Govt concerned over money-laundering claims at ICBC’s Madrid branch
China has expressed its concern over a raid by Spanish law enforcement officers on theMadrid branch of Industrial and Commercial Bank of China Ltd as part of an investigation intoalleged money laundering.
Ministry of Foreign Affairs spokesman Hong Lei said on Thursday: “The Chinese governmentalways demands that domestic companies operating abroad strictly abide by the laws, both ofChina and the country they are working in.
“At the same time, we hope Spain will handle relevant issues fairly according to the laws,guarantee the legal rights of Chinese companies and staff there, and maintain gooddevelopment of Sino-Spanish relations.”
He said Spain has become an important destination for Chinese investments, which havebenefited both countries.
Reuters reported the Spanish authorities had arrested five ICBC directors in its capital branchon Wednesday, as part of a joint investigation by the country’s Civil Guard and Spain’s Anti-Corruption Attorney’s Office into the laundering of at least 40 million euros ($44.5 million).
Agence France-Presse quoted the Spanish police as saying the raid was a follow-up to amajor operation launched last year that targeted Chinese gangs based in Madrid suspected ofimporting huge amounts of undeclared goods from China, to avoid paying import duties.
The crime groups allegedly deposited their earnings into ICBC, which is accused of thensending the funds to China without checking their origin, AFP reported.
The bank said in a statement it is closely following the investigation, and has sent directors ofICBC (Europe) and lawyers to its Madrid branch to cooperate with the investigators.
“We always maintain the basic management principles of strictly enforcing anti-moneylaundering regulations and insisting on legal and compliance management.
“Our Madrid branch is cooperating actively with the investigation,” the bank said.
The Chinese embassy in Spain reiterated in a statement on Wednesday the Chinesegovernment demands all accredited Chinese companies working abroad strictly abide by thelaw.
“According to the information in our possession, all the Chinese offices in Spain have actedaccording to these demands,” the embassy said.
ICBC opened its first Spanish branch in Madrid in January 2011, followed by a second one inBarcelona a year later.
At present, the bank has 400 overseas outlets in 42 countries and regions.
Gao Ming, general manager of the lender’s international banking department, said last year itwould further expand its global footprint.
Like other Chinese commercial lenders, ICBC is adjusting its business strategy to deal withchallenges such as interest-rate liberalization, the reduction of banks’ role as middlemen, andincreasing competition from Internet finance.
Chairman Jiang Jianqing said its global expansion has helped the bank overcome thesechallenges by boosting profits.
Zeng Gang, director of banking research at the Chinese Academy of Social Sciences’ Instituteof Finance and Banking, said it is inevitable that banks and companies from all countries facelegal risks during transnational development.
“Chinese banks should carefully plan their internationalization strategies, paying closeattention to compliance risks, and defending their legitimate rights and interests,” he said.