The Madrid branch of Chinese bank ICBC received cash in rucksacks and boxes from Chinese criminal groups in Spain and wired the money to accounts in China under a $100-million money-laundering scheme, Spanish prosecutors say.
Details of the allegations against ICBC are made public for the first time in a court document summarising an investigation into the alleged scam, nearly four months after police raided the state-owned bank’s Madrid office and arrested six directors.
In the document, which was drawn up by the prosecution but has attracted little attention since it was published this week, prosecutors describe ICBC, the world’s biggest bank by assets, as a “money laundering channel” between two criminal groups.
They do not name the groups but say they operated both in Spain and China and were involved in smuggling and tax fraud. Their illegal transfers were limited to 50,000 euros at a time to reduce the risk of detection and involved a web of shell companies to mask the trail, the prosecution says.
In the court document, the bank is also accused by the prosecution of trying to mislead investigators by providing receipts unrelated to the case and by inadequately identifying clients.
According to the document, the bank transferred at least 90 million euros ($102 million) between 2011 and 2014, more than twice the amount announced by European police force Europol at the time of the raid in February.
Though this is a small portion of the $3.6 trillion assets managed by ICBC, people familiar with the bank’s thinking said ICBC was worried the case could threaten its growth in Europe by damaging its reputation and drawing more attention from regulators.
In response to the charges, the chairman of the Industrial and Commercial Bank of China’s European division, which is based in Luxembourg, said it operated in accordance with the law and would continue to improve its capacity to tackle money laundering.
“The investigation is still going on, a trial has not been opened, and no verdict has been issued, therefore there should not be references to the bank’s guilt,” ICBC Europe Chairman Chen Fei said in a statement issued by the Madrid office of public relations firm Kreab.
A lawyer representing ICBC’s Spanish branch declined to comment when asked about the accusations.
POSSIBLE FINE
If found guilty of failing to comply with international regulations on money laundering, ICBC could face an unspecified fine. The case could also lead to a review of its Spanish banking licence.
Three of the ICBC directors arrested in February, including Madrid branch chief Wei Liu and European head Liu Gang, were provisionally released from custody in April after a court decided there was no flight risk and dismissed concerns that they might destroy evidence.
Three others paid bail of 100,000 euros at the time of arrest.
None of the executives has made any comment on the case since it started. Reuters could not reach them for comment.
The investigation was assigned to Spain’s High Court last month. Once completed, the court will decide whether to close the case or hold a trial.
China’s foreign ministry has asked Spain to protect the rights and interests of Chinese companies and citizens there and handle the case in accordance with the law.
ICBC opened its Madrid office in 2011 as part of a push into Europe. Its Spanish unit managed 813 million euros of assets at the end of 2015 with around 50 employees, according to Spain’s banking association.
The prosecution’s accusations are based heavily on documents seized from the bank by police and from witness testimony provided by employees, said a source involved in the judicial investigation into ICBC’s Madrid branch.
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