BEIJING, April 25 (Xinhua) -- China is widening the net to monitor flows of illicit money in a bill drawn up to combat rampant money laundering and its upstream crimes, such as smuggling, drug trafficking, and bribery.

    The draft law of anti-money laundering was submitted to the Standing Committee of the National People's Congress, or the top legislature, for first deliberation on Tuesday and it is expected to be passed into law after at least three rounds of hearings, according to China's law-making procedure.

    "Money laundering has grown into a prominent problem in China, in the wake of rising serious crimes such as smuggling, drug dealing and corruption," said Feng Shuping, deputy director of the Budgetary Work Commission of the NPC Standing Committee, who briefed the legislature on the draft law.

    According to the China Anti-Money Laundering Monitoring and Analysis Center, an office under the central bank set up in 2004, it had forwarded 683 suspicious money laundering reports to the police by the end of 2005, involving 137.8 billion yuan (17.2 billion U.S. dollars) and over one billion U.S. dollars.

    The draft legislation, aimed to set up an all-around monitoring system, has widened the track-down scope of suspicious money flowsfrom the banking sector to cover insurance and securities firms, law firms, accounting agents, and businesses such as real estate, jewelry sales and auction, she said.

    The bill orders these businesses to data-base clients' background information, report large and suspicious transactions to the money-laundering information collecting center for analysis.

    The monitoring network also includes corruption, financial frauds as the profit-generating crimes that lead to money laundering crime, whose "upstream crimes" involve drug trafficking,smuggling, organized and terror crimes.

    Feng said it is pressing to speed up anti-money laundering legislation as illegal money transactions have disturbed the financial order, posing a threat to economic security and social stability.

    China's central bank issued the nation's first anti-money laundering regulations in March 2003, specifying the obligations of financial institutions, largely in the banking sector, to report unusual and large transactions.

    "The current legal framework to monitor anti-money laundering is not well-founded, having little effect and delaying the country's efforts to counter money launder," she said.

    A lawmaker involved in the legislation said it is difficult to predict how much black money is washed clean every year in China, but there is a trend of money laundering spreading from developed countries to less-developed countries.

    "So the legislation is of crucial importance," said Yu Guangyuan, an official with the Budgetary Work Commission of the NPC Standing Committee. Enditem