IN THE MATTER OF THE NEW YORK AGENCY &C. OF BANK OF CREDIT AND COMMERCE INT'L
S.A., &C. THE SUPERINTENDENT OF BANKS OF THE STATE OF NEW YORK, &C.,
RESPONDENT, CITIC INDUS. BANK, APPELLANT. (AND ANOTHER PROCEEDING.)
90 N.Y.2d 410, 683 N.E.2d 756, 660 N.Y.S.2d 850 (1997).
June 27, 1997
1 No. 114 (1997 NY Int. 119)
Decided June 27, 1997
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This opinion is uncorrected and subject to revision before publication
in the New York Reports.
John S. Kiernan, for appellant.
Thomas J. Moloney, for respondent.
Federal Reserve Bank of New York; United States of America, amici
curiae.
WESLEY, J.:
On July 5, 1991, as part of his seizure of the New York Agency of Bank
of Commerce & Credit International (BCCI), respondent Superintendent
of Banks seized an account of the BCCI Tokyo branch at BankAmerica
International (BAI) in New York. That account had received a $31
million electronic transfer from Citibank, NY at the direction of
appellant CITIC Industrial Bank (CITIC) on that day. CITIC had ordered
the transfer prior to any seizure of BCCI's assets pursuant to a
"Eurodollar" agreement that CITIC and BCCI Tokyo had reached the
previous day. In this case, CITIC challenges the Superintendent's
authority to seize these funds as assets of a foreign bank located in
New York under Banking Law § 606(4). We conclude that the statute in
question gives the Superintendent sufficiently broad powers to
validate the seizure at issue here.
I.
At the time of its collapse in July 1991, BCCI had two principal
subsidiaries: BCCI S.A., based in Luxembourg, and BCCI Overseas Ltd,
based in the Cayman Islands. Almost from its inception in 1972, the
bank appears to have been involved in widespread money laundering on
behalf of drug lords and international terrorists. In 1988, BCCI was
charged by a Federal Grand Jury with conspiring with cocaine dealers
to launder millions of dollars in drug money. Under a plea agreement
reached two years later, two BCCI branches pleaded guilty to reduced
charges and agreed to pay $14 million in fines. In addition, as early
as the late 1970's, BCCI became involved in efforts to influence
SNIPPETS:
OF BANK OF CREDIT AND COMMERCE INT'L S.A.,
THE SUPERINTENDENT OF BANKS OF THE STATE OF NEW YORK, &C., RESPONDENT, CITIC INDUS.
John S. Kiernan, for appellant.
Federal Reserve Bank of New York; United States of America,
On July 5, 1991, as part of his seizure of the New York Agency of Bank of Commerce & Credit
That account had received a $31 million electronic transfer from Citibank, NY at the
CITIC had ordered the transfer prior to any seizure of BCCI's assets pursuant to a
CITIC challenges the Superintendent's authority to seize these funds as assets of a foreign
Around the same time, the Manhattan District Attorney's office had concluded that BCCI did,
Thus, by early 1991, if not years before, financial officials worldwide were on notice that
It was this report that, on Friday, July 5, 1991, led the Bank of England to close BCCI's
At 3:56 a.m. on July 5th, CITIC entered and approved a funds transfer order into the Citibank
Because it was the end of the July 5th business day in Tokyo, the transaction was credited in
Since this case involves the Superintendent's powers to seize assets of a failed foreign
These provisions are worded very broadly, and give the Superintendent considerable discretion
While this Court has previously held that the Superintendent's powers are limited to those
BCCI's entire international operations were never closed by the act of any single liquidator.
Since the settlement agreement ultimately negotiated between the United States and BCCI
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