After entering the Spanish market in January 2011, ICBC set up a Madrid-based entity with services mainly utilized by Asian crime groups, most notably Emperador-Cheqia and Snake, according to an AFP report citing the national court.
It attracted 140 million euros ($157 million) in deposits including $46.7 million in cash payments between January 2011 and October 2012 from Snake which held 70 accounts with the bank. Investigations subsequently kicked off in February 2016 when police arrested bank employees suspected of moving money without checking the origins of the funds as required by law.
Four employees, including two senior executives from ICBC’s Spain branch, were fined $22.5 million and received jail terms between three and five months. All four are unlikely to serve the term as first-time offenders in Spain are often spared jail sentences of under two years for non-violent crimes.
Ideal for Massive Money Laundering
ICBC helped provide a cover for fund movements through split payments, anonymous in-house accounts and shared use of false identity documents. Bank staff including European director-general Liu Gang and two others had stubbornly disregarded anti-money laundering regulations and accepted cash deposits of any amount, the report added.
“The Spanish branch was an ideal instrument for massive-money laundering operations in the service of criminal organizations,” the court said.
The report added that while the criminal group Snake tried to move money through many other banks, such attempts flagged anti-money laundering controls elsewhere and requests could not be executed. In contrast, ICBC’s Spain branch was the only entity that did not send a single report about suspicious transactions to the country’s money-laundering watchdog SEPBLAC between 2011 and 2016.
In addition to reprimanding the serious failure of its parent company ICBC Luxembourg to ensure compliance at its Spanish subsidiary, the court also barred ICBC Spain from subsidies, state aid, financial incentives or benefits for two years to ensure it can avoid being exploited in the future in a similar criminal situation.