Shareholders of Banca Privada d’Andorra Group (BPA) have filed a lawsuit challenging the allegations of the US Treasury’s Financial Crimes Enforcement Network (FinCEN) that the small Andorran bank was involved in money laundering.

The shareholder’s action comes a month after another small lender, Tanzania’s FBME Bank Ltd, was granted an injunction to block a FinCEN final rule that would have barred it officially from the US financial system.

Summary actions

Lawyers acting for BPA in May wrote to the US Treasury asking why it destroyed the Andorran bank by accusing it of money laundering without warning and provided bank officials with no opportunity to address the alleged problems.

This followed the seizure of BPA by its regulators following FinCEN’s allegations, which then prompted HSBC to quickly freeze BPA’s correspondent bank accounts and effectively banish the Andorran bank from the US financial system according to the lawsuit.

The Cierco family, with a controlling stake in BPA, said FinCEN “had no legitimate basis” to accuse it of money laundering according to the lawsuit, which also argues that the bank was punished because FinCEN was frustrated by the slow pace of the Andorran authorities’ efforts to tighten anti-money-laundering regulations.

FBME Bank Similarities

Tanzania’s FBME Bank Ltd, was granted its injunction after a judge ruled that it should have had more access to the evidence FinCEN used to recommend the bank be barred from the US financial system.

The US Treasury has used its powers to allege wrongdoing at ten banks in as many years but has only issued a final rule in three of those cases.

Categories: Trade Based Financial crimes News