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Spain under pressure from China over ICBC bank raid
Police raided the ICBC bank and arrested its director. Photo: AFP

Spain under pressure from China over ICBC bank raid

AFP · 18 Feb 2016, 11:18

Published: 18 Feb 2016 11:18 GMT+01:00

Spanish police searched the Madrid branch of ICBC on Wednesday, arresting five of its directors as part of a probe into the suspected laundering of at least €40 million ($44.5 million).

"We hope that the Spanish side would deal with the relevant issue in accordance with the law and honestly safeguard the legal rights and interests of Chinese companies", foreign ministry spokesman Hong Lei said during a regular press briefing.

A spokesman for the bank in Beijing told Chinese media that its Madrid branch will actively cooperate with the investigation, saying that the bank "strictly implements anti-money laundering provisions" and operates in compliance with regulations, adding that the bank's Europe-based lawyers have hurried to Madrid in response to the probe.

The bank is suspected of allowing funds earned through the alleged crimes of smuggling, tax fraud and labour exploitation to be transferred "to China in a way that appeared legal", Spanish police said in a statement.  

"Spain has become an important destination of investment from Chinese companies and financial institutions", Hong said, calling on the country to "safeguard the sound state" of the relationship.

Spanish police said the raid was a follow-up to an operation carried out last year that targeted Madrid-based Chinese gangs suspected of importing huge amounts of goods from China without declaring them on customs forms to avoid import and tax duties.

The crime groups allegedly deposited their illicit proceeds into ICBC accounts, with the lender accused of sending the funds to China without checking their origin as required by law.

ICBC is not the first Chinese bank embroiled in controversy over money-laundering overseas.

Last June Italian prosecutors alleged that the Bank of China was involved in illegal transfers of large sums of money out of the country.    

Story continues below…

A month later the US Federal Reserve faulted China Construction Bank for weaknesses in its anti-money-laundering programme.  

ICBC is the world's largest bank by market capitalisation. It entered the Spanish market in January 2011 with the inauguration of its branch in Madrid.    

More than 190,000 Chinese nationals legally live in Spain, making the Chinese immigrant population the fourth largest foreign community in the country, according to Spain's national statistics institute INE.

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