Category: Money Laundering Typologies

Fei-Chen

Also known as: fei-ch'ien, fei qian, flying money, 飞钱

Simply put

Fei-chen (more commonly transliterated as "fei-ch'ien" or "fei qian," and literally meaning "flying money") is a term for a traditional, informal way of moving money or value between parties, often without funds physically crossing borders. It is one of several regional informal value transfer methods, similar in concept to hawala and hundi, that can be used for legitimate remittances but may also be misused to move illicit funds outside the regulated banking system.

Formal definition

Fei-chen is a regionally recognized term for an informal value transfer system (IVTS), a form of money or value transfer service (MVTS) that operates through networks of trusted intermediaries and offsetting settlement arrangements rather than through formal, fully regulated financial channels. The FATF Glossary to the FATF Recommendations lists "fei-chen" alongside hawala and hundi as examples of regional MVTS terminology; note that "fei-ch'ien" (Wade-Giles) and "fei qian" (pinyin) are the more widely used transliterations. From an AML/CFT perspective, MVTS providers are generally expected, in many jurisdictions, to be licensed or registered and subject to obligations such as customer due diligence, recordkeeping, and suspicious transaction reporting; however, the precise scope, thresholds, and licensing requirements vary by jurisdiction and should be confirmed against the applicable regime (for example, national implementing legislation reflecting the FATF standards, which are recommendations rather than binding law). The existence or use of a fei-chen/IVTS arrangement is not, in itself, evidence of criminality, as such systems also support legitimate remittance activity; it is relevant as a potential money laundering or terrorist financing risk factor to be assessed on a risk-based basis. This entry addresses the AML/CFT typology term only and should not be confused with the identical-looking personal name "Fei Chen."

Why it matters

Fei-chen matters to AML/CFT practitioners because it is one of the regional terms the FATF Glossary uses to describe informal value transfer systems (IVTS), a category of money or value transfer service (MVTS) that operates through trusted intermediaries and offsetting settlement rather than through fully regulated banking channels. Because value can move between parties without funds physically crossing borders, such systems create limited transparency for investigators and supervisors. This does not make them inherently illicit: fei-chen and comparable arrangements such as hawala and hundi support substantial legitimate remittance activity, particularly where formal banking access is limited or costly. The compliance relevance lies in the risk-based assessment of when such arrangements may be misused to move illicit funds outside regulated oversight.

Who it's relevant to

AML/CFT compliance officers at MVTS providers and banks

Those overseeing programs at money or value transfer businesses, or at banks that may bank such businesses, should understand fei-chen as one of the FATF-recognized regional IVTS/MVTS terms. In many jurisdictions MVTS providers are generally expected to be licensed or registered and subject to obligations such as customer due diligence, recordkeeping, and suspicious transaction reporting, but the precise scope, thresholds, and licensing requirements vary by jurisdiction and should be confirmed against the applicable national regime.

Financial intelligence analysts and investigators

Analysts assessing cross-border value movement should treat references to fei-chen (or the more common transliterations fei-ch'ien and fei qian) as pointing to an informal value transfer arrangement that may reduce transactional transparency. The presence of such a system is a risk factor to be weighed on a risk-based basis, not evidence of criminality in itself, since these systems also facilitate legitimate remittances.

Financial supervisors and policy staff

Those implementing or interpreting the FATF Recommendations should note that the FATF Glossary lists fei-chen alongside hawala and hundi as examples of regional MVTS terminology. Because the FATF Recommendations are standards rather than binding law, supervisors should reference their own national implementing legislation for the specific obligations, thresholds, and registration requirements that apply.

Inside Fei-Chen

Fei-chen (fei-ch'ien / fei qian, 飞钱)

A regional term meaning 'flying money' that the FATF Glossary to the Recommendations lists, alongside hawala and hundi, as an example of an informal money or value transfer service (MVTS). It refers to arrangements in which value is transferred between parties across distances without the corresponding physical movement of cash or a formal banking settlement.

Money or Value Transfer Service (MVTS) classification

Under the FATF Recommendations, systems of this type fall within the concept of MVTS. FATF Recommendation 14 sets standards for the licensing or registration and supervision of MVTS providers; these are international standards rather than binding law, and their effect depends on how each jurisdiction transposes them into its own regime.

Informal value transfer characteristics

As an informal value-transfer mechanism, arrangements described by this term typically rely on trust-based relationships, correspondent-style settlement between operators, and record-keeping practices that may differ from those of licensed financial institutions. The degree of formality, documentation, and regulatory oversight varies by jurisdiction and operator.

Terminology and transliteration

The accepted transliterations of the underlying term are 'fei-ch'ien' (Wade-Giles) and 'fei qian' (Pinyin). 'Fei-chen' appears as the form used in the FATF Glossary. Practitioners should treat these as variant renderings of the same MVTS concept rather than as distinct mechanisms, and should confirm the exact spelling used in the applicable source document.

Common questions

Answers to the questions practitioners most commonly ask about Fei-Chen.

Is "Fei-Chen" just a personal name, or does it have a specific meaning in AML/CFT?

It has a specific compliance meaning that should not be confused with the personal name "Fei Chen." In the AML/CFT context, "fei-chen" (also transliterated "fei-ch'ien" in Wade-Giles or "fei qian," 飞钱, literally "flying money") is listed in the FATF Glossary to the Recommendations, alongside hawala and hundi, as a recognised regional term for an informal money or value transfer service (MVTS). Practitioners encountering "fei-chen" in regulatory or typology documents should generally read it as a reference to this informal value-transfer concept rather than as an error.

What is the correct spelling of the typology, and why do multiple versions appear?

Multiple transliterations of the same underlying Chinese term coexist because they derive from different romanisation systems. The Wade-Giles form is "fei-ch'ien," the pinyin form is "fei qian," and the FATF Glossary uses "fei-chen." These generally refer to the same informal value-transfer concept. Because the FATF source itself uses "fei-chen," it is an accepted term in AML/CFT usage; analysts should treat these variants as pointing to the same MVTS typology rather than to distinct mechanisms.

How should a compliance team treat a reference to "fei-chen" appearing in a regulatory or supervisory document?

Generally, it should be treated as a reference to an informal money or value transfer service (MVTS), in the same category as hawala and hundi, consistent with the FATF Glossary. Because it denotes a value-transfer mechanism rather than an individual, teams should map it to their existing MVTS risk framework and controls rather than treating it as a name to screen. Exact obligations for MVTS providers vary by jurisdiction and should be confirmed against the applicable local regulation.

Where does the obligation to address informal value-transfer mechanisms like fei-chen actually come from?

The FATF Recommendations address money or value transfer services as a standard, not as binding law; FATF standards are implemented differently across regimes. In practice, the applicable obligations for an obliged entity depend on the transposing framework in its jurisdiction, such as the US Bank Secrecy Act and FinCEN money services business rules, the UK Money Laundering Regulations, or the relevant EU instruments. Practitioners should attribute any specific requirement to the correct source instrument in their jurisdiction rather than to a single global rule, and confirm scope and thresholds against that instrument.

Does identifying a transaction as involving a fei-chen-type mechanism establish that money laundering has occurred?

No. Informal value transfer is a mechanism that may be used for legitimate purposes as well as illicit ones, and the presence of an MVTS or informal value-transfer feature is a risk indicator, not proof of criminality. Typologies and red flags associated with informal value transfer are not exhaustive and do not by themselves establish wrongdoing. Any filing, alert, or supervisory observation is a compliance step to detect and manage risk, not a determination of a criminal offence.

How should analysts avoid confusing the fei-chen typology with the personal name "Fei Chen" in screening and research?

Analysts should distinguish the value-transfer concept (fei-chen / fei-ch'ien / fei qian) from any individual bearing the name "Fei Chen," as conflating the two can produce irrelevant matches and misattributed sources. When researching the typology, they should rely on AML/CFT sources that discuss informal value transfer, such as the FATF Glossary and applicable supervisory guidance, rather than sources referring to unrelated individuals. Verifying that a cited source actually addresses the MVTS concept, and not a namesake, helps ensure the reference supports an MVTS analysis rather than a name-screening one.

Common misconceptions

'Fei-chen' is merely a personal name and not a recognised AML/CFT term.

The FATF Glossary to the Recommendations expressly lists 'fei-chen' as an example of an informal money or value transfer service, placing it in the same category as hawala and hundi. It is an established term in AML/CFT typology and guidance literature, even though the same or similar spelling may also occur as a personal name in unrelated contexts.

Using an informal value transfer system such as this is inherently illegal or is itself proof of money laundering.

MVTS, including informal systems, are not inherently unlawful. The FATF standards contemplate that MVTS providers should be licensed or registered and supervised. Use of such a system does not, by itself, establish wrongdoing; it may present money laundering or terrorist financing risk that obliged entities are expected to detect, mitigate, and manage on a risk-based basis.

A single global rule governs how these systems are regulated.

The FATF Recommendations are international standards, not directly binding law. Whether and how a fei-chen-type arrangement is licensed, registered, or supervised depends on each jurisdiction's transposition, so obligations, thresholds, and scope may diverge, and the exact requirements should be confirmed against the applicable national regime.

Best practices

Treat references to 'fei-chen,' 'fei-ch'ien,' or 'fei qian' in regulatory or typology documents as denoting an informal MVTS, and cross-check the specific transliteration against the source (including the FATF Glossary) rather than assuming a spelling error.

Assess arrangements of this type under the MVTS framework, applying the licensing, registration, and supervision expectations set out in the applicable jurisdiction's transposition of FATF Recommendation 14, rather than a single assumed global rule.

Apply a risk-based approach: characterise informal value-transfer exposure as a risk to detect, deter, and mitigate, and avoid treating the mere involvement of such a system as proof of criminal conduct.

Confirm exact licensing thresholds, registration triggers, and supervisory obligations against the relevant national regulation, since these vary by jurisdiction and should not be assumed.

Ensure typology and training materials position fei-chen alongside hawala and hundi as informal MVTS examples, so staff recognise the term when it appears in guidance and do not dismiss it as a mistake or a personal name.

Document the basis for any risk assessment or filing decision involving such systems, distinguishing compliance observations from any assertion of criminal wrongdoing.