All Heck Breaks Loose After Spanish Banks Block Thousands of Accounts with Chinese Names & Folks Can’t Get to Their Money

The banks claim they’re complying with anti-money laundering regulations. 

By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET.

Spain’s Association of Financial Users (ASUFIN) has announced it will be representing Chinese residents in Spain in their legal struggle against three of the country’s biggest lenders, BBVA, Caixabank and Bankia, which it accuses of contravening Spain’s data protection and consumer protection laws and even the Spanish constitution.

The three banks in question recently froze the accounts of thousands of Chinese residents in Spain for almost two weeks, in accordance — or so the banks claim — with Spain’s money laundering regulations. On Feb 15, after weeks of being locked out of their accounts, feelings finally boiled over and hundreds of Chinese residents took to the streets of Madrid to decry the banks’ actions. It was the biggest spontaneous public protest ever held by Chinese residents in Spain.

The bank at the center of the current scandal — Spain’s second largest lender, BBVA — allegedly froze 5,000 accounts belonging to Chinese nationals out of a total of around 40,000, according to the Chinese Association in Spain (ACHE). Many of those customers were Spanish born children of Chinese parents who say they were not even warned their account was about to be frozen.

“These are normal people, without risky movements or suspicious operations.” says Patricia Suárez, president of ASUFIN. “They are angry and have even protested, something quite unusual among the Chinese.”

Some protesters said their accounts had been blocked for as long as two or three months, but insisted they had done nothing wrong. “We gathered here to demand equality because we are ordinary citizens,” said Yunajie Chen, a Chinese accountant who arrived in Spain as a child and has been a BBVA customer for more than six years. “I work in a consultancy office and I don’t have suspicious transactions.”

ASUFIN’s Suárez says the account freezes are being applied in an arbitrary, blanket fashion, with many innocent citizens being unfairly targeted.

“Their only crime is to be Chinese, to have a different surname. There are people who have had Spanish citizenship for 50 years, yet the bank has still blocked their accounts without any justification. The banks should have to flag up the supposedly suspicious transaction(s). There have been some scandals related to Chinese money, but this is not the case.”

In 2017 China’s biggest bank, the Industrial and Commercial Bank of China (ICBC), was ensnared by a Spanish police probe allegedly laundering hundreds of millions of euros in illegal funds from tax fraud and smuggling by “Chinese criminal organizations.” The Spanish authorities estimate that these groups, with the help of ICBC, siphoned as much as €1.2 billion out of Spain to China between 2009 and 2013.

According to Reuters, the probe reached high into the state-run bank’s European operation and “so alarmed Beijing that China’s top official in Madrid publicly pressured Spanish officials to conclude the inquiry, warning that failure to do so would harm economic relations.” A year later, Spain’s third largest bank, Caixabank, was also charged with helping to launder almost €100 million of funds destined for China and Hong Kong.

Since then, Spain has beefed up its money laundering rules, requiring banks to obtain a series of personal details and background information from clients. Jose Luis Martinez Campuzano, a spokesman for the Spanish banking association AEB, said the rules are being applied regardless of nationality. But since the law’s passage most of the focus appears to have been on Chinese nationals. And many apparently innocent bank customers have been caught in the resulting trawl.

ASUFIN describes this new scandal as one of the biggest cases of mass discrimination since the foundation of Spain’s democracy some 40 years ago:

Although the banks claim that they are complying with anti-money laundering regulations, it is evident that their actions are discriminatory and would contravene even the Spanish Constitution itself. After hearing the testimonies of the people affected, ASUFIN believes that the behavior of these banks violates banking regulations, consumer and data protection laws and even the same regulations on the prevention of money laundering.

BBVA has since apologized for the inconvenience caused but denies deliberately targeting Chinese customers, claiming the accounts were blocked in compliance with Spanish anti-money laundering legislation. However, according to Spain’s Ombudsman, some of the citizens targeted say they didn’t receive any communication requesting documentation or information regarding the source of their income before their account was blocked.

The Chinese government, which itself recently passed a raft of new anti-money laundering legislation, has also waded into the affair urging Spain to adopt “effective measures” to “protect” Chinese citizens from discrimination by lenders.

Since the scandal erupted, some customers have had their accounts unblocked but others haven’t, says Patricia Suarez. And the banks are yet to explain why.

“We are preparing a report for the Ombudsman and will lodge a collective complaint with the Bank of Spain. If the banks are not able to demonstrate why they closed these accounts, we will be facing something really troubling,” she says. If the Bank of Spain does not respond satisfactorily to the complaint, ASUFIN says it will launch a suit for damages for each of the affected users.  By Don Quijones.

French banks are heavily exposed to Italy, and the French government is getting nervous. Read… “New Economic or Financial Crisis” in the Eurozone Could Start in Italy: French Government Frets

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  51 comments for “All Heck Breaks Loose After Spanish Banks Block Thousands of Accounts with Chinese Names & Folks Can’t Get to Their Money

  1. Wolf Richter says:

    I wonder what would happen if banks did this in the US: Wells Fargo in China Town locking out thousands of its customers with Chinese names, after ripping them off for years by setting up fake accounts in their names and charging them for credit insurance on their auto loans they didn’t need or know about….

    And then you just lock them out of their accounts for a few weeks.

    Oh-la-la. We get a little nervous and edgy about these kinds of things here.

    • Dave says:

      Nothing of importance would happen!

      • Debt Wazoo says:


        Money laundering is like asset forfeiture — a license for the state to do whatever it wants whenever it wants. Ordinary citizens don’t seem to care because they think this sort of stuff only happens to “Teh Bad Guyz.”

        In reality it only happens to the upper-middle class. That’s how the upper class keeps the group that threatens them the most under control.

        • Setarcos says:

          @DW, yep, good summary. I call it the 2×4 phenomenon …when the state hits you in the head with a 2×4, you realize what the “fringe” says can actually be quite true. Most people are unwittingly below the state radar and very naive in thinking the state is a virtuous entity.

          Plato explained it well a couple thousand years ago – when the tyrant appears, it is as a protector.

    • MCH says:

      Ha ha, I’d like to see anyone doing that, WFC would get called up to Capitol Hill before the end of the week, and the only question is how fast they get a gigantic fine slapped on them. The entire board would get vote out shortly after the CEO is forced to fall on his sword.

    • raxadian says:

      Will the Chinese government do the same to any Spanish sounding accounts in their banks? Because that would be hilarious.

      Also, aren’t we on the digital age? Do they honesty think people will beloeve it takes two to three weeks to find fraudulent activity in accounts?

      • I don’t trust the Chinese on this, I understand they are forcing US Chinese home buyers to sell their property and repatriate the capital. This smells like more of the same, with an aside about “discrimination” thrown in for good measure.

        • raxadian says:

          That’s because the great Chinese Dragon turned to be made of paper and it looks like is about to rain. The economic miracle of China was based on debt and fraud and the Fed raising rates is making the leaks show everywhere.

          Of course it is also an excuse to repress and have more control.

        • Jack says:

          Ambrose Bierce,

          Can you substantiate that claim, really?

    • Cal says:

      Every bank in Chinatown has a cash counting machine at every single teller’s window. Kids I knew had their parents’ houses bought out from under them by older Chinese guys with suitcases full of twenty dollar bills in the 1960s and 1970s. Chinese surnamed people own about 65 percent of all property, residential and commercial in San Francisco.

      A quick look at the assessor’s rolls will verify that.

      My hypothesis, there is far more money safely stashed in Chinese households in S.F. then there is in any bank. The banks are used only as fronts to launder money.

      • Wolf Richter says:

        Maybe in the 60s the cash counting machines were active. I banked at the Wells Fargo branch on Columbus St before it closed last October. That’s in greater China Town (which goes way across Columbus these days). The branch had lots of Cantonese-speaking customers, and bi-lingual employees. I went there regularly because I kept my data backup at my safe deposit box there. I never once saw a large amount of cash (more than a few hundred bucks) being counted.

      • Jack says:

        Long time ago . One of my Chinese friends told me this:

        When a new family ( Chinese in this case, but you can apply that to many Asian cultures) arrive in the newly adopted country, everyone from their village & acquaintances chipped in for them to buy or rent a place, in some cases even businesses, and the person in question would ultimately start paying back to the collective community usually run by well regarded persons in the community ( Not unlike the MAFIA !! really, without the high interest :-) that might kill the ( goose) , wether this is true or Not I don’t know?!

        One thing is sure though , Asians , and especially Chinese and Indians are quite enterprising folks , and they work hard and they DO SAVE.

  2. kitten lopez says:

    wow.. it has begun. i was wondering when and how a backlash against the Chinese would happen. i was more worried about it here in America, well… because look how we do things.

  3. TruckMan says:

    This is potentially much more dangerous than it may seem. All the Chinese could start pulling their money out, then anyone with a foreign name does, etc. Pretty soon there’s a bank run. Furthermore, each incident like this increases the chances that the next one will trigger a bank run.
    I have personal experience that Spanish banks do dumb things with no explanation, even when one has been assured by management that it won’t happen. The branch and telephone staff are always clueless.
    Arbitrariness breeds panic and drastic action.

    • A Smith says:

      Meanwhile, remember to act surprised when you read that China is now importing less from the rest of the world. Silly capitalists always believe that they can be obnoxious and abuse their customers and that their customers will remain loyal and stay in line to hand over their money.

      What the capitalists haven’t realize, although it should be clear by now, that such hatred and economic warfare (in the forms of ‘sanctions’ and ‘tarriffs’ always simply lead to an economy becoming more self reliant and wanting to have less to do with the people in the rest of the world who obviously hate them and want to hurt them.

      Thus the simultaneous conflicting goals of wanting to hurt the Chinese and stomp on their economy to keep it down and weak, while still wanting to make money from an expanding Chinese economy and large market. It won’t work, of course. Expect more surprising facts that China is buying less from the rest of the world.

      • Mean Chicken says:

        I think you got some of that wrong, it is a fundamental of Asian culture to be self-reliant. It would be wise to expect more of the same at an increasing rate.

  4. Wendy says:

    It is nice to see that there is more than lip sevice to stop laundering. Unfortunately a lot of innocents wind up being punished. Just today I found out that the $200 I had in PayPal from selling stuff on eBay, cannot be unlocked for me to spend unless I provide a bank account or social security number (last four) to verify my identity.

    At times it seems as though to find the needles in the haystack, the banks have found lighting the haystack on fire works well, but not so well for the innocents.

    • MB732 says:

      Innocents make deposits, suspects make withdrawals…

      Regarding paypal agree they are getting annoying with relentless attempts for that bank account number. If I remember, they need it ‘for my own good’ or something.

    • Martin says:

      And yet somehow, the big money launderers at CitiBank and JP Morgan escape all investigation.

  5. Debt Wazoo says:

    This “money laundering” fever has gotten out of control.

    Governments don’t want anybody to actually have money. They want you to have nothing but Identity-linked funds. Because your identity belongs to the state (says so right on most ID cards). They can block it or even revoke it whenever they please.

    Money laundering laws are like having a separate charge not just for committing a crime, but also for “attempting to get away with it”. Pretty ridiculous. Just add the “laundering” penalty to the penalty for the original crime and be done with it.

    Money laundering laws are an excuse for the surveillance state.

    • Sarcastic Fringehead says:

      Money laundering is part of the War on (some) Drugs. Don’t look for sense in it, there isn’t any. Want to see REAL money laundering? Search for ‘pallet benjamins iraq’. Probably afg as well. Hey the US military is all over the globe.

      • Debt Wazoo says:

        No doubt it got its start from the war on disfavored drugs, but at this point it has a life of its own. In the last four years a large chunk of the Western US has decriminalized what had been — by far — the most popular illegal drug. Yet money “laundering” indictments continue to skyrocket faster than ever before.

        If humanity eventually achieves a more humane approach to drug addiction we’ll still be left with this stinker of a law to remind us of our past stupidity — for all eternity.

  6. timbers says:

    Mean while, the U.S. Military admits to $21 Trillion in money laundering that it lost and can’t account for, and I don’t see any prosecutions or anything.

    As the movie line goes “It’s allllllll part of the business.”

    • Dave says:

      Is that true? 21 TRILLION! Somebody is getting super rich!

      • Setarcos says:

        Nobody knows the amounts and nobody will ever know. Meanwhile, we have show trials of corp ceos on capitol hill to keep everyone mesmerized.

  7. GuiriCateto says:

    The Chinese in Spain are generally very discreet and well behaved. Apart from opening more 100pt/Euro shops than are feasible to be legitimate, and similar for restaurants maybe, they don’t get up to much. Probably some of that business is a front for gaining residence, the workers are clearly low status.

    Then there is a general falling out at higher levels, like ICBC or Edificio España, which are hard to put down to any kind of xenophobia, and probably ties into a western drive around to curb Chinese high level influence. That is backed by the US, but not all European countries.

    Then there is the Spanish state cracking down with all kinds of bureaucracy since gfc. That goes from formatting and controlling national registries through to openly flouting European directives that counter heavy rules on global taxation for residents.

    Then there are contradictory and uncoordinated actions by different bureaucracies, national and local, which make life very confusing and uncertain as you don’t know which is going to pull what trick or attitude from the hat.

    Then there is that for some of the Spanish foreigners are still a bit of a blood sport.

    For many of those points it is not just the Chinese that get targeted, though in the above case it seems so.

    Spain is like that, it can be very tolerant and understanding at the same time as being picky, demanding and bullyish. As a foreigner this can really mess up being able to orientate there, a lot if it is close to being just a show, but when it isn’t it isn’t and the only recourse then is to get dragged into whatever local theme is underway… and those can be very drawn out timewise and without much guarantee of any justice worth waiting for. The locals have to put up with a lot of this also if to a lesser extent , if it is any consolation.

    • MC01 says:

      Are those €0.60 shops still around? I have always wondered how they could stay in business, no matter how low their expenses. The one near the Jaca cathedral must have paid a very high rent…
      Around here Chinese nationals mostly own huge stores carrying everything bar food. Quality varies from top of the line (personal hygiene, kitchenware etc) to downright junk (tools, shoes etc) but prices are always very good.

      Regarding the drive to contain China… everybody was rolling out the red carpet to them when they started buying out ailing firms and clinically dead brands. When Foton Lovol bought up another moribund tractor manufacturer local politicians scrambled to shake hands with the Chinese executives, promising the usual bonanza of jobs.
      Same thing when HNA bought the financial black hole known as the Frankfurt-Hahn Airport (which may be featured in a future piece).
      And let’s not forget the funny saga of the Chinese “billionaire” who was supposed to buy Milan AC and flood it with cash to hire the best football players in the world.
      Now things are changing, but it seems to me this has more to do with whatever’s happening in China than with our politics.

      Chinese investors are becoming cautious with their money. Instead of merely throwing it around like confetti they are ready to walk away from a deal if they don’t get what they want. Even large State-controlled firms with very deep pocket are becoming picky. The days of China as a big spender in the M&A market are coming to a close or at least being curbed dramatically.

      • GuiriCateto says:

        Yes, they are still around. On some streets there might be five or seven in five hundred meters, all empty of customers most of the day. Some do well but many just seem like furnishing.

        I know that Chinese investment is quite a fickle affair and I could not say for sure the motives at work. I do know that major investment projects, whether ports or infrastructure acquisition, are met by quite a lot of concern or opposition from outside in strategic terms nowadays – but that could just be pretext to keep business in house. However I think the Chinese have still got their eyes on global expansion, maybe that is partly a route out of having their domestic economy eventually turn on itself.

        Here is an interesting article which explains how the 60 cent shops stay in business – basically since 2008 people are on a budget

        household savings are at minimums again, and more consumer credit is being issued than mortgage loans. Those are 2017 figures, 2018 figures I imagine will be similar when out, maybe slightly more mortgage debt. So apart tourism, you can see where a lot of Spain’s “recovery” is coming from. Number of mortgages and house prices are still very depressed, even the high unemployment rate is rigged downwards by participation figures, type of contract and pay.

    • Cynic says:

      Very true.

      The favourite Spanish ‘blood sport’ is, after all, other Spaniards, and has been since the glorious empire was lost.

      Ah, Los Tercios, La Legion, los malos y los buenos espanoles…….

    • MD says:

      In Eastern Europe, where I’ve spent plenty of time, opening those shops can be a mechanism for…….money laundering…

      SO if you wonder how there can be so many and be legitimate, how on Earth they can pay rent in expensive areas selling one euro goods possibly…well,, you maybe need to join the dots!?

  8. clay says:

    Is this the government of Spain actually concerned with money laundering or did the Spanish banks get a tap on the shoulder from Uncle Xi encouraging them to put a scare in to any Chinese citizens with money stashed outside the (China) Country. If that is the case there was no need to worry about locking up the accounts of the innocent since it only helps in chasing Chinese money back on-shore.

    • MC01 says:

      Clay, these people aren’t billionaires or even millionaires. Just very ordinary people who emigrated to Spain for a reason or another and have little intention to go back to China if not to occasionally visit the family.
      Differently from the upstarts in Vancouver and other crazy real estate markets they are very low profile and don’t like drawing attention to themselves.

      There’s the possibility Spanish banks, through either some twisted masterpiece of lateral thinking or goading from local authorities, thought these bank accounts were somehow linked to criminal gangs or, the horror!, the shadow banking system used by many Chinese communities, such as that run from Milan by the famous (and apparently immortal) Papa Zheng.
      Either way I smell more lost lawsuits and embarrassment for BBVA, Bankia and the rest.

      As an aside, am I the only one tempted to open a bank account in the name of Sum Tin Wong to see what happens?

      • MD says:

        LOL how naiive are you? It’s quite charming in a way!

        You haven’t been around much have you!?

        Do you think that if your purpose is to launder money, you would emigrate to your target country then buy a massive house, big cars, throw great parties and generally draw a massive amount of attention to yourself!?

        C’mon – get smart!

        • GuiriCateto says:

          In Spain they are not like that at all…generally family run living frugally, I think the figures were 40 000 resident. Now the true owners might well be laundering money as well as selling residence opportunity etc., but even if so I think it is much more finance crime and capital controls than some complex hardline mafia. Sure the Spanish might not like even that and not like the cheaper competition, so they might make life difficult for them just to make a point.

        • GuiriCateto says:

          I looked up the figures for Chinese resident in Spain and it is quite a bit higher, almost 200 000. Of those just under 100 000 are registered as part of the social security system (e.g. employed somehow). The figure has tripled to the above over five or so years. Still remains that most are low status workers.

          They allege that even though they handed in all nescessary paperwork their accounts remained blocked for weeks or months, that other nationalities had their accounts freed immediately. Some say that they were told by a bank that they don’t open accounts for Chinese. I know from experience the Spanish will block accounts without question if they are following directives, even if it is just to present paperwork they already have over again, but they usually give good warning and are fast to free any account.

      • The bank’s number one priority is to protect themselves. This laundered money is serous because taxes need to be paid to the Chinese government on “ALL” this money. This puts the banks on the hook everywhere when the government demands taxes to be paid on all the money.

  9. Puddin says:

    Has anybody heard the baseball stadium in Tampa will no longer accept cash

  10. jango euro says:

    That’s one of the reasons I own physical Gold.
    Banks are the epicenter of fraud AND can behave with total impunity.
    And this case is particularly egregious: no due process, not even the hint of suspiscion and your funds are gone.
    Good luck for those running a business.
    Banks are scum. Bankers are worse.

  11. Howard Fritz says:

    What I want to know is how does this affect the bottom line.

    • Bankers says:

      I think it is just illustrative of how fragmented the country is becoming at different levels, but in itself is not a big deal. I say fragmented meaning in terms of authority, not necessarily that the public are more banded towards the newer outer groups of the political spectrum.

      So here is what is not much talked of yet in the press outside of Spain, aside from mentioning dates and eventually results of the day. Apart Brexit, the following is likely to be a shake up:


      April 28 -national elections
      May 26 – regional elections, municipal elections, european elections.

      The latest national elections were called after the budget was rejected by left coalition partners, the national government has been unstable and swinging between sides in short periods these last few years.

      Now I have seen maps that predict the vote at municipal level to go to the left for the whole country almost, by simple majority, not nescessarily final seat.

      For regional elections the picture is mixed, but the always left stronghold of Andalucia recently went to the right in early elections (and is not up for vote). It was proving ground for a further right party called Vox, who as part of the right coalition there are hard onto disassembling what they can of the previous left administration (particularly via bringing to light the social service admin incompetence). You also have cases like of teens being expelled from class for wearing Vox motto on bracelet and getting bullied for it, or election stands getting attacked – in short there is some tension around , socially and at admin level.

      With the above background you have national elections looking to go to a right coalition including Vox, but polls at present are not clearly decided.

      Then there are European elections that might also bring in a strong showing for the right.

      There is a Catalan trial of independence leaders underway, Puigdemont in exile saying he should have declared independence instead of taking the process to EU. Cataluña favours the left in terms of achieving independence.

      At EU level you have a budget pact between France and Germany now that openly underscores the CEP findings of single currency having detrimentally affected national management, and looking to impose methods not of encouraging convergence as to now, but going further by looking to stop divergence from occuring again using budgetary tools, a.k.a. towards centralised state, but which might be torpedoed by Holland et al.

      Even for Brexit… a Vox leader unfurled a large Spanish flag on the rock, there are formal challenges on Spanish incursions, and legal ones over Gibraltar planning to build “in Spanish waters “.

      This about the Chinese started before new elections were announced and so is unlikely part of any strategy for that, but it is one more event that demonstrates how any particular authority might work with a mind apart from the whole, and possibly in conflict to the interests of others.

      I forgot the King in this, who is losing some support, especially his wife, and the royal family as a whole due to corruption cases. Though a near majority are unshakeable in their support, so is there a large minority that would prefer a republic.

      Quite possibly all the above adds up to nothing much, but the bottom line there is still one of change, confrontations and uncertainty, or at the very least further governmental stagnation. Add in a possible recession and it starts to look quite chaotic.

      • Howard Fritz says:

        Can Spain stoop significantly lower with employment prospects for the youth as abysmal as it is, and so much in terms of structural economic issues?

        • Bankers says:

          It depends on what point in history you compare it to, that is a generational characteristic where opinion and expectations are now much more diverse between older and younger. This is playing out in many countries, the “You don’t know how good you have it” vs. “This is impossible and not what we were led to believe” , sometimes it is the inverse of that also, and sometimes both at the same time but about different themes.

          The Spanish communicate with each other a lot, are by default geared to be cynical towards government, are opportunist but keep quite a strong set of social values into that between themselves and are able to extreme kindness . They often aim high without expecting to achieve their goals. So it is sad to watch how confused their circumstance is nowadays, but without feeling overly sorry for them as it is also product of their own choices and attitudes, and most would not have that either.

          I don’t think Spain can stoop lower, or go through a new crisis, without the nation taking back the reigns in reply. That is already happening to an extent now. Among the reasons for that are that the new social spending, i.e. increasing government debt, that is helping smooth out a balance, is unsustainable. For now it all simmers , and might be able to continue this way for quite a while longer depending, but people are finding and taking new positions that are ready to tackle a circumstance that many people feel is due eventually. The choices there are nation or near outright political integration into EU (or whatever it isn’t). The socialists are EU orientated, the traditional right so far are for being intermediary with EU, the new centrists are a civic hybrid between those two, the further right are for nationalism but without rejecting EU outright, the further left often reject EU on certain grounds but in practice don’t.

          Spain is still a beautiful country, one of the better places to live, but it is also under a lot of pressure.

      • HMG says:


        You have covered an awful lot of ground with your post.

        Add Italy and Brexit to the mix and a few planes shot down over Kashmir (with or without Imran’s prior knowledge) and we have all the ingredients for a bit international financial turmoil as we go through 2019.

      • Cynic says:

        In other words, the same old Deep Spain, eternally clawing at its intestines…..

  12. RagnarD says:

    Check out the Netflix documentary “Dirty Money” to see how serious US regulators are about eliminating big time money laundering.

    The documentary shows the regulators had HSBC dead to rights for laundering hundreds of millions of cartel drug money. But orders came down from “above” to let the big fish go. If thats the case, how serious are we in this “war on drugs”?

    And also, given the extent to which drug money has corrupted Mexican society, you have to question how much it has corrupted US society.
    Would drug cartels want a wall or not? I’d say, not. And if I were Trump, I’d paint anyone anti Wall as being potentially under the influence of cartel drug money. That will get some cackles up. :)

  13. R Davis says:

    Haven’t these banks just committed suicide ??

    Isn’t it a better practice to investigate – discretely from inside first – rather than to go berserk with a razor ??

Comments are closed.