Italian prosecutors seek to indict Bank of China, 297 people

Updated 21 June 2015
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Italian prosecutors seek to indict Bank of China, 297 people

ROME: Italian prosecutors are seeking to indict 297 people and the Bank of China in connection with a massive money-laundering investigation reported by The Associated Press earlier this month.
The suspects, mostly Chinese migrants living in Italy, include four senior managers of the Chinese state bank’s branch in Milan. According to prosecutors, at least some of the suspects used Mafia-like techniques, including intimidation, the ANSA news agency reported Saturday.
The case highlights the large underground Chinese economy in Europe and the failure of judicial and legal cooperation to keep pace with the economic ties, both legal and illegal, that bind China with the West.
Prosecutors said more than 4.5 billion euros ($5.1 billion) in proceeds from counterfeiting, prostitution, labor exploitation and tax evasion was sent to China in less than four years using a money-transfer service part-owned by Chinese migrants. Nearly half that money was funneled through the Bank of China, which in turn earned over 758,000 euros in commissions, according to Italian investigative documents. Prosecutors said the money had been fractioned into small sums to avoid detection and that the bank’s management and audit staff failed to report suspicious transactions, helping conceal the source and destination of the funds.
Beijing, which is seeking Western help in hunting its own economic fugitives, did not cooperate with the investigation, Italian officials said. Once the money left Italy, it effectively vanished. Italian police were unable to continue their investigation in China, but the AP was able to track some of the missing money to a large government-controlled import-export company that has been accused of repeatedly shipping counterfeit merchandise, some of it to the United States.
In response to AP’s article, China’s state-run Global Times newspaper published a rebuttal, in Chinese, defending the Bank of China and criticizing the AP’s report as “strange.” The article, which was picked up by other Chinese media, quoted a law expert saying that the Bank of China has “no obligation to cooperate with Italian police.”
The Bank of China has denied wrongdoing, and lawyers for the money transfer network’s owners have said their clients are not guilty.
Judicial cooperation has become crucial for Beijing, which is pressuring Western governments to help hunt corrupt officials who have fled overseas. President Xi Jinping’s far-reaching anti-graft drive is a top priority for the ruling Communist Party as it seeks to shore up its legitimacy. Beijing has already punished over 100,000 officials for corruption.
Italy and China signed a memorandum of judicial cooperation in September. So far, the most visible signs of collaboration have been in Beijing’s favor.
In February, Italy extradited a Chinese woman accused of stealing more than 1.4 million yuan ($225,515) during her tenure at a securities company in Heibei province. It was the first time anyone had been extradited from Europe for an economic crime, according to China’s Ministry of Public Security.
Under Italy’s justice system, a judge will consider the prosecutor’s request and either order a trial or throw out the case. The judge’s evaluation could take months before a decision is made.
In Italy, institutions as well as individuals can be ordered to stand trial.
The case involves operations carried out during the period from 2007-2010, ANSA said.
Prosecutors’ offices were closed over the weekend.
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Associated Press writer Erika Kinetz in Shanghai contributed to this report.


OPEC sees strong global oil market, may absorb additional supply

Updated 8 min 29 sec ago
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OPEC sees strong global oil market, may absorb additional supply

VIENNA: Global oil demand is set to stay strong in the second half of 2018, an OPEC technical panel forecast this week, suggesting the market could absorb extra production from the group.
The Organization of the Petroleum Exporting Countries meets on Friday to decide output policy amid calls from major consumers such as the United States and China to cool down oil prices and support the global economy by producing more crude.
OPEC’s de facto leader, Saudi Arabia, and non-member Russia have proposed gradually relaxing production cuts — in place since the start of 2017 — while OPEC members Iran, Iraq, Venezuela and Algeria have opposed such a move.
Three OPEC sources told Reuters a technical panel — the organization’s economic commission — met on Monday to review the market outlook and present it to member countries’ oil ministers later in the week.
“If OPEC and its allies continue to produce at May levels then the market could be in deficit for the next six months,” one of the sources said.
Another source said: “The market outlook in the second half is strong.” Some countries including Algeria, Iran and Venezuela said at the panel meeting that they still opposed an output increase, one of the sources said.
Russia and Saudi Arabia have proposed that OPEC and non-OPEC countries increase production by 1.5 million barrels per day (bpd), Ecuador’s oil minister Carlos Perez said on Monday.
The move would effectively wipe out existing production cuts of 1.8 million bpd, which have helped rebalance the market in the past 18 months and lifted oil prices to nearly $80 per barrel from as low as $27 in 2016.
“There are other countries that do not want to reduce the cuts ... It’s going to be a difficult ... a tough meeting,” Perez said upon arriving in Vienna, where the 14-member OPEC is based.
OPEC’s second- and third-largest producers, Iraq and Iran, have said they would oppose output increases on the grounds that such moves would breach previous agreements to maintain cuts until the year-end.
Both countries would struggle to increase output. Iran faces renewed US sanctions that will impact its oil industry and Iraq has production constraints.
Two OPEC sources told Reuters that even Saudi Arabia’s Gulf allies Kuwait and Oman were against big, immediate increases in output.
One OPEC source said the Saudi proposal of a 1.5-million-bpd increase was “just a tactic” aimed at persuading fellow members to compromise on a smaller rise of around 0.5-0.7 million bpd.
Saudi Arabia and its Gulf allies have the capacity to raise output. Russia has also said that limiting supply for too long could encourage unacceptably high output growth from the United States, which is not part of the production agreement.
On Tuesday, the head of Russia’s second-largest oil firm Lukoil, Vagit Alekperov, said global production cuts should be halved and that Lukoil could restore its oil output levels within two to three months.
Commerzbank commodities analyst Carsten Fritsch said that given big differences in the positions of OPEC members, the Friday meeting was likely to be tough.
“Unanimity is needed for any OPEC decision. This recalls the June 2011 meeting, when OPEC was unable to agree on an increase in production to compensate for the outages ... in Libya,” Fritsch said.
“That meeting ended without any joint declaration. The then Saudi Oil Minister Ali Al-Naimi described it as the worst OPEC meeting of all time.”
Adding to the tensions, Iran and Venezuela continued to insist that OPEC on Friday debate US sanctions against the two countries, but the organization’s secretariat has rejected their requests, according to letters seen by Reuters.