Russian Billionaire Loses Lawsuit Against Nordic Banks

This post was originally published on this site
© Reuters. Russian Billionaire Loses Lawsuit Against Nordic Banks© Reuters. Russian Billionaire Loses Lawsuit Against Nordic Banks

(Bloomberg) — A group of Nordic banks sued by a Russian oligarch aren’t required to accept his business, according to what may prove to be a landmark ruling by a court in Finland.

Russian billionaire Boris Rotenberg, an associate of President Vladimir Putin, lost his lawsuit against four Nordic banks and was ordered to pay more than 500,000 euros ($556,000) to cover their legal fees, the Helsinki District Court ruled on Monday.

The court said that forcing the banks to accept business from Rotenberg, who is on the U.S. sanctions list, would have subjected them to significant financial risk which they, by law, are prohibited from taking.

The lawsuit targeted Svenska Handelsbanken AB (ST:) for refusing to accept cross-border deposits from Rotenberg, and Nordea Bank Abp (SIX:), OP Group and Danske Bank A/S (CSE:) for not processing payments to vendors for basics including Rotenberg’s electricity bills.

Jakob Dedenroth Bernhoft, a Copenhagen-based lawyer who specializes in compliance and money laundering issues, said the decision would set an important precedent.

“All the other banks will look at this decision from the court for guidance on what to do in a similar situation,” Bernhoft said by phone before the verdict was delivered.

At stake was the banks’ access to the U.S. dollar market, which is crucial to their ability to operate.

The case comes against a backdrop of money-laundering scandals in the region, with regulators ratcheting up compliance requirements. Banks are also under increasing pressure to identify dodgy customers. According to documents provided to the court, Rotenberg has a current account at Handelsbanken, which the bank has supplied on the recommendation of the Finnish Financial Ombudsman Bureau.

Rotenberg had argued that his status as a dual citizen of both Russia and Finland meant that banks based in Europe must process his transactions. But the court said Rotenberg failed to prove he resides in a European Economic Area country, and thus has no such rights to basic banking services as mandated by law.

The court’s panel of judges ruled unanimously, but the verdict can be appealed. Rotenberg has seven days to express his dissatisfaction with the ruling, the court said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Add Comment