In first, U.S. appeals court upholds contempt fines against three Chinese banks in North Korean sanctions probe
31 Jul 2019

A U.S. appeals court on Tuesday ordered heavy contempt fines to begin against three large Chinese banks locked in a battle over customer financial records with U.S. prosecutors investigating possible North Korean sanctions violations.

It remained unclear whether the firms, unnamed in court papers but previously reported to be the Bank of Communications, China Merchants Bank and Shanghai Pudong Development Bank, will comply with the U.S. subpoenas, the first upheld by a U.S. appeals court in a criminal sanctions probe involving Chinese banks.

In a unanimous ruling, a U.S. Court of Appeals for the D.C. Circuit panel rejected the banks’ arguments in written pleadings that Chinese banking privacy rules and other laws require that requests for customer records in U.S. criminal inquiries be made through a legal assistance pact between the two countries.

The three-judge panel upheld a lower court’s contempt finding. The initial finding, issued April 10, imposed $50,000-a-day fines on each bank beginning seven business days after an appellate decision, or Aug. 8. The contempt order also allows for one of the banks—which is refusing a request under a provision of the USA Patriot Act—to be cut off from the U.S. banking system if that penalty is ordered by the U.S. attorney general or treasury secretary.

The District Court’s contempt orders against all three Banks appealed from in these causes is hereby affirmed, for the reasons in the accompanying opinion, the appeals court said.

The 44-page opinion by U.S. appellate Judges David S. Tatel, Patricia A. Millett and Cornelia T.L. Pillard, written for the court by Tatel, remains under seal pending redactions proposed by each side.

Lawyers for the three banks did not respond to requests for comment or declined to comment, as did a spokeswoman for the U.S. attorney’s office of the District, whose national security section is handling the case.

By Spencer S. Hsu, The Washington Post, 30 July 2019

Read more at The Washington Post

Photo: Fredrik Rubensson [CC BY-SA 2.0], via Wikimedia Commons

Read more:

Chinese Bank Risks ‘Death Penalty’ in North Korea Money Laundering Case: Report

U.S. judge orders Chinese banks to hand over North Korea records

US and 25 nations accuse North Korea of violating sanctions

Count this content towards your CPD minutes, by signing up to our CPD Wallet


You must be logged in to post a comment.

This site uses Akismet to reduce spam. Learn how your comment data is processed.