Bank of Italy conducting supervisory inspection at bank of China offices through Lisa Jucca

HONG KONG The bank of Italy is sporting out an on-web page inspection at the Italian places of work of financial institution of China Ltd (601988.SS), a chinese language country-owned financial institution already going through accusations of helping illicit money flows from Italy to China, a source familiar with the state of affairs said.

Italian prosecutors are looking for to carry 297 people, usually chinese language, as well as the Milan branch of bank of China (3988.HK) to trial on fees of allegedly smuggling extra than 4.5 billion euros ($five.12 billion) into China among 2006 and 2010. A choose in Florence is within the system of deciding whether or not they need to be indicted and face a tribulation.

part of the probe, code named 'River of cash', specializes in the relationship among bank of China and defunct chinese language cash switch operator Money2Money, which used to dominate the marketplace for chinese remittances from Italy, a prosecutors' document reviewed by Reuters indicates.

The source said the supervisory inspection, which  began a few days ago and is persevering with, have been precipitated by using the judicial investigation in Florence. however the bank of China (BoC) denied there has been a link.

It showed that the inspection become taking location: "financial institution of China is offering complete cooperation to the Italian Supervisory Authority," the bank stated in written solutions to questions from Reuters.

The chinese language financial institution said the inspection turned into a ordinary procedure, which takes place every three to 5 years and covers all enterprise and management fields of the bank.

"It isn't always connected to the M2M (Money2Money) problem," the chinese financial institution stated, declining to disclose in addition details given the ongoing nature of the inspection.

The financial institution of Italy, which oversees banks and monetary operators energetic in the u . s . a ., declined to remark because it said supervisory hobby was mystery.

stocks in BoC, the chinese financial institution with the most important international footprint, were up zero.6 percent on Monday, compared with a 1.5 percentage upward thrust inside the benchmark China inventory index .CSI300.

SANCTIONS can be brought on

On-site inspections are a effective tool the Italian primary bank makes use of to shield the integrity of the monetary system and to prevent unlawful practices, consisting of cash-laundering.

If management irregularities and regulatory violations are determined inside the route of off-site evaluations and on-web page inspections, sanction tactics are triggered towards financial institution directors that could result in administrative penalties, especially fines, the significant bank says on its internet site.

inside the request for the indictment, Italian prosecutors allege billions of greenbacks, consisting of proceeds from counterfeiting, exploitation of unlawful hard work and tax evasion, have been despatched to China and cut up into small sums to avoid being detected.

1/2 of the quantity allegedly smuggled, or 2.2 billion euros, became despatched thru BoC's Milan branch, the request says.

financial institution of China has consistently denied any wrongdoing.

between 2008 and 2009, the financial institution of Italy's economic intelligence unit (UIF), which fights money laundering and the financing of terrorism, had identified masses of suspicious transactions from Italy into China that were done via Money2Money, the bank of Italy told Reuters.

some went thru financial institution of China but the financial institution of Italy did not impose sanctions on financial institution of China's administrators on the time.

UIF sent all relevant info to prosecutors in Florence in 2011 and 2012, the financial institution of Italy stated.

In 2011, UIF finished an on-website online inspection at financial institution of China's Italian offices and fined  financial institution personnel "for failure to transmit suspicious transactions," the financial institution of Italy advised Reuters.

bank of China right away appealed and the result of this is nevertheless pending, the chinese bank says.

It stated the penalties do not seek advice from violations of anti-money laundering regulation, but to the bank governance.

The chinese underground economy in Tuscany was delivered into recognition in 2013 while a hearth killed seven workers in their sleep at a workshop in Prato, middle of a network of often-unlawful garment workshops.