decided in july 1989 to establish the financial action task force ( fatf ), in a bid to examine the cooperative results with respect to combating money laundering through banks and the financial system, to improve laws and rules in aml and measures, and to strengthen preventive aml measures through multi - lateral judiciary assistance. in february 1990, the fatf set out a set of forty recommendations on money laundering ( “ forty recommendations ” ). first, each country should criminalize money laundering of funds used in severe crimes. second, governments of all countries should strengthen financial supervision by urging financial institutions to develop and implement feasible internal aml control system and to fulfill the obligation of customer identification, record - keeping of customer information and transactions and detection and reporting of suspicious financial activities. third, governments should establish financial intelligence unit ( fiu ) responsible for monitoring unusual and suspicious transactions of funds, so as to achieve coordination and cooperation between appropriate ministries. fourth, countries should exchange intelligence on money laundering and conduct international cooperation in aml investigation, search and freezing of illegal funds and extradition of suspects. the forty recommendations by the fatf has become the most important guiding document in the current international aml sphere, promoting aml legislation in all countries and regions and development of the international aml system. after 9 / 11 terrorist attack, anti - terrorism is combined with aml. combating terrorist financing has become an important field of aml. aml and combating terrorist financing have become important issues of some international organizations and forums, occupying a significant niche in current international relation. after 9 / 11 terrorist attack, the us congress wasted no time in passing the usa patriot act, strengthening in an all - round way the rules for combating terrorist financing. the legislature of all countries and regions reacted to the movement quickly as well. besides some international conventions passed by the un with respect to combating terrorist financing, the fatf drafted specifically 8 more recommendations for combating terrorist financing in october 2001. the developed countries in europe and america have rendered aml and combating terrorist financing a focus of their foreign affairs, and have taken resolute measures to that effect. iii. the status quo of aml in china 1. aml legislation china ’ s criminal legislation with respect to aml almost synchronized with the international efforts. after the united nations convention against illicit traffic in narcotic drugs and psychotropic substances went into effect in 1988, china ’ s national people ’ s congress promulgated the decision on

considered in some important decisions. it was especially emphasized that stakeholders should be involved in the insolvency process. fourth, the stakeholders should have access to necessary information on managing the company. the oecd again revised the five principles in 2004. in this revision, the protection of stakeholders and whistle blowers is emphasized. it, to a larger extent, stresses the rights of employees and creditors. there are three main aspects. first, it clearly states to establish a mechanism that enhances the participation of employees. stakeholders, including individual employees and their representatives, shall be able to freely express their views to the board with respect to any illegal or immoral activities in the company. employees ’ views and their rights to express the views shall be respected and protected. it shall be ensured that information can flow safely and confidentially to the board. second, corporate governance shall ensure the enhanced participation of employees, so that the employees ’ special skills can be put to use in the company, benefiting the company directly or indirectly. the examples of employees ’ participation include increasing representatives of employees in the board, adopting the plan of employee stocks holding and establishing a profit sharing mechanism such as pension contribution. for instance, pension contributions can be pooled into an independent fund and the fund manager shall be independent from the company ’ s management in terms of business operation. third, it stresses the important role of creditors in corporate governance and external supervision. it also states that effective and efficient liquidation framework and credit rights enforcement mechanism are important supplement to effective corporate governance, ensuring effective protection for the rights of the shareholders. the importance of employees and creditors is further stressed in the new version. china wishes to learn from international experiences and practices in the process of building a socialist market economy with chinese characteristics. it can be said from the point of view of a socialist market economy, china should do better in terms of employees ’ status and their involvement in managing companies. however, we do not have any established principles or framework related to stakeholders. we will learn by doing and reviewing experiences. why have we not done better compared with many traditional western economies in this aspect? it has to do with the mistakes in the past. for any country learning from the history and past experiences is a very important, though not an easy task, and one that is liable to misunderstanding. an example at hand is the americans ’ review of the great recession in 1929. the reviews generated different conclusions right after the recession and in the 30 ’ s and 40 ’ s