Bank of China pays $4mn in money laundering case

Bloomberg

Bank of China Ltd agreed to pay 3.9 million euros ($4.2 million) to settle a French probe into allegations it turned a blind eye as customers moved millions to their Asian accounts without paying European taxes.
Paris prosecutor Remi Heitz said Bank of China will pay a 3 million-euro fine and 900,000 euros in damages to French tax authorities to end the criminal prosecution. The case will continue against 28 business owners and intermediaries involved in transferring the funds to China, Heitz said on Tuesday.
The Beijing-based bank had been charged with aggravated money laundering over the transfer of suspect funds worth nearly 40 million euros to 168 Bank of China accounts mostly in the Zhejiang province — south of Shanghai — between 2012 and 2014. Those charges are dropped as part of the settlement, which was approved by a Paris judge on January 15 and is now final.
Bank of China follows in the footsteps of Google and Societe Generale SA in reaching a settlement in France thanks to a US-style tool inaugurated by HSBC Holdings Plc in 2017. While the fine is modest, the Bank of China deal is the first negotiated by Paris prosecutors. The Parquet National Financier had extracted penalties between a quarter and half a billion euros a piece from the search-engine giant and the two banks.
Under the terms of the Bank of China deal, the lender acknowledged underlying facts as well as the corresponding legal qualification used by investigators, but didn’t plead guilty.
As part of the case, French authorities accused the Beijing-based bank of standing idly — failing to request any proof of earnings — as account holders with no particular business activity in China received money from commercial firms.
The funds first passed through companies in France and other European countries such as Spain, Lithuania and Poland before landing in Bank of China accounts in Asia. French investigators suspected the funds initially came from undeclared sales of Chinese businesses based north of Paris.
The probe began after a routine check following a red flag. Criminal authorities began investigations in 2013 after the French anti-money laundering body, known as Tracfin, noticed a very unusual increase over a few months in the revenue of a Paris-based shop that specialized in urgent locksmith and plumbing repairs.