A policeman stands guard at a police van in Madrid, Spain, on Sept. 1, 2014. (Photo : Getty Images)
Spanish authorities have raided the Madrid branch of Industrial & Commercial Bank of China Ltd. (ICBC) on Wednesday and detained five of its directors over allegations of money laundering.
Among those arrested were the branch director and a deputy director, according to the Global Times citing an insider source.
Spanish and European law enforcement agencies are conducting an investigation on ICBC's Spanish unit for allegedly laundering at least 40 million euros ($44.6 million) in deposits from suspected criminal organizations, Europol, Europe's law-enforcement coordinating body, said.
ICBC, China's biggest lender, is "accused of sending the funds to China without checking their origin as required by law," said Europol, which aided Spanish police in the investigation dubbed as "Operation Shadow."
According to police, the bank reportedly introduced to Spain's financial system funds earned through smuggling, tax fraud, and human rights violations and allowing it to return to China in a way that appeared legal.
In a statement issued from its Beijing headquarters, ICBC said that its Madrid branch is actively cooperating with authorities in the probe.
"Strictly implementing anti-money laundering regulations, and strictly operating within the law and regulations have always been our fundamental operation and management principles," an ICBC spokesman told Reuters on Wednesday.
Zhu Jian, the consular counselor from the Chinese Embassy in Spain, said China is closely following any developments and may visit the Chinese nationals linked to the investigation.
"Chinese people in Spain should not worry too much about this matter, and media should quote their source strictly in their reports," Zhu added.
The Chinese government urged its Spanish counterpart on Thursday to guarantee the legitimate rights of Chinese companies and personnel in Spain.
The operation follows an earlier raid in Spain in May 2015 known as "Operation Snake," which shut down an alleged Chinese criminal gang that authorities suspected of illegally importing goods from China to Spain.
According to Europol, the gang had been operating since at least 2009 and was part of a larger criminal organization based in China that had allegedly laundered more than 300 million euros, primarily though countries in southern Europe. 32 people were arrested in Spain at the time.
Police later discovered the money earned from the illegal imports was deposited at ICBC in Spain, Europol said.
Further investigation revealed that other Chinese and Spanish criminal organizations had also been using ICBC's Spanish branch to transfer money earned from criminal activities.
"Operation Shadow shows all the challenges that modern transnational financial investigations entail: criminal activities that generate cash which is then injected into the financial system through the misuse of complex corporate structures," Igor Angelini, head of Europol's financial intelligence group, said in a statement.
"The complicity of several professionals who move the funds across different jurisdictions completes the picture," he added.
