An investigation published by Reuters in July revealed how ICBC Luxembourg allegedly helped a group of clients from Spain’s Chinese business community avoid duty and tax on the sale of consumer goods imported from China.
Spanish officials told Reuters that the bank’s Madrid branch had transferred about € 225 million (US$ 269 million) to China between 2011 and 2013 mostly to suspected criminal networks.
These networks also sent funds through money transfer firms in Spain and smuggled massive cash by road all the way to China.
A statement from the Spanish High Court said the bank’s headquarters is suspected of money laundering.
The money transfers were divided and concealed by using methods such as internal unnamed bank accounts, falsified documents and identity cards and fake invoices, the court said.
“Therefore, it can be concluded that between 2011 and 2014 there was no banking activity other than capturing money from criminal groups to which it was providing banking services to conceal their earnings and transfer them to China,” the court ruling said.
ICBC received about € 510 million (US$ 609 million) in cash between 2011 and 2014, according to the court.
Spanish prosecutors started looking into ICBC Luxembourg, which holds the lender’s European Union bank license and is in charge of the Madrid branch, following the arrest of seven ICBC executives in Madrid over money laundering allegations.
Among those arrested were the Madrid branch manager Liu Wei and the general manager of the bank’s European division, Liu Gang, according to Reuters.
“ICBC Luxembourg was aware at the time of the way ICBC Spain was operating, and the Luxembourg headquarters provided it with internal audit services,” Spain’s High Court ruling said.
ICBC Europe could face a fine, asset seizures or dissolution if found guilty.
