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. Last Updated: 07/27/2016

Delayed Notice Stalls BoNY Trial

A lawyer for the Federal Customs Service on Tuesday accused the Bank of New York of artificially delaying the hearing of a $22.5 billion case that the service brought against the bank.

The bank told the Moscow Arbitration Court, which reopened the case Tuesday, that the Foreign Ministry had not served it a proper notice of the case yet, said the lawyer, Maxim Smal.

In July, the court gave the Foreign Ministry four months to notify the bank that it stood accused of laundering $7.5 billion wired by Russian businesses abroad in the 1990s and that the customs service wants it to pay triple damages under U.S. money-laundering legislation.

The bank stated in court filings from last week that it was aware of the case from several notices it had received from the customs service lawyers by post, Smal said. But the bank, now called Bank of New York Mellon, did not seem to consider these notices sufficient to appear in court, Smal said.

"We consider it an outrageous abuse of their rights," Smal told the judge. "The Americans are trying to artificially delay the trial as long as possible."

Judge Lyudmila Pulova will decide whether to extend the notification time in a hearing Wednesday. She will also rule on two motions put forward by customs service lawyers Tuesday.

One motion called for BoNY to provide copies of contracts with the firms that used accounts with the lender to receive laundered funds from Russia. The request also called for the bank to detail the movements of the money through those accounts.

The second motion asked the court to assign the U.S. and Canada Institute, a body within the Russian Academy of Sciences, the role of determining whether BoNY is liable for damages to Russia under U.S. law.

BoNY spokesman Kevin Heine insisted that the bank had not received an adequate summons, however.

"We continue to believe the suit is without merit and will defend ourselves vigorously," he said.