Bank of New York Mellon settles $22.5bn Russia case

City A.M. Reporter
RUSSIA expects to get costs of at least $14m (&pound;8.5m) in an out-of-court settlement of a $22.5bn lawsuit against Bank of New York Mellon,&nbsp; finance minister Alexei Kudrin said yesterday.<br /><br />The deal should bring to an end Russia&rsquo;s more than two-year quest for compensation from the bank over alleged laundering of $7bn from Russia in the late 1990s through Bank of New York accounts.<br /><br />But the settlement is believed to be far less than the $1bn lawyers were seeking, and the agreed sum is believed to just cover legal costs.<br /><br />The Russian Federal Customs Service in May 2007 accused Bank of New York Mellon, the world&rsquo;s biggest custody bank, of illegally helping to wire more than $7bn out of the country in the 1990s.<br /><br />&ldquo;There is not enough such materials to win such a court case,&rdquo; Kudrin told the Duma lower house of parliament.<br /><br />He added: &ldquo;So currently, as far as I know, the two sides have agreed on the need to make an agreement and payment of some costs that were incurred,&rdquo; <br /><br />Earlier this week, it was said that Bank of New York Mellon would restart trade-finance lending to Russia as a part of the out-of-court settlement, with a $4bn loan.<br /><br />Kudrin said the loan will be of the bank&rsquo;s &ldquo;free will&rdquo; and will &ldquo;show its stance toward Russia in a difficult moment when the economy needs financial resources&rdquo;.<br /><br />The deal could pave the way for the bank to expand in Russia, where it has said it wants to have a larger presence as part of its strategy to grow in developing nations.