The Federal Customs Service filed the lawsuit with the Moscow Arbitration Court in May -- against the backdrop of chilling relations with the United States -- but has taken a long time to present the bank with proper notification.
The case concerns transactions in which Russian banks wired money to BoNY accounts of U.S.-registered firms in circumvention of Russian currency controls in the 1990s. BoNY's failure to prevent the deals, the customs service said, amounted to money laundering.
The bank has dismissed the case as being without merit and vowed to defend itself vigorously.
International law firm Clifford Chance, with headquarters in London, will step into the fray to represent the bank on Monday. The firm declined any comment about the case before its lawyer appears in court Monday, but its participation suggests that the bank has finally been properly served with notification of the charges. In July, the court instructed the Foreign Ministry to serve the bank through diplomatic channels under the provisions of the Hague Convention on Private International Law, which allows legal summonses to be served across international borders.
At the latest session in November, a filing from the bank -- which serves as the registered home of depositary receipts accounting for 12 percent of the value of the Russian stock market -- said it had yet to be served proper notice. No bank representative took part in that session or any of the previous proceedings.
Maxim Smal, the lawyer for the Federal Customs Service, said Friday that the bank had legally recognized the summons, a statement that a bank spokesman would neither confirm nor deny Friday.
Smal said he expected the bank to make filings to the court that he requested during the November session. The court granted his motion and asked BoNY to provide copies of contracts with the firms that received laundered funds from Russia in their accounts with the lender. The court also granted a motion calling on the bank to detail the movements of funds through those accounts. The customs service is also ready to supply additional evidence of wrongdoing by the bank, Smal said.
The illicit money transfers were helped by a rogue employee at the bank, former vice president Lucy Edwards, who has confessed to wrongdoing along with her husband, Peter Berlin. Unaccounted for in Russia, the transfers allowed Russian companies to understate the value of their imports to evade paying full duties, the customs service said.
The bank has maintained that it cannot be held responsible for the failure by Russian companies to pay import duties.
"This suit ... centers on customs duties, and we simply don't owe any," bank spokesman Kevin Heine said in a statement Friday. "Customs duties, if owed, should be paid by the Russian companies and banks that avoided payment when the funds were transferred out of the country in the 1990s."
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