not necessarily legal. Laws have legislative reasons, but the reasons that existed when they were enacted may no longer exist now. For a long time, there has always been a paradox with China characteristics between the rationality and legality of "underground money houses", because the existence of "underground money houses" is illegal, but "underground money houses" have their internal driving forces, and their causes are caused by many factors. The following is only from the legal point of view:
(1) From the perspective of criminal psychology. The broken window mentality affects the "underground money house". Broken window theory was put forward by Wilson, a famous American political scientist, and Karin, a crime prevention scientist. It has two versions: the economic version tells the specious chain process of GDP growth caused by broken windows: broken windows can provide more jobs for window mending craftsmen, glass shops can increase sales, glass factory enterprise groups face bigger market cakes, and the improvement of the purchasing power of glass factory workers will transfer the economic growth momentum brought by broken windows to other industries. Psychological version refers to the inducement of individual criminal impulse by a broken window, because if someone breaks the window glass of a building and the window cannot be repaired in time, then the individual in this environment may be connived by some hints to break more window glass. Over time, these broken windows give people a sense of disorder, and as a result, crimes will breed and prosper in this insensitive atmosphere of the public. The broken window mentality of underground money houses is a concrete manifestation of the broken window mentality of psychological version. The existence of a large number of underground banks and huge profit margins, as well as the demonstration effect that the illegal cost is much lower than the illegal income, make more underground banks enter this underground financial market continuously, resulting in the "broken window effect".
(2) From the perspective of economic demand. At present, China's foreign exchange management system follows the principle of coexistence of authenticity and legality, which makes some normal foreign exchange needs unable to be met from formal channels. The imbalance and multi-level of economic development and system construction have caused a certain degree of dislocation between the liquidity demand of social funds and the supply of legal financial organizations. Therefore, the existence of underground money houses with the basic motivation of maximizing interests and the characteristics of informality and concealment of business behavior will have certain inevitability. From the supply point of view, because China is still a country with foreign exchange control, although China's foreign exchange management policy is gradually relaxed and RMB is freely convertible under current account, foreign exchange management is still implemented for capital account, and the foreign exchange demand of individuals, small and medium-sized enterprises and individual industrial and commercial households is still limited; At the same time, a managed floating exchange rate system is implemented instead of a complete floating exchange rate, thus leaving room for arbitrage in the illegal foreign exchange trading market. From the demand point of view, with the expansion of foreign economic exchanges, people's demand for foreign exchange is increasing. However, due to some drawbacks and loopholes in the current foreign exchange management system and operation system, it is objectively impossible to meet the needs of some individuals and enterprises. When formal channels can't meet their needs, they can only achieve it through "underground money houses".
(3) Analyze from the perspective of the security of transferring stolen money or money laundering. Our country is in the period of economic transformation, and all kinds of corruption and economic crimes are more prominent. Corrupt elements or economic criminals are worried that it is not safe to store illegal gains in China, and try their best to transfer them abroad in order to achieve the purpose of transferring assets to avoid legal investigation. "Underground money houses" have become one of the important channels.
The illegal foreign exchange business of underground banks is mostly cross-border transactions. For an exchange transaction, the local and foreign currency funds are delivered separately at home and abroad, which determines that the evidence of cross-border transactions must be at home and abroad. Overseas evidence collection involves international judicial assistance, which is time-consuming and laborious, and the procedures are cumbersome. At the same time, the imperfection of international judicial assistance mechanism makes it difficult to obtain evidence for cross-border transactions, which will inevitably lead to the fracture of the evidence chain of related cases and affect the case characterization and fact finding. At the same time, due to the particularity of the operation mode of "underground money houses", in order to escape the blow, most of its transaction records adopt the simplest bookkeeping method. Whether the transaction is completed or not uses some special symbols, even currency symbols and literal currency, and rarely leaves written evidence. At the same time, with the development of science and technology, criminals use increasingly advanced technical means, and most of them use telephone, internet and other means to communicate and send remittance instructions, which makes it difficult to collect powerful physical evidence and documentary evidence in the process of investigation and evidence collection. In recent years, some illegal transactions of "underground money houses" have developed in a more subtle direction, such as reducing bank transfers, conducting cash transactions, opening bank accounts with false or borrowed identity documents of unrelated people, and frequent replacement, which further increases the difficulty of cracking down. Most of the transaction subjects who transfer cross-border funds through "underground money houses" engage in illegal and criminal acts such as smuggling, corruption, tax evasion and money laundering, and generally cannot actively cooperate with the investigation and evidence collection, which also makes it difficult to obtain evidence.
(D) From the perspective of China's financial legislation. China's existing financial laws and regulations are lacking or not operable, which makes it difficult for judicial organs to characterize and crack down on many "underground banks". The illegal financial activities of "underground money houses" are mainly illegal absorption of public deposits, fund-raising fraud, money laundering, illegal trading of foreign exchange, borrowing and lending at high interest rates. Although 1997 Criminal Law and subsequent judicial interpretations have detailed provisions on illegal absorption of public deposits and fund-raising fraud, there are many legal application problems in money laundering and illegal trading of foreign exchange. First of all: the law is difficult to operate. In China's current criminal law, the key to the crime of money laundering in underground banks is to prove that the source of funds belongs to the seven upstream crimes (smuggling, drug trafficking, underworld, terrorist activities, disrupting financial management order, financial fraud, corruption and bribery) stipulated in the crime of money laundering, which is beneficial for judicial organs to verify the facts of money laundering in underground banks and investigate their legal responsibilities. But at present, many criminals will embezzle, misappropriate public funds, export tax fraud, and illegally absorb public deposits. Secondly, there are some difficulties in defining the crime of illegal business operation. Because the crime of illegal operation usually refers to the illegal operation of legal companies, and in the case of "underground money houses", some are not legal companies, and some even have no companies. Moreover, the criminal law stipulates that the crime of illegal business operation has two sentencing grades: if the circumstances are serious, it shall be sentenced to fixed-term imprisonment of not more than five years or criminal detention, and a fine of not less than one time but not more than five times the illegal income; If the circumstances are especially serious, he shall be sentenced to fixed-term imprisonment of not less than five years, and shall also be fined not less than one time but not more than five times his illegal income or his property shall be confiscated. There are two problems: what are "serious circumstances" and "particularly serious circumstances", which have not been clearly defined. This gives the judicial personnel too much discretion, which leads to the arbitrariness of the judgment results. If the judiciary defines the criminal acts of the operators of "underground money houses" as "serious circumstances" rather than "particularly serious", then the maximum sentence can only be five years' imprisonment. For a criminal act that is so harmful to society and gains so huge illegal benefits, the crime cost of five years' imprisonment is undoubtedly too light, which violates the principle of adapting crime to punishment and is suspected of felony. Third, the prosecution standard of the crime of illegally buying and selling foreign exchange is high, and the evidence requirements are strict. Both parties are required to have an agreement on the time, place, price comparison and transaction method of illegally buying and selling foreign exchange, and provide relevant evidence such as transaction records of both parties. The transactions of underground banks are mainly completed by means of communication tools such as telephone and fax, and few written records are left. Unless a large amount of cash is seized on the spot, the amount of illegal transactions cannot be determined. Therefore, some cases of "underground money houses" investigated and dealt with by the public security organs either failed to meet the prosecution standards, or the court finally gave a light sentence for a felony on the grounds that the amount of conviction and sentencing was far less than the actual amount involved by the defendant, so that criminals could not get the punishment they deserved.
Fourthly, the legal countermeasures to control "underground money houses"
In order to effectively manage "underground banks", we must study it as a systematic project. From the macro guiding ideology to the micro institutional arrangement, we should seriously consider and weigh, realize their respective optimal design and internal fit, and treat both the symptoms and root causes.
(1) In terms of guiding ideology, the principle of "combining dredging and blocking, striking and preventing simultaneously" is adopted. As an illegal financial institution in the economic field, "underground money houses" are difficult to eradicate in a short time. Objectively speaking, not all "underground banks" play a negative role. From the perspective of law and economics, the expansion of the business scale of "underground money houses" will inevitably divide financial resources, form an external circulation of monetary funds, weaken the function of the formal financial system, and then affect investment and savings, economic growth rate and economic efficiency. , leading to the failure of monetary policy and foreign exchange management policy, and even becoming a channel for the transfer of funds for serious criminal crimes such as money laundering, posing a threat to national economic and financial security and other non-traditional security. However, from a local or microscopic point of view, "underground banks" have promoted the development of regional or individual economies to a certain extent, reconciled the contradiction between the demand for some reasonable financial products and the defects of the current financial and foreign exchange management systems, and made up for the shortcomings of the formal financial system. Therefore, the governance of "underground banks" should change the way of thinking in time, objectively distinguish and rationally analyze the nature and causes of different businesses of "underground banks", change the way of sealing, blocking and beating in the past, and adopt the policy of "combining unblocking with preventing simultaneously" to promote the differentiation of "underground banks" and then divide and rule them. In other words, some private banks can develop into legal financial institutions in the future, which is good for the country and the people. Therefore, we should speed up the financial reform, establish a financial system and financial supervision system that are unified with the requirements of market economy as soon as possible, standardize the flow of private funds, and make some "underground banks" that contribute to the development of local private economy, serve the private financial system and operate relatively normally, and make them go out of the "underground" through legislation, be incorporated into the national financial system and implement effective monitoring to meet the reasonable and legal capital needs of economic entities at different levels. On the one hand, efforts should be made to make "underground money houses" lose the soil for survival and eventually withdraw from the market; On the other hand, we should formulate and improve relevant laws and regulations to crack down on "underground banks" as soon as possible, so as to provide legal and institutional guarantee for the governance of "underground banks".
(two) in terms of institutional arrangements, we should treat them differently. On the one hand, it is necessary to reform the financial system, allow the legalization of private "underground banks" that meet the statutory conditions, and strengthen their restraint and supervision. Many businesses (excluding money laundering) of "underground money houses" with a history of 200-300 years are generally private contract behaviors. This kind of "underground money house" should be incorporated into the formal financial institution system in an appropriate form according to their different business nature, and its capital operation direction and transaction content should be restricted and supervised. For example, it is allowed to engage in small-scale usury business through legislation; Let private financial institutions surface and better support the development of private economy and regional economy in a legal capacity. Those "underground money houses" mainly engaged in money laundering and illegal foreign exchange transactions will be cracked down and resolutely banned. In this way, some "underground banks" will take the initiative to surface, demanding to become legal private banks and conduct business under the supervision of financial supervision departments, while others will withdraw from the market because they have no living space.
On the other hand, financial crimes such as money laundering and illegal trading of foreign exchange should be severely cracked down. First of all, we should improve the legislative technology of criminal law. Clarify the legal standards of "serious circumstances" and "especially serious circumstances" in the crime of illegal business operation as far as possible, so as to standardize the applicable standards of punishment, meet the needs of standardizing underground banks, and conform to the principles of criminal law; Second, it is necessary to solve the problem of difficulty in obtaining evidence against "underground money houses" by means of evidence presumption. In view of the characteristics of the crime of "underground money houses", it is suggested that the judicial organs make relevant judicial interpretations and stipulate that the evidence identification of illegal foreign exchange trading and money laundering crimes can also adopt the method of evidence presumption. For example, it is stipulated that when investigating cases of illegal trading in foreign exchange, the transaction amount can be estimated based on the evidence of unilateral transactions seized. If the actor fails to prove or disprove, it shall be regarded as the object of illegal business. Third, we should improve the system of recovery and confiscation of criminal proceeds and their proceeds. Break through the legal dilemma that individuals flee abroad and state organs cannot recover or confiscate their personal property at home. We can establish criminal trial by default and administrative punishment by default under special circumstances through legislation, or consider confiscating criminals' property through default trial in civil proceedings in view of the low standard of judicial proof. Therefore, state organs have legitimacy in dealing with illegal criminals who have fled abroad.
It is necessary to take compulsory measures based on "system docking and special crackdown" to curb "underground money houses" engaging in illegal and criminal activities such as money laundering. Formulate the Anti-Money Laundering Law and related legal systems, and establish a specialized agency with reconnaissance power under its guidance to crack down on money laundering and other criminal activities of "underground banks". Special strikes can not only overcome the obstruction and interference of some local protectionism, but also form a huge momentum and long-term deterrent in the local area to curb the spread of crime. However, due to the tight organization, professional division of labor and simple procedures of money laundering activities in underground banks, we should establish early warning mechanisms, preventive mechanisms and special cooperation mechanisms to improve the professional reconnaissance level of economic investigators, build an all-round, wide-channel and multi-level early warning mechanism of intelligence information based on the anti-money laundering network of financial institutions, broaden the sources of intelligence information, strengthen the grassroots work of economic investigation, and specialize the information found in the work. In addition, for cases involving different countries, regions and departments in China, organs at all levels should strengthen organizational cooperation among themselves and internationally; For the illegal and criminal cases of "underground money houses" seized, those that meet the prosecution standards should be put on file for investigation in time, and communicate with the procuratorate and the court in time to correctly handle the relationship between pursuing and cracking down on money laundering crimes.
In addition, it is necessary to appropriately relax the mandatory foreign exchange control mechanism to meet the normal and legitimate foreign exchange needs of enterprises and individuals, guide enterprises to exchange foreign exchange through legal channels, and reduce the demand for "underground banks." For example, reform the existing foreign exchange settlement and sale system as soon as possible, change the compulsory foreign exchange settlement and sale to proportional foreign exchange settlement and sale, and continue to greatly relax the restrictions on residents' foreign exchange exit; Vigorously promote trade facilitation, simplify trade verification procedures, increase the foreign exchange account limit of current account of enterprises, expand the autonomy of foreign exchange receipts and payments of enterprises, and adopt flexible and diverse management measures to try to meet the reasonable foreign exchange receipts and payments of enterprises; Improve the current foreign exchange management policies and regulations to plug the loopholes in illegal foreign exchange transactions; Realize the computer networking of customs, foreign exchange management, designated foreign exchange banks, taxation and other departments as soon as possible to improve the effectiveness of trade foreign exchange supervision; Study the foreign exchange management regulations of service trade item by item, and vigorously standardize and rectify the foreign exchange receipts and payments activities of service trade; We will improve the management of overseas investment by focusing on the examination of foreign exchange authenticity and compliance, strengthen the supervision of cross-border capital flows and foreign exchange receipts and payments in the capital market, and further improve the foreign exchange management needs of capital projects. These measures will, to a certain extent, reduce the occurrence of illegal and criminal activities such as illegal trading of foreign exchange and standardize the living soil of underground banks.
References:
[1] Chinese businessmen. 1 100 million dirty money leaves the country through underground banks [J]. Decision exploration, 2005, (3).
[2] Zhang Hongwei. On the causes and countermeasures of underground banks in China [J]. Public Security Research, 2004, (6).
[3] Zhao Youming, Wang Xin. On underground banks [J]. Journal of Hunan Economic Management Cadre College, 2006, (3).
[4] Wu Hanming. Analysis of legal problems in cracking down on underground banks [J]. Shanghai Finance, 2006, (1).