Bank of China considering its options in Italy money laundering case

[FLORENCE] Bank of China (BOC) said it is considering all its options in an Italian case in which it is accused that billions of euros of illicit earnings were laundered through its Milan branch, a company spokeswoman told Reuters on Wednesday.

One of the options open to the BOC is settling the case before it goest to trial.

In the so-called "River of Money" investigation, Florence prosecutors allege that more than 4.5 billion euros (S$6.83 billion) was smuggled to China from Italy between 2006 and 2010 by Chinese living mainly in the Tuscan cities of Florence and Prato.

About half of the money, or 2.2 billion euros, was sent via BOC, prosecutors say in a court document seen by Reuters, which also says China's fourth-biggest bank received more than 758,000 euros in commissions on the transfers.

When asked whether the lender was considering settling out of court, a BOC spokeswoman in Italy told Reuters: "Since it is an initial phase of the trial process in which several judicial alternatives can be chosen, Bank of China is considering all its options."

BOC has denied any wrongdoing, and according to Italian law the lender could settle the case without formally admitting any it had committed a crime.

Separately, a judicial source in Florence said there had not yet been a request by BOC to settle the case before it goes to trial, but he believed "it is an option that they are considering."

The first of five preliminary hearings on the case was held in Florence on Wednesday. The last one is due on July 13, but other hearings could be called.

When the hearings are over, judge Paola Liguori will decide whether to order a trial or archive the case, which also includes almost 300 individual defendants. If a plea bargain or settlement is requested by one of the defendants, this would be decided by the same judge at the end of the hearing process.

According to prosecutors, the proceeds sent to China came from a series of illegal activities, including counterfeiting, embezzlement, exploitation of illegal labour and tax evasion.

The bank was included in the case because under Italian law it has administrative responsibility for four officials among the accused who worked at its Milan branch during the period under investigation.

The four officials are accused of failing to report suspicious transactions and of other actions that helped to conceal the origin and destination of the funds and facilitated Money2Money (M2M) transfer service money laundering activities.

REUTERS