Trust Bloomberg Tax for the international news and analysis to navigate the complex tax treaty networks and global business regulations.
The Bank of China paid 20 million euros ($22.4 million) to resolve a tax dispute with Italy over thousands of money transfers the bank orchestrated between Chinese nationals in Italy and their home country, the Italian government said June 21.
Commentators told Bloomberg BNA the agreement could have an impact on the way international financial institutions operating in Italy—such as Barclays PLC, HSBC Holdings PLC, and The Western Union Co.—monitor their international money transfers going forward.
Investigations into the Bank of China date to 2011. The inquiries concern tax avoidance relating to around half of the 4.5 billion euros ($5 billion) that was transferred to China, between 2006 and 2010, for private Chinese citizens mostly living in Tuscany. The money in question was transferred via the Milan offices of the state-owned Chinese lender.
Prosecutors state that the bank allegedly failed to take the proper steps to assure the money had been taxed. As such, prosecutors said the Bank of China ran afoul of the European Union’s Fourth Anti-Money Laundering Directive.
The Bank of China paid the settlement in question in January, and reports of the deal had appeared in unsourced articles in local media since then. It was formally confirmed by tax officials in a background briefing June 22.
Bank of China didn’t comment on the June 22 confirmation, but in response to earlier media reports, bank officials told Bloomberg BNA March 17 that any settlement wasn’t an admission of wrongdoing.
In the background briefing, Italian tax officials told Blomberg BNA the Bank of China case was part of a wider effort to police international money transfers.
According to Francesco Brandi, a former Italian tax official now a law professor at Rome’s La Sapienza University, the Bank of China case should prompt other international banks operating in Italy to review the steps they take to assure money they transfer internationally had been properly taxed.
“The kind of investigation into the Bank of China could happen to any international institution,” Brandi told Bloomberg BNA. “The problem might be much smaller at other institutions, but this would be a time to be proactive and review procedures.”
Barclays, HSBC, and Western Union didn’t immediately respond to requests for comment.
To contact the reporter on this story: Eric J. Lyman in Rome at firstname.lastname@example.org.
To contact the editor responsible for this story: Penny Sukhraj at email@example.com
More information on the investigation is at http://src.bna.com/qcT.
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)