Madrid (AFP) – Spanish authorities announced Thursday they have pressed charges against CaixaBank, the nation’s third largest lender, for breaching money laundering laws by turning a blind eye to dubious transfers by Chinese companies.
The prosecutor tasked with investigating suspected money laundering by China’s state-owned ICBC bank, which has a partnership with CaixaBank, said the Spanish bank suffered from “serious malfunctions in its systems to prevent money laundering.”
Spanish authorities wrote to CaixaBank to signal suspicious behaviour by nearly 200 clients between 2013 and 2015. The clients made large deposits in cash in branch offices, then transfered it to Hong Kong and China, totalling nearly 100 million euros (around $120 million).
The authorities believe that firms fraudulently imported goods to sell them on the black market, and then deposited the cash earned to send to China.
The prosecutor said the branches ignored the warnings and allowed frontmen to open accounts into which millions in cash were deposited, with the funds usually being transferred to China within two or three days after being deposited.
When contacted by AFP, CaixaBank denied “any type of collaboration or participation in suspected money laundering crimes by Chinese citizens” and insisted that it respected regulations aimed at preventing money laundering at all times.
Last month the US Federal Reserve warned ICBC, the world’s largest lender, to boost its money laundering safeguards.