NY Bank settles Russian claim
Bank of New York Mellon (BNY Mellon) and Russia’s Federal Customs Service had reached an out-of-court settlement to end a 22,5bn money-laundering lawsuit filed by the Russian agency, Finance Minister Alexei Kudrin said Thursday.
“The two sides recognised the necessity of reaching a settlement as well as payment of costs no less than what was paid to the US government,” Kudrin said in the State Duma in Moscow, the lower house of Russia’s parliament.
The bank’s “guilt isn’t proven”, Kudrin said. BNY Mellon would provide Russia with a loan on advantageous terms “in parallel” to the lawsuit “as an act of goodwill that confirms the bank’s desire to work with Russia and to demonstrate its position in this difficult period”. The loan was unrelated to the case or expenses the government had incurred during the trial.
Citing unnamed sources, Russian business daily Kommersant reported earlier this week that BNY Mellon would provide a 4bn loan to Russian state banks that would come in 400m tranches every six months for five years.
The two-year-long case stems from a decade-old scandal in which a former vice-president of Bank of New York, Lucy Edwards, and her husband, Peter Berlin, were convicted of illegally wiring 7,5bn of Russian money into bank accounts.
The Federal Customs Service sought more than triple that amount in damages, about 22,5bn, under the US Racketeer Influenced and Corrupt Organisations Act. The Russian claim was based on lost tax revenue on those transfers. The bank admitted in 2005 that it failed to report suspicious wire transfers, and paid 14m to settle two criminal probes in the US.
Kudrin said: “There is not enough information to win (Russia’s tax) litigation. “The guilt has not been proven,” the finance minister said. “An out-of-court settlement will be signed.”
source: http://www.businessday.co.za/articles/Content.aspx?id=81714
