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The Canadian court judgment last year in the fired banker’s wrongful dismissal case described the practice of bypassing China’s controls as challenging, complicated — and something that CIBC “supported.”

Separate Accounts

“If, for example, a CIBC client wanted to send US$150,000 from China to Canada, the money had to come from three accounts belonging to three different account holders in China and be transferred to three separate accounts belonging to three separate account holders in Canada,” the ruling said. “As long as all the appropriate accounts were set up, the money could be moved.”

In April this year, British Columbia’s Court of Appeal overturned the lower court’s ruling in the banker’s favor and ordered a new trial.

Asked about such transfers, CIBC said that it makes money-laundering checks, flags suspicious dealings to regulators and ensures that these “very infrequent” transactions comply with Canadian law. CIBC isn’t legally responsible for ensuring that money transfers comply with Chinese law, a duty that falls on institutions in China, spokesman Kevin Dove said by e-mail.

Money Laundering

Global banks have run afoul of regulators in recent years for failing to do enough to counter money laundering, one of the risks that arises from smurfing. As part of a US$1.9 billion settlement in 2012, HSBC admitted to failing to maintain effective anti-money-laundering programs in both the U.S. and Mexico, and in June of this year the bank said it had agreed to a fine to close an investigation into allegations of money laundering at its Swiss private-banking unit.

“We expect our customers to be in full compliance with all relevant laws and regulations including those related to Chinese currency controls,” Sharon Wilks, a spokeswoman for HSBC’s Canada business, said by e-mail.