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Image copyright Reuters Image caption A report into a Chinese-backed black market is being launched in a bid to tackle tax evasion
A Chinese bank has said it will crack down on tax evasion in China, it has been told.
The firm, Huayai Bank, said it would offer to help Chinese citizens suspected of dealing in drugs or weapons make their way to a state where they may face criminal charges.
The report also said it would allow for citizens to register their own bank accounts by contacting the authorities.
The Chinese financial regulator said the new policy will not affect Hong Kong residents.
China is on track to set up about 4bn (2.4bn) of its own private banks by 2016.
One US law firm has also warned the US could take action against some Chinese nationals in China by using a law enforcement tool, including by giving them special treatment.
‘Red tape’
The Chinese report said Huayai would soon introduce legislation to protect foreigners with Chinese passports by putting them in escrow.
We are concerned about an influx of Chinese citizens to China, said Huai CEO Lu Xiaobo in a statement.
This is because the financial services sector is struggling to expand its business base in China, with a growing population.
‘Lucky’ business model
Hong Kong law firm Lippincott Williams said it would not be interested in criminalising the Chinese.
It told the Hong Kong Times that it was still pursuing further research on revenue laundering, tax evasion and international drug smuggling.
According to a report by Hong Kong law firm Lippincott Williams, illegal trading by Chinese citizens could lead to a criminal sentence of up to 12 years in jail, as well as a fine of up to 5,000 (4,000) a day.
The paper said that some legal experts have suggested the risk of criminal prosecution for those who do not face any penalties, while others have suggested a possible up to six years jail, including up to 10 years on all mainland officials.
Image copyright Reuters Image caption Foreign investment is still strong in Hong Kong
Image copyright Reuters Image caption One Chinese citizen has been arrested to face criminal charges for selling drugs at a drug-traff
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