This interesting sentence convicts several executives and employees of the bank ICBC – INDUSTRIAL AND COMMERCIAL BANK OF CHINA – SUCURSAL ESPAÑA (“ICBC Sucursal España”), as perpetrators of a money laundering crime under articles 301.1 and 2, and 303 of the Criminal Code. The defendants confessed to the facts and expressed their conformity with the legal qualification and the penalties requested by the prosecution, being sentenced to prison sentences and fines, although the prison sentences were replaced by fines in accordance with the provisions of Article 88 of the Criminal Code prior to the reform introduced in 2015.
Facts:
During the years 2011 and 2012, the defendants had managed the entry of considerable sums of cash by organizations formed by Asian citizens from commercial operations of the underground economy, which were then transferred abroad by ICBC Sucursal España through accounts of special purpose vehicles and other ways. These operations were carried out by ICBC managers in breach of the measures and checks provided for by the money laundering prevention regulations, even using internal accounts of the bank itself for the operations. In this way, ICBC Sucursal España consciously served as a money laundering channel.
The measure of article 129 of the Penal Code imposed on ICBC Sucursal España:
Article 129 of the Criminal Code provides for the imposition of one or more accessory consequences on the companies or organizations (even if they do not have legal personality) within which the crime was committed, referring to the penalties provided for in Article 33(7)(c) to (g) of the Criminal Code.
Pursuant to this article, the Public Prosecutor’s Office requested that ICBC Sucursal España be disqualified from obtaining public subsidies or aid, from enjoying tax or Social Security incentives and benefits for two years, as a post-criminal security measure pursuant to article 129 of the Criminal Code, in relation to paragraph 7, letter f), of article 33 of the same.
No measures were requested for ICBC Luxembourg (parent company) as it was considered proven that it was unaware of the practices of the Spanish branch and that it only became aware of them when the search activities in the Spanish branch were revealed. In addition, it is considered proven that ICBC Luxembourg carried out substantial changes in the prevention of money laundering and regulatory compliance and promoted in-depth reviews of the client portfolio, making dozens of reports of suspicious transactions to SEPBLAC.
In the trial, ICBC Sucursal España expressed its disagreement with the imposition of this measure alleging lack of necessity, proportionality and adequacy. In particular, it argued that it had implemented changes in banking practices in relation to cash deposits, that it had made profound organizational changes to substantially improve its anti-money laundering compliance model and that the measure imposed was not proportional, adequate or effective, since the disqualification from obtaining subsidies and public aid, tax or Social Security benefits or incentives would not be suitable to prevent the commission of new crimes.
The Chamber first analyzes the appropriateness of adopting, in general, a security measure materialized in the accessory consequence of Article 129, in relation to Article 33 of the Criminal Code, concluding that there are no substantial objections to this possibility derived from the principle of legality.
It should be noted at this point that the Public Prosecutor’s Office, while charging the Spanish branch, does not make a specific criminal claim against the legal entity ICBC Luxembourg (of which the branch is a part) and only requests the aforementioned post-criminal security measure of article 129 of the Criminal Code. The Chamber understands that the request for the measure by the Public Prosecutor’s Office is based on the fact that it considers that there is a risk of the commission of new crimes within the entity.
Although the Court recognizes that the substantial improvement of the compliance and internal control systems carried out in the entity (promoted by the parent company) reduces the risk, it understands that this does not imply that any future risk of instrumentalization of the Spanish entity for criminal purposes disappears.
With regard to the suitability of the security measure, the Chamber confirms that it is of very short and limited scope, stating that “the catalog of accessory consequences provided for in Article 129 with its reference to the limited list of number 7 of Article 33, gives few options to establish a security measure of real effect and effectiveness against all possible criminal risks” and that it cannot therefore be considered that the measure “specifically requested by the Public Prosecutor’s Office, much less severe than others provided for in the rule, is inadequate, because it is useless, which it is not, although it must be considered to have limited effect”. It therefore considers that the measure is neither disproportionate nor useless, even if it is of very limited scope.
For these reasons, the Court considers it appropriate to impose the measure and sentence ICBC Sucursal España in the terms requested by the Public Prosecutor’s Office.
