The China Banking Regulatory Commission asked banks totighten risk controls at their foreign branches after some lenders came underscrutiny abroad for alleged cases of money laundering, Reuters reported April5, citing a statement from the regulator.
The regulator said that Chinese banks should ensure thattheir foreign branches make adequate checks on their clients and strengthentheir judgment of risk. It added that lenders should also clarify theresponsibilities of staff in overseas branches and strictly followknow-your-customer norms.
The CBRC also urged banks to strengthen internal control andcompliance in their overseas branches, while improving accountability.
Two of China's major banks have been caught up in cases ofalleged money laundering at their overseas branches. is facinglegal action in acase in Italy for allegedly laundering more than €4.5 billion in illicit fundsto China from Italy through its Milan branch. In addition, six employees ofIndustrial & Commercial Bankof China Ltd.'s Madrid branch, including five directors, werearrested in Februaryas part of a money-laundering probe.