China is hoping to boost its chances of becoming a member of the Financial Action Task Force (FATF), an international anti-money laundering organization, with a set of tough new regulations which were released by the People's Bank of China (PBOC) on Monday.

The regulations require financial institutions in China to immediately report suspected terrorist financing deals and to improve customer data collection and security measures.

Financial institutions are required to report suspect financing deals to the China Anti-Money Laundering Monitoring and Analysis Center (CAMLMAC) which is affiliated to the central bank.

The regulations came into effect on Monday.

Foreign owned financial institutions that operate in China are also required to abide by the regulations.

The FATF is scheduled to vote on China's entry into the organization this month.

The United States said last month it would support China's application for FATF membership.

"The regulation could help cut the capital chains of terrorist organizations and promote international cooperation in anti-terrorist financing efforts," said Zhao Peng, president of Anhui Branch of Industrial and Commercial Bank of China.

The central bank said financial institutions should report any client, capital or deal that is related to terrorism, terrorists, terrorist organizations and activities, "no matter how much capital or what assets are involved".

The banks should submit reports if their clients are suspected of being involved in terrorist organizations which are listed by the central government or the Security Council of the United Nations.

Financial institutions that fail to follow the regulation could be temporarily closed or even have their business license revoked.

By the end of 2005, the CAMLMAC has received 283,400 reports on suspect RMB deals and 1.9798 million reports involving foreign-currency deals. The center provided evidence relating to 683 suspect deals, involving 137.8 billion yuan (17.9 billion U.S. dollars) and over one billion U.S. dollars.