The state-controlled ICBC was fined $701,250 last year under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
New Delhi: China’s biggest state-controlled bank, the Industrial and Commercial Bank of China (ICBC), has been imposed a fine of Rs 4 core by Canadian regulators for failing to inform the latter about suspicious transactions related to money laundering or terrorist financing offence.
Financial Transactions and Reports Analysis Centre (FINTRAC), Canada’s nodal financial intelligence agency, had found, during a compliance examination of the bank’s book of 2019, that ICBC failed to treat banking activities of “some” entities as high risk.
It also failed to take prescribed special measures to prevent such transactions while failing to submit suspicious transaction reports where there were reasonable grounds to suspect that transactions were related to a money laundering or terrorist financing offence.
Following this, ICBC, which has eight branches in Canada, was imposed a penalty of $701,250 on 4 October last year under the provision of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. This order was made public last month.
As per FINTRAC officials, the ICBC paid the fine in full and the case is “closed” now.
ICBC operates one branch in Mumbai, India.
However, these revelations, of China’s biggest state-controlled bank “facilitating” banking transactions to launder money and finance terrorist activities, are unlikely to be missed by relevant government agencies in India, who are tasked with the responsibility of keeping an eye on terror funding that emanates from Pakistan.
According to Indian officials, because of the intense pressure created by the series of actions taken by the Financial Action Task Force (FATF), the relevant Pakistani agencies who arrange finances to terror networks, have been exploring new ways and routes to transfer money to terror organisations because transactions that originate in Pakistan are being minutely monitored and traced by global agencies.
“In this context, it becomes pertinent to analyse whether Chinese financial institutions are acting as conduits to further the disruptive agenda of the Pakistan deep state. While Pakistani banks and other banks in a few Gulf countries are under scanner, that is not the case with Chinese banks so far. China’s nexus with Pakistan, when it comes to tacitly supporting armed groups (Jaish-e-Mohammad, Afghan Taliban) are well documented now. With this latest development, the global agencies will become more concerned about the role, if any, that is being played by Chinese banks to support terror financing,” an official with an intelligence agency told The Sunday Guardian.
The Sunday Guardian’s email to ICBC seeking their response in the matter, did not elicit any response till the time this report went to press.
ICBC, in a media statement released post the FINTRAC order, had blamed “paperwork” for the mistakes, while denying any misconduct.