AML Current Status & Challenges

• • Each year, money laundered around the world amounts to US $ 2-3 trillion.
• • As per SAFE Report, money laundered in China each year reaches RMB 200 billion.
• • In 2005, the China Anti-Money Laundering Monitoring and Analyzing Center (CALMAC) received 102 million counts of large amount transaction (LAT) reporting and 2.834 billion counts of suspicious transaction (ST) reporting.

PRC AML Legal Framework
In order to prevent money laundering activities, maintain financial order, and contain money laundering crimes and other relevant crimes, the National People’s Congress enacted the PRC Anti-Money Laundering Law (“the AML Law”) on October 31^st, 2006, effective as of January 1, 2007. Additionally, the central bank issued the Financial Institution Anti-Money Laundering Regulation and the Financial Institution Large Amount Transaction and Suspicious Transaction Reporting Administration Method on November 14^th, 2006. These regulations have further defined AML duties required of insurers and other financial institutions, effective as of January 1^st and March 1^st, 2007, respectively. In order to comply with the requirements of the PRC Anti-Money Laundering Law and related regulations, AIU CHO Legal has set up the Handbook on Anti-money Laundering Policy for AIU China Branches. All AIU China subsidiaries and employees shall follow the policies and procedures set forth in the AML handbook.

AML Training
In order to follow the AML Law and further enhance employees' awareness of compliance, AIU CHO Legal provided separate AML training programs for nearly 700 employees at offices in Shanghai, Guangzhou, Shenzhen, Foshan and Dongguan. Training mainly covers AML fundamentals, case studies and the significance and importance of AML, with a focus on the AML rules and procedures developed by AIU China. The rules and procedures include AML internal control roles, relevant internal control procedures and framework, and detailed explanations given for the Know-Your-Customer (KYC) policy and LAT/ST reporting procedures.
As AML represents a long-term task and the relevant legal framework is constantly improving, it will be a new challenge to fulfill AML duties while maintaining the Company' s normal business operations. In order to ensure better AML work, CHO Legal will work closely with other departments in anticipation of active involvement of every fellow employee. CHO Legal encourages employees to contact them if any problems or issues are encountered in the course of the business.

AML Tips:
1. Establish and improve AML internal controls.
2. Set up and implement KYC policy. At the point of establishing business relations with the customers, effectively ascertain the identity of parties or non-parties to the insurance contract and complete KYC checklist as per the Company’s requirements.
3. Reporting of LAT/ST in RMB or foreign currency. Upon detection of any LAT/ST, prepare and submit LAT/ST notification to CHO Compliance within 1 or 2 working days.

AML is the responsibility of every employee.