Spanish Court Penalises Four ICBC Employees for AML Violations

Criminal groups deposited millions of euros cash into accounts at ICBC Spain using split payments, in-house accounts and false identity documents to evade detection.

Spain’s top criminal court on Thursday (2 July) fined four former ICBC employees EUR 22.7 million (USD 25.6 million) for laundering millions of euros for Chinese criminal groups, reports AFP.

The four – including two senior executives of ICBC’s Madrid branch – were also sentenced to jail terms of between three and five months, but are likely to be spared any actual jail time as is customary for first-time offenders of non-violent crimes in Spain.

In February 2016, Spanish police arrested six bank officials on suspicions that they allowed traders to move illicit proceeds earned through smuggling and tax fraud out of the country, without checking the origin of the funds as required by law.

Bank staff, including its European director-general Liu Gang and two other employees, had “stubbornly disregarded” regulations against money laundering and were accepting cash deposits of any amount, the court said.

A criminal group known as Snake had paid EUR 41.6 million in cash into ICBC between January 2011 and October 2012, with the help of bank staff, who allowed the use of in-house accounts, false identity documents and split payments. In Spain, deposits under EUR 50,000 do not have to be mandatorily reported to authorities.

Snake is said to have tried to move money through “many other banks” but was blocked by their AML mechanisms.

“The Spanish branch [of ICBC] was an ideal instrument for massive money laundering operations in the service of criminal organisations,” the court said.

From 2011 to 2016, the ICBC Madrid branch was the only entity that did not report a single suspicious transaction to SEPBLAC, Spain’s FIU (financial intelligence unit) and AML/CFT supervisory authority.

The court flagged a “serious failure” by the bank’s parent company, ICBC Luxembourg, saying it had failed in its obligation to ensure its subsidiaries were complying with AML regulations.

Restrictions have been imposed on ICBC Spain, barring it from receiving subsidies, state aid, financial incentives or benefits for two years.

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