by BCCI(O) as a branch of the parent bank and not as an independent affiliate or subsidiary.
BCCI(O) granted each of the Bangladesh branches only limited authority to make decisions. If a proposal was beyond a Bangladesh branch's authority, the proposal would be forwarded to the country committee for BCCI(O) in Bangladesh. If the proposal exceeded the authority of the country committee, it would be sent to BCCI(O)'s regional committee in Hong Kong. If the proposal exceeded the authority of the regional committee, it would be sent to BCCI(O)'s Central Bank Committee in London. And, if the proposal exceeded the Central Bank Committee's authority, it would be sent to the BCCI(O) Board of Directors.
Bangladesh Bank (the "Bank") is an instrumentality of the Government of Bangladesh. As such, the Bank regulates foreign exchange within Bangladesh by setting the rate of exchange for foreign currency and by imposing a ceiling on the amount of foreign exchange that a bank in Bangladesh may hold at any given time. This foreign exchange ceiling, which is a monetary amount calculated in either Taka (the currency of Bangladesh) or in dollars and based on the volume of transactions involving foreign exchange, is established by the Bank and communicated to authorized dealers in Bangladesh through circulars and notifications. Once a bank in Bangladesh reaches it foreign exchange ceiling, the authorized dealer is required to transfer the amount in excess of the ceiling to Bangladesh Bank. Authorized dealers who fail to transfer excess foreign currency are subject to penalties under Bangladesh law. The BCCI(O) branches, like other authorized dealers in Bangladesh, were required to submit monthly reports to Bangladesh Bank on their foreign exchange operations.
Pursuant to the Foreign Exchange Control Manual ("FECM"), foreign currencies held by authorized dealers are held "at the disposal of Bangladesh Bank." FECM, Chapter IV, p. 9, P2. The FECM states that the Bank "may give instructions with regard to the disposal of such currencies" and that it "may direct authorized dealers at any time to sell . . . foreign currency held by them to the Bangladesh Bank or to such other person or persons as the Bangladesh Bank may direct." Id. The undisputed evidence of record indicates that whenever Bangladesh Bank takes foreign exchange from an authorized deal, it has paid the dealer the equivalent value in Taka.
Pursuant to past practice as documented in the record, when Bangladesh branches of BCCI(O) transferred dollars to Bangladesh Bank, the BCCI(O) branch would telex American Express Bank or Bank of California, directing them to debit BCCI(O)'s accounts for the amounts to be transferred. American Express Bank or the Bank of California, as applicable, would then transfer the specified dollar amount through an account at Morgan Guaranty Bank to Bangladesh Bank's account at the Federal Reserve. Once Bangladesh Bank received the dollars in its Federal Reserve account, it would then credit BCCI(O)'s account at Bangladesh Bank with the equivalent value of Taka. Such payments were reflected as credits on the Bank's books for BCCI(O)'s accounts, but were not recorded until after the Bank received the foreign exchange.
In addition to transferring dollars to Bangladesh Bank, the BCCI(O) branches in Bangladesh would also buy foreign currency from the Bank. These branches would pay Taka when buying such foreign exchange, and the transfers would be reflected as debits in BCCI(O)'s Taka accounts at Bangladesh Bank.
The petitioner has not identified any evidence of record, pursuant to Local Rule 108(h), indicating that, prior to July 5, 1991, Bangladesh Bank gave any instructions to the BCCI(O) branches directing disposal of the specific U.S. dollars in the forfeited accounts. The parties agree, however, that Bangladesh Bank did not, in general or specifically here, instruct the BCCI(O) branches to sell foreign exchange to it, and there is no evidence that the BCCI(O) branches had exceeded the foreign currency ceilings set by Bangladesh Bank.
After BCCI(O)'s accounts were frozen on July 5, 1991, there were, of course, no instructions for transfers that were honored, and therefore no transfers were made from those accounts to Bangladesh Bank.
This Court previously denied the United States' motion to dismiss, determining that the law of Bangladesh would provide the rule of decision to determine whether the petitioner had a superior or vested legal right, title or interest in the forfeited property. See In re Petition of BCCI(O) Foreign Branches, 833 F. Supp. at 36. The parties were provided with the opportunity to conduct discovery, see Order of Sept. 27, 1993, at 4, and the Court extended discovery once upon a joint request by the parties. See Joint Motion at 4 (filed and approved on Oct. 29, 1993). While the Court offered an evidentiary hearing on the L-Claims, see Order of Sept. 27, 1993, at 2, the parties agreed to attempt resolution first by filing cross-motions for summary judgment. Those motions are now ripe.
BCCI's assets were forfeited pursuant to 18 U.S.C. § 1963,
which sets forth an orderly procedure by which third parties seeking to recover interests in forfeited property may obtain judicial resolution of their claims. It permits any person, other than the defendant, claiming a legal interest in forfeited property to petition the Court for a hearing to adjudicate the validity of that interest. 18 U.S.C. § 1963(l)(2).
Section 1963(l)(6) sets forth the substantive elements that a third party must establish to obtain amendment of an order of forfeiture:
If, after the hearing, the court determines that the petitioner has established by a preponderance of the evidence that--