The People's Bank of China (PBOC) has announced Order No. 12 [2025], titled "Measures for Identifying Beneficial Owners of Financial Institution Clients," which was approved at the 18th executive meeting of the PBOC on December 12, 2025. The measures will take effect on January 20, 2026.
Signed by PBOC Governor Pan Gongsheng on December 19, 2025, the regulation aims to prevent money laundering and terrorist financing activities while implementing customer due diligence requirements for financial institutions.
Key provisions include:
1. Scope and Principles: - Applies to institutions required to perform customer due diligence under existing financial regulations - Mandates risk-based identification of beneficial owners for non-natural person clients - Establishes principles of reasonableness and reliability in verification processes
2. Identification Standards: - Defines beneficial owners as natural persons who ultimately own/control ≥25% equity/voting rights - Requires identification of controlling persons for entities with complex ownership structures - Exempts certain government entities and international organizations from identification
3. Verification Requirements: - Financial institutions must use reliable supporting documents/data to verify ownership structures - Specifies minimum information to be collected, including identity details and ownership relationships - Implements enhanced due diligence for high-risk scenarios
4. Compliance and Penalties: - Establishes feedback mechanisms for discrepancies in beneficial ownership information - Sets fines ranging from warnings to RMB 2 million for non-compliance - Provides for reduced penalties in cases of voluntary compliance improvements
5. Transitional Arrangements: - Gives financial institutions 6 months to verify high-risk existing clients - Allows 2 years for full compliance with the new standards - Permits delayed verification for dormant accounts until reactivation
The measures replace two previous PBOC notices (Yin Fa [2017] No. 235 and Yin Fa [2018] No. 164) and supersede any conflicting prior regulations regarding beneficial ownership identification.