Bank of New York Mellon settles $22.5bn Russia case
RUSSIA expects to get costs of at least $14m (£8.5m) in an out-of-court settlement of a $22.5bn lawsuit against Bank of New York Mellon, finance minister Alexei Kudrin said yesterday.
The deal should bring to an end Russia’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.
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.
The Russian Federal Customs Service in May 2007 accused Bank of New York Mellon, the world’s biggest custody bank, of illegally helping to wire more than $7bn out of the country in the 1990s.
“There is not enough such materials to win such a court case,” Kudrin told the Duma lower house of parliament.
He added: “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,”
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.
Kudrin said the loan will be of the bank’s “free will” and will “show its stance toward Russia in a difficult moment when the economy needs financial resources”.
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.