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Compliance and Money Laundering Control by Financial Institutions in China
Self Control, Administrative Control, and Penal Control

Jing Lin (China)

Ph.D. Project

Topic and Goal

Since a series of corporate scandals such as the cases of Enron, Siemens and WorldCom occurred, the academic field has been mired in debates about how to control economic crime. Strategies of compliance promotion and crime/deviance prevention have been widely studied, ranging from traditional formal control approaches such as instrument of penal control to informal approaches such as instruments of corporate governance (self control). This study seeks to delineate the current economic crime/deviant control mechanisms in China. Three popular control instruments with escalating severity - self control, administrative control, and penal control - will be studied. The aim of this study is to explore how these three instruments are regulated in China, their advantages and limitations, how they are linked to one another, the challenges they seek to confront, and the type of solutions that are required to a achieve a smooth functioning, comprehensive approach.

Research Design

Compliance of financial institutions and money laundering control in China will be studied as a case in point. Apart from a literature review and an introduction of research design (Part 1), this study analyzes three control approaches, i.e. self control (Part 2), administrative control (Part 3), penal control (Part 4), and then further studies their linkages (Part 5). Besides the theoretical framework based on John Braithwaite’s responsive regulation and Julia Black’s risk-based responsive regulation, this study samples empirical material from official documents (annual reports of the People’s Bank of China, the Supreme People’s Procuratorate and the Supreme People’s Court), relevant news report and interviews with professional staff.

Hypotheses

Given that each of the three instruments have both advantages and limitations, a networking approach (comprehensive approach) is essential to achieve sound compliance among financial institutions. Self control is the key element in the networking approach, considering that self regulation is prevention oriented with internal control systems and internal “police” (compliance officers) that facilitate the earlier discovery of misconduct. A key element to achieve efficient enforcement of these instruments is creative linkage among them. First, control instruments with different severity should be allowed to shift in response according to the regulatee’s behavior and the resulting risks. Second, incentive devices are not necessarily limited in informal control approaches, but should also be applied to formal control approaches, even to punitive control approaches. Likewise, punitive devices should be involved in informal control approaches.

Added value to the overall REMEP research program

This study is based on the assumption that the applicability of penal control (primarily punishment) to white collar crime control is seriously limited; it also assumes that an effective regulation presupposes the involvement of other control approaches, e.g., self control, and the proactive linkage of various approaches. Therefore, in line with the research program of the IMPRS REMEP, it addresses general concerns on the limits of penal control in the maintenance of social and economic order and suggests a comprehensive approach.

Research Interests and Goals

Juvenile Criminal Law, Economic Crime, Human Rights Law

Further information

  • Certificate of the Legal Profession Qualifications (awarded by the Chinese Ministry of Justice in 2006)
  • First class scholarship winner (awarded by CUPL three times in 2002, 2003, 2004)
  • DAAD scholarship
  • China Scholarship Council (CSC) scholarship

Publications

(selection)
  • Lin, Jing: An Approach of “Referism”: a Comparative Study on Diversion in Juvenile Justice between China and Germany. In: Peking University International and Comparative Law Review, 2010, Issue/Volume 11/8, p. 17 - 60.
  • Lin, Jing: Study on European Human Rights Law's Influence on the European Integration Process. In: Mi, Jian (ed(s).): The Role of the European Law in the European Integration (ouzhoufa zai ouzhou yitihua jincheng zhong de zuoyong). Beijing, Law Press (Falue), 2009, p. 52 - 75.

Lectures

  • 17.02.2010

    A Comparative Study on Money Laundering Control through Financial Institutions and their Staff in China, Germany and the USA: A Perspective of Institutional Governance
    REMEP Winter University 2010

    Location: Husseren-les-Châteaux, Alsace/France

Curriculum vitae

Since September 2009 PhD Candidate of the International Max Planck Research School on Retaliation, Mediation and Punishment (IMPRS REMEP) at the Max Planck Institute for Foreign and International Criminal Law in Freiburg i.Br., Germany
October 2007 - November 2008 Master of Laws (LL. M), Focus on International Criminal Law and Criminology
Thesis: Diversion in Juvenile Justice: A comparative study on the legal structure and practice in China and Germany
University of Freiburg
April 2007 -
July 2007 		Visiting Student Researcher, Focus on European Human Rights Law and European Economic Law
Paper: Study on European Human Rights Law's influence on the European integration process
University of Freiburg and CUPL (sponsored by the European Commission within the framework of the EU-China European Studies Centres Programme)
September 2005 - June 2009 Master of Laws (LL. M), Major in Comparative Law (focus on Human Rights Law, Criminal Law and Criminal Procedural Law)
Thesis: Comparative research on Chinese - German minors' crime rectification and rights protection
Chinese - German Institute for Legal Studies at CUPL (CDIR, CUPL) in Beijing, P.R. China
September 2001 - July 2005 Bachelor of Laws (LL. B), China University of Political Science and Law in Beijing, P.R. China (CUPL)