Harry Cassin Publisher and Editor

Andy Spalding Senior Editor

Jessica Tillipman Senior Editor

Richard L. Cassin Editor at Large

Elizabeth K. Spahn Editor Emeritus 

Cody Worthington Contributing Editor

Julie DiMauro Contributing Editor

Thomas Fox Contributing Editor

Marc Alain Bohn Contributing Editor

Bill Waite Contributing Editor

Shruti J. Shah Contributing Editor

Russell A. Stamets Contributing Editor

Richard Bistrong Contributing Editor 

Eric Carlson Contributing Editor

Bill Steinman Contributing Editor

FCPA Blog Daily News

« Walmart in Delaware: A tale of red flags ignored | Main | Citigroup pays biggest civil fraud penalty in DOJ deal »

Bank of China probed for offshore money laundering

China's central bank is looking into allegations by a state broadcaster that Bank of China, the country's fourth largest lender, has been laundering money offshore for clients, the New York Times reported Friday.

Beijing maintains tight control over its capital account, limiting foreign currency transfers by individuals to $50,000 a year.

China Central Television aired an undercover investigation program Wednesday that focused on a service offered by the bank called "You Hui Tong."

The service is designed to help Chinese individuals take part in investment programs in other countries by moving cash offshore in amounts exceeding the $50,0000 annual cap.

Unnamed sources said the bank kept the service secret because it knew it was illegal.

State-controlled Xinhua news agency said the People's Bank of China (PBOC), the nation's central bank, is now looking into the matter. "We have noticed the media report about a commercial bank's cross-border renminbi business, and are verifying related facts," a bank spokesperson told Xinhua.

The PBOC statement didn't name the Bank of China specifically, referring instead to "a commercial bank."

Bank of China denied any wrongdoing. It said the You Hui Tong service was part of the government's efforts to open the capital account and increase the international popularity of the yuan.


Julie DiMauro is the executive editor of FCPA Blog and can be reached here.