China has passed its first money laundering law, which takes aim at fraud, bribery and violating financial management order, the official Xinhua news agency said yesterday.

The law would come into effect on January 1, it added. ?The law will allow the central bank and its branch offices to monitor and investigate the flow of suspect money and allow them to mete out administrative punishment to employees for allowing the illegal transfer of money,? Xinhua said last week.

China has pledged to step up coordination with other countries to combat global money laundering. China?s alleged involvement in international money laundering has recently taken on political dimensions, after two banks in Macau came under US scrutiny for possible connection with North Korea?s illicit fund-raising network.

In April, China?s central bank issued a series of draft regulations aimed at beefing up efforts to rein in money laundering across its banking, securities and insurance sectors.

The central bank said the new regulations would largely seek to ensure that financial institutions kept close tabs on the identity of their customers and the nature of suspicious transactions. According to the central bank, last year the police investigated almost 700 money laundering cases worth more than $18 billion, Xinhua added.