An "Asset Search With Letters Rogatory" advises that a domestic court may issue a letter rogatory (a.k.a. a "letter of request" or "legal assistance request"), to try to compel a foreign bank to disclose offshore records.
After issued by the domestic court, the letter rogatory would ordinarily be considered by governmental authorities located offshore where the foreign bank resides.
These offshore authorities might however, deem the letter rogatory unenforceable due to foreign bank secrecy laws.
This is what happened in the Brooklyn federal court case of Linde v. Arab Bank, PLC, Index No. 04-cv-02799, which is summarized here.
In Linde, the victims of terrorists sued Jordan’s leading financial institution Arab Bank, for supposedly aiding HAMAS and similar groups.
Since during pretrial discovery these victims sought some of Arab Bank’s offshore bank account records, Arab Bank filed an October 20, 2006 motion applying for letters rogatory from the Brooklyn federal court.
Arab Bank asserted that if letters rogatory were issued to Jordanian, Lebanese and Palestinian authorities, these authorities might permit Arab Bank to disclose bank account information under exceptions to various bank secrecy laws.
Bank secrecy law exceptions can help facilitate bank disclosure as discussed at "Foreign Bank Secrecy Laws & An Asset Search" and such exceptions exist in Jordan and elsewhere, for cases involving money laundering and / or terrorist financing.
Although the Brooklyn federal court granted Arab Bank’s motion seeking letters rogatory in Jordan, Lebanon and the Palestinian Territories, offshore governmental authorities ultimately refused to enforce the same.
The Jordanian Ministry of Justice for instance, specifically claimed in its correspondence that Arab Bank’s disclosure of bank account information would violate the bank secrecy provisions at Articles 72-75 of the Jordanian Banking Law:
(Click On The Image To Read A Translation)
Notwithstanding the above-mentioned correspondence, the Brooklyn federal court issued a July 12, 2010 order penalizing Arab Bank for its non-disclosure, as reported by "Arab Bank Sanctioned by Judge for Withholding Records in Terrorism Suits".
Lebanon’s Minister of Finance subsequently sent his own letter to the Brooklyn federal court complaining about the supposed "untenable position" Arab Bank is in because of Linde.
The Lebanese minister’s letter stated:
"That decision, which is dated July 12, 2010, violates principles of mutual respect for the laws of sovereign nations and puts a commercial enterprise in a untenable position of having to choose between breaking the laws of our Republic where it operates and being subject to severe sanctions in a courthouse in the United States for doing so."
Copyright 2010 Fred L. Abrams