On November 28, the People’s Bank of China (PBOC), the National Financial Regulatory Administration, and the China Securities Regulatory Commission (CSRC) jointly issued the *Measures for Customer Due Diligence and the Preservation of Customer Identity Information and Transaction Records by Financial Institutions* (the *Measures*). The new rules aim to implement the revised Anti-Money Laundering (AML) Law, adopting a "risk-based" approach to strengthen financial security while minimizing unnecessary procedural burdens for consumers.

**Risk-Based Due Diligence** Central to the *Measures* is the principle of tailoring due diligence to the level of risk. Financial institutions must assess clients’ profiles and transaction patterns, avoiding excessive scrutiny for low-risk scenarios. For instance, routine pension or social security account transactions—where income sources are transparent and fund flows predictable—will face simplified checks, such as basic identity verification. Conversely, accounts exhibiting sudden high-volume transfers across regions or frequent ATM withdrawals may trigger enhanced due diligence to investigate potential money laundering.

**Balancing Security and Convenience** The *Measures* seek equilibrium between AML safeguards and service efficiency. While consumers prioritize seamless transactions, lax oversight—especially amid rising telecom fraud and online gambling—could compromise financial safety. Authorities acknowledge complaints about banks’ inadequate due diligence leading to client losses, underscoring the need for calibrated measures. The *Measures* institutionalize this balance, requiring institutions to align scrutiny with risk levels without unduly disrupting legitimate services.

**Privacy and Compliance** Public concerns over privacy intrusions during due diligence are addressed by framing such practices as essential for combating financial crime. The *Measures* and AML Law mandate confidentiality for client data, with legal repercussions for breaches. Financial institutions and clients operate under contractual obligations, where cooperation with AML protocols is mutual. Globally, such measures align with international AML standards, reinforcing their necessity for public interest protection.