Experts call for greater awareness of anti-money laundering laws

Academics and lawyers said Chinese financial institutions that expand globally must know very well the anti-money laundering laws, regulations and common practice of the countries they are in and improve their AML internal control system accordingly.

Wu Qing, deputy director of banking research at the Development Research Center of the State Council, said China attaches great importance to anti-money laundering but its laws and regulations in this field are different from those in other countries, thus requiring the overseas branches of commercial banks to be familiar with the rules of their host countries.

A Hong Kong-based lawyer, who declined to be named, said anti-money laundering is extremely complicated that even banks from the United States and Europe often face such problems.

"Banks should be careful about entering the market of another country and they need to have a good knowledge of the new market, including its companies and the state of society," he said.

That task is easier said than done. Sometimes a bank does not know a problem has occurred until it breaks out. Everything goes well before that, he added.

The Madrid branch of Industrial and Commercial Bank of China Ltd, the nation's largest commercial lender by assets, was raided by Spanish law enforcement officers last week as part of an investigation into alleged money laundering, Agence France-Presse reported.

The bank told Xinhua News Agency in a written interview on Saturday: "The case is still in the process of investigation. As no judicial conclusion has been reached so far, people should not deduce the ICBC Madrid branch is guilty. We reserve the right to take legal action against those who maliciously scandalize our bank."

The bank said it strictly abides by the anti-money laundering regulations in its host countries and has built a tight AML management system.

It "conscientiously fulfills statutory duties such as client identification and the monitoring and reporting of suspicious transactions, constantly improves risk control over money laundering, and keeps strengthening the integrity, rationality and effectiveness of internal control".

"We established an anti-money laundering system for overseas branches with clear division of labor at the head office level. Each of our overseas branches built an AML mechanism led by the compliance department and participated by various business departments, with the executives taking responsibility. They also set up organization frameworks and operation mechanisms that are compatible with the regulatory requirements of local authorities," the bank said.

China has expressed its concern over the case. The Chinese embassy in Madrid issued a statement on Thursday, reiterating that the Chinese government always demands that domestic companies operating abroad strictly abide by the laws, both of China and the country they are working in.

"The Madrid branch of ICBC told its headquarters it used the latest anti-money laundering system provided by the Spanish authorities for strict supervision," the embassy said.

Foreign Ministry spokesman Hong Lei said on the same day: "We hope Spain will handle relevant issues fairly according to the laws, guarantee the legal rights of Chinese companies and staff there, and maintain good development of Sino-Spanish relations."

jiangxueqing@chinadaily.com.cn