as beneficiary, BCCI (Dubai) was the beneficiary bank. Id. §§ 4-A-103(c); see 6B Hawkland, Uniform Commercial Code Series § 4A-103:03, at 33 (1993 & Cum. Supp. 1996) (beneficiary bank "must be the final bank in the chain of banks receiving the payment orders forming the funds transfers"). See generally Fry, Basic Concepts in Article 4A: Scope and Definitions, 45 Bus.Law. 1401, 1413 (1990). CBK's transaction is no different: the payment order expressly identifies Fatema Taher as the beneficiary; therefore, BCCI (Dubai), albeit not so intended, was the beneficiary bank.
Acceptance within the meaning of Article 4-A is the key, because title to funds in a wire transfer passes upon acceptance of a payment order. See, e.g., In re Petition of Pacific Bank 956 F. Supp. at 11; Shawmut Worcester County Bank v. First American Bank & Trust, 731 F. Supp. 57, 60 (D.Mass. 1990). Under Article 4-A, a funds transfer is complete when the beneficiary's bank accepts the payment order. N.Y.U.C.C. § 4-A-104(1). Such acceptance occurs, subject to certain conditions not relevant here, at the earliest of (1) when the bank pays the beneficiary or notifies the beneficiary of receipt of the order or that the account has been credited; (2) when the bank receives payment of the entire amount of the transfers; or (3) the beginning of the bank's next funds-transfer business day. Id. § 4-A-209(2); see Ballen & Diana, Duties of the Beneficiary Bank, 45 Bus.Law. 1467, 1468 (1990). Because an accepted transfer cannot be revoked without the consent of the beneficiary, Middle East Banking Co. v. State Street Bank Int'l, 821 F.2d 897, 901-02 (2nd Cir. 1987), and the beneficiary bank incurs an obligation to the beneficiary upon acceptance of the funds, id. § 4-A-404, the ownership interest in those funds must pass from the originator upon completion of the funds transfer. See Shawmut Worcester County Bank, 731 F. Supp. at 60.
However, there are important exceptions to the rules regarding acceptance under Section 4-A-209. First, "acceptance does not occur under paragraph (b) or (c) of subsection (2) [of § 4-A-209] if the beneficiary of the payment order does not have an account with the receiving bank." N.Y.U.C.C. § 4-A-209(3). Second, "if, in a payment order received by the beneficiary's bank, the name, bank account number, or other identification of the beneficiary refers to a nonexistent . . . account, no person has rights as a beneficiary of the order and acceptance cannot occur." Id. § 4-A-207(1).
Ahmed alleges, and the Court assumes true, that he did not have an account with BCCI (Dubai), which was identified as the beneficiary's bank in the payment order.
While CBK's L-Claim does not state that Fatema Taher did not have an account with BCCI (Dubai), such an inference is a reasonable one at this stage of the proceeding. (Of course, if BCCI (Dubai) held such an account, it would have acquired title to the funds upon receiving payment from BNY.) Accepting arguendo that the petitioners (beneficiaries in these transactions) had no accounts with BCCI (Dubai), the exceptions to the general rule control. Even if BCCI (Dubai) received the payments from correspondent BNY, absent accounts of the beneficiaries, the payments could not have been accepted by the beneficiary bank. N.Y.U.C.C. §§ 4-A-209(3), 4-A-207(1). Since they could not have been accepted, title did not convey to BCCI, and the petitioners have identified legal interests sufficient to survive the government's motions to dismiss.
The authority upon which the government relies is inapposite. While In re Mistaken Wire Transfers does hold that improper acquisition of title to funds can be effected through the errors in the petitioners' payment orders, those cases involved situations where BCCI lawfully (albeit improperly) acquired title under Article 4-A. The wire transfers in those cases were completed, and the funds were accepted pursuant to Section 4-A-209. Here, the facts appear to be substantially different, and the exceptions to Section 4-A-209(2) command a different result.
At this stage, the facts do not appear to be materially different than those involving the petition of UBAF Bank Limited, in which the Court amended the Order of Forfeiture, granting the petitioner's claim based on the authority of Section 4-A-207(1). See United States v. BCCI Holdings (Luxembourg), S.A. (In re Petition of UBAF Bank Limited), slip. op. at 15-17 (D.D.C., Aug. 22, 1995).
Accordingly, it is hereby
ORDERED that the United States' motion to dismiss is denied; and it is
FURTHER ORDERED that the United States shall file its Answers to these petitions on or before September 15, 1997 ; and the parties shall meet and confer, filing their Joint Statements under Local Rule 206 on or before October 6, 1997.
IT IS SO ORDERED.
August 26, 1997.
JOYCE HENS GREEN
United States District Judge