Officials say Chinese entities abroad should obey local laws
The Madrid branch of China's biggest lender, Industrial and Commercial Bank of China (ICBC), is actively cooperating with the Spanish authorities in an investigation and the branch resumed business on Thursday morning local time, a Beijing-based spokesman for ICBC said Thursday.
The Chinese government expects all Chinese enterprises operating overseas to strictly comply with the laws and regulations of China as well as foreign countries, the Ministry of Foreign Affairs told a media briefing on Thursday.
The ministry said it believes that the Spanish authorities will deal fairly with the case in accordance with the law in a bid to secure the legal rights of Chinese firms and employees in Spain.
The bank is watching the probe closely, the spokesman told the Global Times on Thursday.
Media reports said Spanish authorities raided the Madrid branch of ICBC on Wednesday and detained five directors, as part of an investigation into the bank over alleged money laundering.
The bank's Spanish unit is suspected of laundering of at least 40 million euros ($44.6 million) in deposits from suspected criminal organizations, according to Europol, the police agency of the EU, which helped the Spanish police in the probe.
The lender is accused of being used to "introduce into the financial system funds earned through the alleged crimes of smuggling, tax fraud and the violation of workers' rights, allowing the transfer of the funds to China in a way that appeared legal," Europol said in a statement released Wednesday.
The probe builds on a raid in Spain in May 2015 known as "Operation Snake," which dismantled an alleged Chinese criminal network that authorities suspected of importing goods from China to Spain without declaring them on customs forms to avoid import and tax duties, Europol noted.
Thirty people were arrested in that case, The New York Times reported on Wednesday.
Spanish police said they had followed "the money trail" after the operation in 2015 and found that the crime groups had deposited earnings into the Spanish subsidiary of ICBC.
The bank then remitted the money to China "without checking the origin as required by law," according to Europol.
There has been no previous such case involving Chinese financial institutions in the global market and the case of ICBC's Madrid unit is a warning for overseas Chinese firms and financial organizations that they should strictly operate within the law and regulations of China and the foreign markets they enter, Chen Fengying, an expert at the China Institutes of Contemporary International Relations, told the Global Times on Thursday.
Chen noted that money laundering is a crime everywhere.
It can be committed in several ways, including depositing money in banks and investing in overseas projects, Chen said.
As to financial institutions, they should carefully check the origin of funds as required by law, Wang Jun, deputy director of the Department of Information at the China Center for International Economic Exchanges, told the Global Times on Thursday.
"Strictly implementing anti-money laundering regulations is the basic obligation of a bank," he noted.
Chen also said that China should strengthen regulations governing the overseas operations of Chinese firms and financial institutions.
The Chinese Embassy in Spain responded to the probe immediately on Wednesday, saying in a statement on its website that "according to our information, Chinese companies in Spain strictly operate within the law and regulations."
In October 2010, ICBC obtained a banking license for its branch in Spain from the Bank of Spain and commenced business in January 2011, according to the Spanish unit's website.
The bank was the first Chinese commercial bank to establish a branch in Spain.
