An interpretation of several issues concerning the laws applicable to criminals including illegal fund payment and settlement and illegal transaction of foreign exchange was released by the Supreme People's Court (SPC) and the Supreme People's Procuratorate (SPP) on Jan 31 and came into effect on Feb 1.

As smuggling, corruption and cross-border drug crimes increase, the number of crimes related to underground banks such as illegal fund payments and settlements and illegal transactions of foreign exchange keeps growing.

The interpretation mainly covers judging standards of such transfers, the relevant principles of punishment and penalties for illegal business, money laundering and aiding and abetting terrorism, as well as sentencing guidelines for corporate crime including a definition of lenient punishment and determination of the location of parties involved in the transactions.

According to the interpretation, acts such as payment through fictitious financial transactions, fake pricing and refunding, illegal transfer of funds from a corporate account to a private account online to get cash, and illegally providing a cheque-cashing service are included among illegal fund payments and settlements.

Staff at the related departments at the SPC and SPP said that illegal foreign exchange transactions through underground banks are mainly done in two ways -- traditional domestic direct trading and trading across borders.

The interpretation stipulates that such acts will be considered illegal business operations.