Motion For Partial Summary Judgment and Request For Expedited Consideration - 2015.11.12

Case 1:15-cv-01641-JEB Document 15 Filed 11/12/15 Page 1 of 3
UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA
RAMON CIERCO, HIGINI CIERCO,

SUCCESSORS DHIGINI CIERCO
GARCIA, S.A., and CIERCO MARTINEZ
2 2003, S.L. in each Plaintiffs Personal
Capacity and Derivatively on Behalf of
Themselves and All Others Similarly
Situated,
Plaintiffs,
Civil No. 15-cv-1641(JEB)

Oral Argument Requested
v.
JACOB LEW, in his Official Capacity as
Secretary of the Treasury, et al.,
Defendants.
MOTION FOR PARTIAL SUMMARY JUDGMENT

AND REQUEST FOR EXPEDITED CONSIDERATION
Plaintiffs Ramon Cierco, Higini Cierco, Successors DHigini Cierco Garcia, S.A., and
Cierco Martinez 2 2003, S.L., by and through undersigned counsel, hereby move for partial
summary judgment pursuant to Federal Rule of Civil Procedure 56 as to Counts 1, 2, 4, and 5 of
the Verified Complaint. Plaintiffs request that the Court consider this motion on an expedited
basis in light of the circumstances and the urgent nature of the relief sought.
In support, plaintiffs submit a memorandum of points and authorities, a statement of
undisputed material facts pursuant to LCvR 7(h), and the declarations of plaintiff Ramon Cierco
and undersigned counsel, Eric L. Lewis. Plaintiffs also submit herewith a proposed order.
Plaintiffs hereby move that the Notice of Finding (NOF) described in the Federal
Register as Notice of Finding that Banca Privada dAndorra is a Financial Institution of Money
Laundering Concern, 80 Fed. Reg. 13464 (Mar. 13, 2015), and the Notice of Proposed Rule
Making (NPRM) described in the Federal Register as Special Measure against Banca Privada
dAndorra as a Financial Institution of Primary Money Laundering Concern, 80 Fed. Reg.
13304 (Mar. 13, 2015), be vacated because the actions of defendants in issuing the NOF and
NPRM were unlawful under the Administrative Procedures Act (APA), 5 U.S.C. 706,
because defendant Financial Crimes Enforcement Network (FinCEN) failed to satisfy the
statutory requirements of the APA, 5 U.S.C. 553, and because FinCEN otherwise exceeded its
delegated authority in issuing the NOF and the NPRM.
Plaintiffs further move for certain related relief, including that FinCEN be ordered
immediately to provide notice to all U.S. financial institutions through publication in the Federal
Register that the NOF and NPRM have been vacated; that FinCEN immediately provide notice to
all U.S. banks that previously held correspondent banking accounts with Banca Privada
dAndorra (BPA), advising them that the NOF and NPRM against BPA have been vacated and
that these banks are free to resume correspondent banking relationships with BPA without
regulatory consequence; that FinCEN immediately provide notice to BPAs regulator and
administrator in Andorra that the NOF and NPRM have been vacated and that FinCEN
withdraws its prior encouragement to take action against, expropriate, or liquidate BPA in
response to the vacated NOF and NPRM; and that FinCEN promptly report to the Court, with
copy to plaintiffs, the results of its compliance with the foregoing.
Respectfully submitted,
By: /s/ Eric L. Lewis
Eric L. Lewis (DC Bar #394643)
eric.lewis@lewisbaach.com
A. Katherine Toomey (DC Bar #426658)
katherine.toomey@lewisbaach.com
LEWIS BAACH PLLC
1899 Pennsylvania Avenue, NW, Suite 600
Washington, DC 20006
(202) 833-8900
Aaron T. Wolfson (pro hac vice)
aaron.wolfson@lewisbaach.com
LEWIS BAACH PLLC
405 Lexington Avenue, 62nd Floor
New York, NY 10174
(212) 826-7001
Dated:
November 12, 2015
Attorneys for Plaintiffs
Case 1:15-cv-01641-JEB Document 15-1 Filed 11/12/15 Page 1 of 38


SUCCESSORS
DHIGINI
CIERCO
Situated,
Plaintiffs,

v.
Defendants.
MEMORANDUM OF LAW IN SUPPORT OF

MOTION FOR PARTIAL SUMMARY JUDGMENT AND
REQUEST FOR EXPEDITED CONSIDERATION

LEWIS BAACH PLLC
(202) 833-8900
LEWIS BAACH PLLC
New York, NY 10174
(212) 826-7001
Dated: November 12, 2015
TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES .......................................................................................................... ii
PRELIMINARY STATEMENT .....................................................................................................1
FACTUAL BACKGROUND ..........................................................................................................2
STATUTORY BACKGROUND ....................................................................................................5
STATEMENT OF FACTS ..............................................................................................................6
ARGUMENT .................................................................................................................................13
I.
Standard of Review ............................................................................................................13
II.
The NOF and NPRM Must Be Vacated Because of FinCENs Admitted Failure to
Consider the Statutorily Mandated Factors........................................................................15
III.
IV.
A.
The NOF and NPRM Must be Vacated because FinCEN Failed to

Consider BPAs Legitimate Business ....................................................................15
B.
FinCEN Has Repeatedly Ignored Its Obligation to Consider a Target

Banks Legitimate Business ...................................................................................19
FinCEN Improperly Imposes Section 311 Sanctions Through Procedures

Calculated to Preclude Meaningful and Timely Challenge ...............................................21
A.
FinCEN Eschewed Application of an Objective Standard in Reaching its

Finding that BPA is of Primary Money Laundering Concern............................21
B.
FinCEN Intended for its Proposed Sanction to be Immediately

Implemented ..........................................................................................................25
C.
FinCEN Frustrates any Meaningful Notice and Comment Process by

Withholding Disclosure of the Administrative Record on which its
Finding and Proposed Sanction are Purportedly Based .........................................27
The Court Should Grant Urgent Relief to Avoid Ongoing Damage Due to the
Continuing Injurious Effects of FinCENs Improper Agency Action ...............................30
CONCLUSION ..............................................................................................................................34
TABLE OF AUTHORITIES
Page(s)
CASES
Abbott Labs. v. Gardner,
387 U.S. 136 (1967) ................................................................................................................. 31
AFL-CIO v. Chao,
496 F. Supp. 2d 76 (D.D.C. 2007) ........................................................................................... 13
Air Transp. Assn v. FAA,
169 F.3d 1 (D.C. Cir. 1999) ..................................................................................................... 28
Am. Medical Assn v. Reno,
57 F.3d 1129 (D.C. Cir. 1995) ................................................................................................. 27
Am. Wildlands v. Norton,
193 F. Supp. 2d 244 (D.D.C. 2002) ......................................................................................... 18
Anderson v. Liberty Lobby, Inc.,
477 U.S. 242 (1986) ................................................................................................................. 13
Appalachian Voices v. McCarthy,
989 F. Supp. 2d 30 (D.D.C. 2013) ........................................................................................... 16
Brown v. Plata,
563 U.S. 493 (2011) ................................................................................................................. 23
Comcast Corp. v. FCC,
579 F.3d 1 (D.C. Cir. 2009) ..................................................................................................... 18
Dart v. United States,
848 F.2d 217 (D.C. Cir. 1988) ................................................................................................... 3
FBME Bank Ltd. v. Lew,
No. 15-CV-01270(CRC), 2015 WL 5081209 (D.D.C. Aug. 27, 2015)................................... 27
Home Box Office, Inc. v. FCC,
567 F.2d 9 (D.C. Cir. 1977) ..................................................................................................... 27
Massachusetts v. E.P.A.,
549 U.S. 497 (2007) ................................................................................................................. 15
Motor Vehicle Mfrs. Assn v. State Farm Mut. Auto. Ins. Co.,
463 U.S. 29 (1983) ............................................................................................................ 14, 18
Picur v. Kerry,
No. 14-CV-1492(KBJ), 2015 WL 5325709 (D.D.C. Sept. 11, 2015) ......................... 13, 14, 18
Pub. Citizen Health Research Grp. v. Commr, Food & Drug Admin.,
740 F.2d 21 (D.C. Cir. 1984) ............................................................................................. 31, 32
Pub. Citizen v. Fed. Motor Carrier Safety Admin.,
374 F.3d 1209 (D.C. Cir. 2004) ............................................................................................... 16
ii
Quantum Entmt v. U.S. Dept. of Interior,

597 F. Supp. 2d 146 (D.D.C. 2009) ......................................................................................... 18
Ralls Corp. v. Comm. on Foreign Inv. in the U.S.,
758 F.3d 296 (D.C. Cir. 2014) ................................................................................................. 29
Role Models Am. Inc. v. White,
317 F.3d 327 (D.C. Cir. 2003) ................................................................................................. 33
U.S. Postal Serv. v. Postal Regulatory Commn,
785 F.3d 740 (D.C. Cir. 2015) ................................................................................................. 23
STATUTORY AUTHORITIES
5 U.S.C. 551 et seq ................................................................................................................. 3, 13
5 U.S.C. 553 ......................................................................................................................... 10, 27
5 U.S.C. 704 ............................................................................................................................... 31
5 U.S.C. 706 ......................................................................................................................... 14, 22
31 U.S.C. 5318A ................................................................................................................. passim
Pub. L. No. 107-56, 115 Stat. 272 (2001) ....................................................................................... 5
RULES AND REGULATIONS
69 Fed. Reg. 28,098 ...................................................................................................................... 21
69 Fed. Reg. 51,973 ...................................................................................................................... 21
69 Fed. Reg. 51,979 ...................................................................................................................... 21
70 Fed. Reg. 21,362 ...................................................................................................................... 21
70 Fed. Reg. 21,369 ...................................................................................................................... 21
70 Fed. Reg. 55,214 ...................................................................................................................... 20
76 Fed. Reg. 9,403 ........................................................................................................................ 20
77 Fed. Reg. 31,434 ...................................................................................................................... 20
77 Fed. Reg. 59,747 ...................................................................................................................... 25
80 Fed. Reg. 60,575 ...................................................................................................................... 25
Fed. R. Civ. P. 56(a) ..................................................................................................................... 13
LEGISLATIVE MATERIALS
H.R. Rep. No. 107-250 (2001)...................................................................................................... 24
iii
PRELIMINARY STATEMENT
Plaintiffs motion for partial summary judgment should be granted, and should be granted
expeditiously, for two principal reasons:
First, the illegality of defendants conduct in this case is clear and can be determined on
undisputed facts. Defendants are responsible for administering provisions in the USA PATRIOT
Act aimed at protecting the United States from foreign money laundering and terror finance. 1
This authority has been delegated to a unit within the Treasury Department known as The
Financial Crimes Enforcement Network (FinCEN). In this case, FinCEN made a finding,
based on undisclosed internal criteria, that Banca Privada dAndorra S.A. (BPA), a small bank
located in the tiny European principality of Andorra, is an institution of primary money
laundering concern, and that it should be shut down. Despite an unequivocal statutory mandate
to do so, FinCEN has conceded that it failed to consider the impact of its actions on BPAs
legitimate business. Although FinCEN acknowledged that BPA provided ordinary banking
services, it claimed that the extent of that business was difficult to assess, which, it turns out, is
the usual explanation it offers when it declines to consider this statutory requirement. But its
too hard is not a legally cognizable excuse for an agencys failure to perform a statutory duty.
Second, summary judgment is necessary now.
Immediately upon the issuance of
FinCENs unilateral and untested finding, BPA was denied access to the U.S. banking system
and, as encouraged by FinCEN in its notice, seized by its regulators. In the absence of urgent
intervention by this Court, BPA will be utterly lost to plaintiffs.
Accordingly, plaintiffs
respectfully request expedited consideration of this motion. Should the Court grant plaintiffs
Section 311 of the USA PATRIOT Act amended the Bank Secrecy Act to add these anti-money
laundering provisions, codified at 31 U.S.C. 5318A.
request to hold a hearing, plaintiffs further request that the hearing be scheduled at the first
available date.
FACTUAL BACKGROUND
There is an unmistakable Alice in Wonderland quality to the instant administrative action.
In Alice, during the trial of the Knave for theft of the Queens tarts, the Queen proclaimed the
order of business: Sentence first verdict afterwards. That sums up FinCENs actions here.
On March 10th of this year, FinCEN issued a Notice of Finding (NOF) that BPA was
of primary money laundering concern and a Notice of Proposed Rulemaking (NPRM) that it
intended to impose the fifth special measure available under Section 311 of the USA
PATRIOT Act, the statutes harshest sanction, which would ban all U.S. banks from acting as
BPAs correspondent banks or handling its U.S. dollar transactions. 2 Although the NOF was an
untested, ex parte finding by FinCEN, and the NPRM based upon it purported to be only a
proposed action, U.S. banks immediately treated it as a final adjudication, closing BPAs
accounts as soon as the Notices were issued. The NPRM also expressly encourage[d] other
countries to take similar action that is, to prohibit their own domestic banks from doing
business, directly or indirectly, with BPA.
Thus, within days, FinCENs proposed sentence was well on its way to being fully
executed. U.S. banks refused to process BPAs dollar transactions, regulators in Andorra seized
BPA and shut its doors, and regulators in Spain and Panama did the same to subsidiaries in those
countries. BPA was afforded no opportunity whatsoever to defend itself against FinCENs
finding before its proposed sentence was carried out. As FinCEN expected and intended, its
BPAs U.S. correspondent banks previously maintained accounts that permitted BPA to receive
deposits and make payments and to handle other financial transactions denominated in U.S.
dollars.
proposal to preclude BPA from accessing the U.S. financial system left BPA all but dead,
unable to operate and quickly dismantled. Sentence first, indeed.
FinCEN imposed its sanction against BPA in manifest disregard of Section 311s
procedural protections. In fact, the U.S. governments own statements reveal that BPA was not
even the real object of FinCENs concern but was simply a pawn to be sacrificed by FinCEN in
order to send a message to the Andorran government expressing U.S. displeasure with certain
aspects of that countrys banking regulations. FinCENs unexplained choice to impose the fifth
special measure the harshest weapon in its arsenal did not represent a reasoned exercise of
discretion based on the specific facts of this case but instead followed FinCENs uniform
practice. According to FinCENs Director, FinCEN always imposes the fifth special measure,
whenever it acts pursuant to Section 311. SOF Ex. 15 27. 3
Plaintiffs, who are majority shareholders and non-executive directors of BPA, move for
partial summary judgment on four counts of their Complaint: Counts 1 and 2 seek relief under
the Administrative Procedure Act, 5 U.S.C. 551 et seq., and Counts 4 and 5 seek relief under
common law principles because FinCENs actions exceeded its delegated authority and facially
violated the statute that FinCEN purports to implement. 4 See Dart v. United States, 848 F.2d
217, 222 (D.C. Cir. 1988). As set forth below, this Court should enter summary judgment in this
case because the undisputed facts show that FinCENs actions were arbitrary and capricious and
in violation of Section 311. Specifically, FinCEN:
References to exhibits attached to the Statement of Undisputed Material Facts (SOF) are
described as SOF Ex. References to other facts that provide important context but are not
strictly material to the grounds for relief are cited in the text of this memorandum and its
footnotes.
Count 3 of the complaint seeks relief under the Constitutions Due Process Clause, but
resolution of that claim is unnecessary if relief is granted on the counts at issue here.
(i)
Violated the express statutory requirements of Section 311, first, by failing to

consider the extent of BPAs legitimate business in connection with its
determination of whether BPA is an institution of primary money laundering
concern and, second, by ignoring the adverse impact on the banks legitimate
business in determining which, if any, special measure to impose.
(ii)
Improperly declared BPA to be an institution of primary money laundering

concern, thereby causing its closure, despite the fact that FinCEN has no
implementing regulation defining primary money laundering concern and has
acknowledged that it internally applies a definition of that term that is entirely
subjective and, indeed, does not even require evidence of actual money
laundering, just a concern about money laundering;
(iii)
Issued the NOF and NPRM expecting and intending that U.S. banks would
immediately close BPAs correspondent bank accounts and expressly encouraging
foreign regulators to take similar action, notwithstanding that the NPRM was
supposed to be a proposal and not a final agency action;
(iv)
Violated its obligation to disclose the non-classified information on which its ex

parte NOF and NPRM were based, and thereby deprived plaintiffs of any
meaningful opportunity to challenge this agency action; and
(v)
Violated its obligation to explain the basis for its selection of the fifth special
measure rather than one of the statutes four lesser measures, thereby depriving
BPA of any meaningful opportunity to argue that a lesser measure should have
been imposed.
FinCENs conduct here was an illegal exercise of power, and it was not an aberration. It
is FinCENs standard operating procedure in cases in which it seeks to send a message to a
recalcitrant foreign country to force it to adopt anti-money laundering controls that FinCEN has
recommended. In such cases, FinCEN makes an example of a relatively unimportant bank in
order to bring the foreign country to heel. FinCEN issued its NOF and NPRM here knowing and
intending that they would result in BPAs immediate closure and would cow the Andorran
government. Mission accomplished. A closed bank has no resources with which to challenge
FinCEN, and an intimidated foreign government has no incentive to do so. And so, FinCEN
repeatedly acts with impunity, confident that it can impose draconian sanctions without regard to
the requirements of Section 311 or fear of reversal. The Court should put a stop to this arrogant
and illegal modus operandi.
STATUTORY BACKGROUND
Following the September 11, 2001 terrorist attacks, Congress enacted a broad set of
provisions aimed at combatting global terrorism. USA PATRIOT Act, Pub. L. No. 107-56, 115
Stat. 272 (2001). As part of this effort, Section 311 of the Act authorizes the Secretary of the
Treasury to take certain actions to protect the U.S. financial institutions and the financial system
as a whole from systemic money laundering with focus on international organized crime,
terrorism and weapons trafficking. 31 U.S.C. 5318A(a)(1). The statute directs that the
Secretary shall consider the following in determining whether an institution is of primary
money laundering concern:
(i) the extent to which such financial institutions . . . are used to facilitate or
promote money laundering in or through [a particular] jurisdiction, including any
money laundering activity by organized criminal groups, international terrorists,
or entities involved in the proliferation of weapons of mass destruction or
missiles;
(ii) the extent to which such institutions . . . are used for legitimate business
purposes in the jurisdiction; and
(iii) the extent to which [the proposed special measure] is sufficient to ensure,
with respect to . . . institutions operating in the jurisdiction, that the purposes of
this subchapter continue to be fulfilled, and to guard against international money
laundering and other financial crimes.
31 U.S.C. 5318A(c)(4)(B).
Upon a finding that an institution poses a primary threat of money laundering, the
Secretary is authorized to select any of five special measures imposing obligations on U.S.
financial institutions in their dealings with the foreign bank. The first four measures require
more extensive record keeping by the U.S. banks tracking the foreign banks transactions. The
fifth special measure is reserved for the most severe cases. It imposes conditions upon or
5
completely prohibits U.S. banks from opening or maintaining a correspondent bank account in
favor of the foreign bank, thereby eliminating the foreign banks access to the U.S. financial
system and preventing it from engaging in U.S. dollar-based transactions.
In selecting which, if any, of the five special measures to apply to a foreign financial
institution, the statute further directs that the Secretary shall consider the following factors:
(i) whether similar action has been or is being taken by other nations or
multilateral groups;
(ii) whether the imposition of any particular special measure would create a
significant competitive disadvantage, including any undue cost or burden
associated with compliance, for financial institutions organized or licensed in the
United States;
(iii) the extent to which the action or the timing of the action would have a
significant adverse systemic impact on the international payment, clearance, and
settlement system, or on legitimate business activities involving the particular
jurisdiction, institution, class of transactions, or type of account; and
(iv) the effect of the action on United States national security and foreign policy.
31 U.S.C. 5318A(a)(4)(B).
The Secretary has delegated his authority under Section 311 to the Director of FinCEN.
It is FinCENs exercise of this authority against BPA that is the subject of this action.
STATEMENT OF FACTS
BPA is an international commercial bank organized under the laws of Andorra, with its
principal place of business in Andorra. SOF 1; SOF Ex. 1 3-5; Ex. 2 at 13464. In 2011, BPA
acquired Banco Madrid with the consent of the Spanish regulatory authorities. SOF 23; SOF
Ex. 13. Until March 10, 2015, BPA engaged in regular banking business in Andorra and,
through subsidiaries, in Spain and Panama. SOF Ex. 1 8; Ex. 2 at 13464. BPA offered a
variety of typical financial products and services, including corporate and personal banking,
loans, funds management, and custody services. SOF Ex. 1 9; Ex. 2 at 13466.
On March 10, 2015, FinCEN issued the two notices relevant here: the NOF reflecting
its finding that BPA is a Financial Institution of Primary Money Laundering Concern and
the NPRM announcing FinCENs intent to impose the most severe version of the fifth special
measure on BPA, effectively banning BPA from the U.S. financial market. SOF 10-11; SOF
Exs. 2 and 5. The NOF and NPRM were issued without notice to BPA, and BPA had no
opportunity to participate in or otherwise offer input into the investigative process leading to
them. SOF 12; SOF Ex. 1 7. Moreover, the NOF and NPRM both reflect that, in reaching its
decision in this case, FinCEN did not consider the extent of BPAs legitimate business because it
deemed that factor to be too difficult to assess. SOF 10-11; SOF Ex. 2 at 13466; Ex. 5 at
13305.
Plaintiffs Ramon Cierco and Higini Cierco (the Ciercos) are citizens and residents of
Andorra. SOF 2; SOF Ex. 1 1-2. Together with another family member, the Ciercos own,
directly or indirectly, through plaintiffs Successor dHigini Cierco Garcia S.A. and Cierco
Martinez 2 2003, S.L., approximately 75% of the shares in BPA. 5 SOF 2-4; SOF Ex. 1 3-5.
Prior to the events giving rise to this action, the Ciercos served as non-executive Directors of
BPA and, on a rotating basis, as the Chairman of the Board of Directors of BPA. SOF 5; SOF
Ex. 1 6.
Before the issuance of the NOF and NPRM, the Ciercos were the majority
shareholders in a small but prosperous bank. After the NOF and NPRM were issued, BPA was
taken from the Ciercos by the Andorran regulators, and it is now being stripped of its assets and
sold. SOF 34; SOF Ex. 21.
Both Successors DHigini Cierco Garcia, S.A. and Cierco Martinez 2 2003, S.L, of which the
Ciercos are the sole shareholders, are organized under Andorran law. SOF 2-4.
U.S. and Andorran Discussions Leading Up to the Seizure of BPA

In the months prior to the seizure of BPA, the governments of the United States and
Andorra were in discussions concerning anti-money laundering (AML) controls that the U.S.
thought Andorra should put in place. On or about August 26, 2014, the U.S. Embassy in Spain
sent a Verbal Note to the Andorran government citing certain AML recommendations that the
U.S. government wanted the Andorran government to implement. SOF 8; SOF Ex. 3.
On September 22, 2014, the Andorran government responded to the Verbal Note,
informing the U.S. Embassy in Spain that, although in general terms Andorra was committed to
the fight against money laundering and countering terrorist financing, it declined to adopt the
specific cash transaction reporting measures that the U.S. had proposed. SOF 9; SOF Ex. 4.
The United States was dissatisfied with the Andorran response to its requests, and its
dissatisfaction led directly to the issuance of the NOF and NPRM in this case. In April 2015, at
a conference in Spain, Anton Smith, Counselor for Economic Affairs at the U.S. Embassy in
Madrid said, With respect to Andorra, last year we signaled our discomfort with an official
report directing the authorities to some failures . . . in the system there. I will not say that they
did not realize it, but they did not react with the appropriate vigor that we were expecting, and
we had to use the hammer. The U.S. government denied that the statement had been made, but
it was captured on videotape and posted on YouTube. 6
The Issuance of the NOF and NPRM and the Resulting Seizure of BPA
The issuance of the NOF and NPRM had an immediate impact on BPA. As FinCEN
knew they would, BPAs correspondent banks in the U.S. and abroad immediately closed BPAs
accounts. SOF 28, SOF Ex. 1 12; Ex. 16. In the NPRM, FinCEN expressly encourage[d]
6
See Els Americans Van Actuar lany Passat Per La Falta de Fluidesa de les Autoritats
Andorranes, YouTube (uploaded May 27, 2015), https://youtu.be/jXli0F9UgqQ.
other countries to take similar action that is to prohibit their own domestic banks from doing
business with BPA, directly or indirectly. SOF Ex. 5 at 13305. As a result, on March 11, 2015,
the Andorran regulator, the Institut Nacional Andorra de Finances (INAF), initiated a
preventive intervention of the bank, seizing it, removing its Board of Directors, and replacing
them with government appointees. SOF Ex. 18. INAF made clear that its action was not
motivated by a . . . lack of liquidity nor solvency of BPA or its Group but was caused by the
action of the FinCEN. SOF 31; SOF Ex. 18. 7
As a result of FinCENs action and the financial turmoil it caused, regulators in Spain
seized BPAs subsidiary, Banco Madrid. SOF 35. Administrators of that bank have filed for
bankruptcy. SOF 35; SOF Ex. 23. On March 10, 2015, regulators in Panama seized BPAs
subsidiary BPA Panama, where it remains under government control. SOF 36; SOF Ex. 24.
On April 2, 2015, Andorra passed new legislation authorizing the expropriation of BPA
as a result of FinCENs actions. SOF 32; SOF Ex. 16. On April 27, 2015, the Andorran
government removed BPAs Board of Directors and placed the bank under the control of the
newly created Agency for the Restructuring of Financial Entities (AREB). SOF 32; SOF Ex.
19. AREB is charged with administering a resolution process designed to dismantle BPA,
transfer its good assets to another institution, and sell that institution to new shareholders. SOF
34; SOF Ex. 21. That process is well underway.
Vall Banc, the bank to which BPAs assets are to be transferred, has been incorporated
by AREB, which is also its sole shareholder. SOF Ex. 20. As of October 29, 2015, AREB
announced the start of the application process for potential buyers to bid on Vall Banc. SOF Ex.
See also, Press Release, INAF, Intervention of Banca Privada dAndorra (Mar. 16, 2015),
available at https://www.inaf.ad/files/Press_Release_INAF_2015-03-16.pdf.
9
22. The transfer of BPAs remaining assets to Vall Banc and Vall Bancs sale are to be
completed by AREB expeditiously. SOF 34; SOF Exs. 20, 21 and 22.
Process Followed Under the NOF and NPRM
FinCEN reached its finding that BPA is a foreign bank of primary money laundering
concern, as announced in the NOF, based on an internal investigation in which BPA did not
participate. SOF 12; SOF Ex. 1 7. When, as here, the imposition of the fifth special measure,
the statutes harshest sanction, is proposed, Section 311 requires FinCEN to conduct a
rulemaking process. 31 U.S.C. 5318A(a)(2)(C); 5 U.S.C. 553. Rulemaking, of course,
requires the publication of factual findings and a proposed rule so that the target bank and other
interested parties can challenge the agencys proposed action before it becomes effective. 5
U.S.C. 553(c).
BPAs administrator, AREB, filed no comment in response to the NOF or the NPRM
and has not objected to FinCENs actions. SOF 38; SOF Ex. 1 13. By letter of May 6, 2015,
counsel for plaintiffs, the Ciercos and their family corporations, as BPAs controlling
shareholders, filed a comment objecting to the NOF and the NPRMs proposed sanction. SOF
13; SOF Ex. 6. The May 6 letter reported that, since 2003, KPMG and Deloitte, two of the
largest and most respected accounting firms in the world, were given unfettered access to BPAs
files and personnel, annually audited BPAs AML compliance program and found the bank in
compliance. SOF Ex. 6 at 7. Plaintiffs included with their comment reports from KPMG and
Deloitte. SOF Ex. 6 at 8 nn.9, 12.
At a meeting with FinCEN personnel on July 15, 2015, plaintiffs counsel offered to
provide FinCEN with a letter dated March 24, 2014 written more than a year before FinCEN
issued the NOF addressed to BPAs Andorran regulator. SOF 14; SOF Ex. 7 3. In that
10
letter, BPA identified and self-reported each of the specific instances of money laundering
FinCEN later relied on in its NOF and described the actions it had taken to correct them. Id.;
SOF Ex. 9. 8 On July 22, at FinCENs request, plaintiffs counsel reiterated the offer in writing
and, in addition, asked FinCEN a number of questions concerning FinCENs dealings with the
Andorran government and other matters bearing on the NOF. 9 SOF 15; SOF Ex. 7 3; Ex. 8.
On September 4, 2015, plaintiffs counsel again wrote to FinCEN. SOF 15; SOF Ex. 7
3; Ex. 9. Having received no response to his previous letters, plaintiffs counsel provided
FinCEN with a copy of the March 24, 2014 letter and also set forth further information
challenging the bases for the NOF and NPRM. SOF Ex. 7 3; Ex. 9. The September 4 letter
asked FinCEN to intercede with the Andorran authorities to prevent a rush to judgment with its
expropriation of BPA and to include all stakeholders in the process. SOF Ex. 9. The letter also
asked FinCEN (i) to disclose all non-classified information that it had considered in issuing the
NOF so plaintiffs could provide further comment, and (ii) to advise why the fifth special
measure was imposed and why lesser sanctions were not selected. Id.
FinCEN has responded to none of plaintiffs letters or requests. SOF Ex. 7 3. Its only
response was a September 16, 2015 email stating that [i]f a specific response to your letters is
appropriate, you will receive it by a separate communication. SOF Ex. 10. Other than a letter
8
The NOF identifies three instances of alleged money laundering at BPA: (i) a matter in the
period 2011 to 2013 said to involve a third-party intermediary assisting Russian criminal
organizations engaged in corruption; (ii) a matter in the same period said to involve a
Venezuelan third-party in another corruption scheme; and (iii) a matter in the period 2011 to
2012 said to involve a Chinese third-party intermediary in a transnational scheme involving
human trafficking. SOF Ex. 2 at 13465. BPAs March 24, 2014 letter addressed each of these
matters. SOF Ex. 9.
9
Plaintiffs also made a request for relevant information under the Freedom of Information Act
(FOIA) on August 7, 2015. SOF Ex. 11. FinCEN responded that FOIA requests are handled
on a first come, first served basis and, due to backlog, plaintiffs request would be addressed
no earlier than December. SOF Ex. 12.
11
stating that FinCEN would not address plaintiffs FOIA request until December 15, SOF Ex. 12,
no other response has been received. SOF Ex. 7 3.
BPAs Legitimate Business
Section 311 directs FinCEN in two separate sections, in assessing whether a foreign bank
is of primary money laundering concern, to consider not only the extent of the banks money
laundering activity but also the extent of the banks legitimate business. FinCEN failed to do so,
because, it asserted, the legitimate business of BPA was difficult to assess. SOF 10-11;
SOF Ex. 2 at 13466; Ex. 5 at 13305. There is little question that BPA had extensive legitimate
business. BPA had branches in Andorra, and subsidiaries in Spain and Panama. SOF Ex. 1 8.
The NOF itself acknowledges that BPA provided a wide variety of typical banking services to its
clients. SOF Ex. 2 at 13466. When BPA acquired Banco Madrid in 2011 and made it a BPA
subsidiary, the Bank of Spain, a major central bank within the European Union and one that
operates under stringent AML standards, investigated and agreed not to oppose the purchase.
SOF 23; SOF Ex. 13. As recently as 2014, the British publication Global Banking & Finance
Review named BPAs Spanish subsidiary, Banco Madrid, the Best Wealth Manager and Best
Asset Manager in Spain. 10
On March 10, 2015, the date of the NOF and NPRM, BPAs financial statements for
2011, 2012, and 2013 were available on its website, along with extensive information concerning
BPAs corporate structure, data concerning its business, and a description of its policy of
corporate responsibility. SOF 25; SOF Ex. 1 11. Banco Madrid had a website with similar
information. 11 In addition, information concerning BPAs legitimate business was available
10
Global Banking Finance Review Awards - 2014, http://www.globalbankingandfinance.com/

global-banking-finance-review-awards-2014/ (last visited Nov. 10, 2015).
11
Banco Madrid, http://www.bancomadrid.com/ (last visited Nov. 10, 2015).
12
from:
(i) BPAs regulators in Andorra, Spain, and Panama; (ii) its banking and financial
counter-parties and correspondents, including those in the United States; (iii) its AML auditors
Deloitte and KPMG; (iv) its directors, shareholders, senior management, and employees; and (v)
its customers. SOF 24; SOF Ex. 1 10. Yet, notwithstanding this wealth of information
available to FinCEN, the agency found it too difficult to consider BPAs legitimate business.
SOF Ex. 2 at 13466; Ex. 5 at 13305.
ARGUMENT
I.
Standard of Review
This motion seeks summary judgment in respect of four counts of the complaint. Counts
1 and 2 arise under the Administrative Procedure Act (APA), 5 U.S.C. 551 et seq.; Counts 4
and 5 arise under federal decisional law. With respect to all claims, under Federal Rule of Civil
Procedure 56(a), summary judgment is appropriately granted if the movant shows that there is
no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of
law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986).
Plaintiffs motion as to Counts 4 and 5 of the complaint are governed by this
straightforward and familiar standard. Summary judgment is also the appropriate procedural
mechanism for resolving challenges to final agency actions under the Administrative Procedure
Act. Picur v. Kerry, No. 14-CV-1492(KBJ), 2015 WL 5325709, *4 (D.D.C. Sept. 11, 2015).
The application of Rule 56 to an APA claim, however, is more constrained, since the facts
bearing on the agencys decision are limited to the administrative record. See AFL-CIO v. Chao,
13
496 F. Supp. 2d 76, 81 (D.D.C. 2007). Here, the administrative record indeed, the NOF on its
face requires summary judgment in plaintiffs favor. 12
The APA empowers a court to hold unlawful and set aside an agency action that is: (a)
arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (b)
contrary to constitutional right, power, privilege, or immunity; (c) in excess of statutory
jurisdiction, authority, or limitations, or short of statutory right; or (d) without observance of the
procedure required by law. 5 U.S.C. 706(2). While the reviewing court may not substitute its
judgment for that of the agency, it must ensure that the agency examined the relevant data and
articulated a satisfactory explanation for its action including a rational connection between the
facts found and the choice made. Picur, 2015 WL 5325709, at *5 (citing Motor Vehicle Mfrs.
Assn v. State Farm Mut. Auto Ins. Co., 463 U.S. 29, 43 (1983)). As part of this assessment, the
court must determine whether the agencys decision was based on a consideration of the
relevant factors and whether there has been a clear error of judgment. Id. An agencys action
will be deemed arbitrary and capricious under the APA if the agency has relied on factors which
Congress has not intended it to consider, entirely failed to consider an important aspect of the
problem, offered an explanation for its decision that runs counter to the evidence before the
agency, or is so implausible that it could not be ascribed to a difference in view or the product of
agency expertise. Id. FinCENs action is invalid and should be set aside under each of the
706(2) standards set forth above.
12
FinCEN has not provided plaintiffs with access to the full administrative record, has failed to
respond to plaintiffs request for an opportunity to review the materials on which the NOF and
NPRM are based and has deferred plaintiffs FOIA request for this information. But summary
judgment is nonetheless appropriate in this case because the NOF and the NPRM make clear that,
whatever that record may be, FinCEN concedes that it failed to evaluate the extent of BPAs
legitimate business or the impact on that business of any of the potential special measures that
could be imposed.
14
II.
The NOF and NPRM Must Be Vacated Because of FinCENs Admitted

Failure to Consider the Statutorily Mandated Factors.
The Court need look no further than FinCENs own admitted failure to consider the
statutes mandatory factors for determining whether BPA can properly be labeled as of primary
money laundering concern and, if so, which special measure should be imposed. Summary
judgment is warranted on this basis alone. As the Supreme Court noted recently in
Massachusetts v. E.P.A., the fact that an agency is permitted to exercise judgment does not
give it a roving license to ignore the statutory text. 549 U.S. 497, 532 (2007). Yet, that is
precisely what FinCEN has done here.
A.
The NOF and NPRM Must be Vacated because FinCEN Failed to

Consider BPAs Legitimate Business.
The statute requires FinCEN to consider BPAs legitimate business at two separate points
in its decision-making.
First, in deciding whether a bank is of primary money laundering concern, the statute
requires FinCEN to consider (i) the extent to which [such bank is] used to facilitate or promote
money laundering and (ii) the extent to which [such bank is] used for legitimate business
purposes. 31 U.S.C. 5318A(c)(2)(B)(i) and (ii). 13 This plain language requires that these
two factors be quantified and evaluated in some tangible manner the question is the extent to
which and not merely whether.
Second, in deciding which, if any, of the special measures to impose, FinCEN is required
to consider the extent to which . . . the action or the timing of the action would have a
significant adverse systemic impact on [the banks] legitimate business activities. 31 U.S.C.
5318A (a)(4)(B)(iii). Consideration of this factor plainly required FinCEN to consider actual
13
A third factor listed but not pertinent here is whether the sanction being considered is
sufficient to ensure that the statutory purposes will be fulfilled. 31 U.S.C. 5318A(c)(2)(B)(iii).
15
evidence of BPAs legitimate banking business, the extent of its involvement in the Andorran
financial sector, and the effect of the proposed special measure on its depositors, employees, and
owners.
There can be no question that these provisions are mandatory. See Appalachian Voices v.
McCarthy, 989 F. Supp. 2d 30, 54 (D.D.C. 2013) (Use of the word shall in a statute generally
creates a mandatory duty). FinCENs failure to consider a mandatory factor is an arbitrary and
capricious agency action. Pub. Citizen v. Fed. Motor Carrier Safety Admin., 374 F.3d 1209 (D.C.
Cir. 2004). And this failure is undisputed. As it admitted in its NOF and NPRM, FinCEN did
not evaluate the extent of BPAs legitimate business activity, weigh it against any evidence of
BPAs complicity in money laundering, or consider the adverse impact of the chosen special
measure on BPAs legitimate business. 14 FinCENs NOF vaguely describes BPAs legitimate
business in three sentences:
It is difficult to assess on the information available the extent to which BPA is
used for legitimate business purposes. BPA provides services in private banking,
personal banking, and corporate banking. These services include typical bank
products such as savings accounts, corporate accounts, credit cards, and financing.
SOF Ex. 2 at 13466. The same sentences are repeated in the NPRM. SOF Ex. 5 at 13305. 15
Notwithstanding that FinCEN found it too difficult to assess BPAs legitimate business,
FinCEN simply pronounced by fiat that any impact on the legitimate business activities of BPA
is outweighed by the need to protect the US financial system. SOF Ex. 5 at 13305. In essence,
14
FinCEN also made no genuine effort to quantify BPAs purported money laundering activities,
and for this reason, too, it could not weigh them against BPAs legitimate business operations
and thereby determine on any objective basis whether BPA could reasonably be deemed to be a
primary money laundering concern. Infra at pp. 21-25.
15
In the NOF and NPRM FinCEN concluded that BPA is at risk of abuse by money launderers,
but FinCEN made no effort to quantify or to evaluate in any objective way the amount of BPAs
legitimate business, the amount of money laundering, or the nature and extent of the perceived
risk.
16
FinCEN placed the purported money laundering incidents on one side of its scales, and nothing
on the other (because the legitimate business was too difficult to assess), and then concluded
that something outweighs nothing. This is the very definition of an arbitrary and capricious
decision, and, moreover, it fails to provide the reasonable grounds required by the statute. Nor
can it rationally justify the imposition of Section 311s harshest sanction, as opposed to a lesser
sanction.
In any event, FinCENs stated position, that it is incapable of assessing the legitimate
business of BPA on the available information, is untenable. FinCEN is the Financial
Investigation Unit of the U.S. government. According to its website, it is a highly skilled and
resourced agency that pursues its investigative mission by receiving and maintaining financial
transactions data, analyzing and disseminating that data for law enforcement purposes, and
building global cooperation with counterpart organizations in other countries and with
international bodies. 16 Given its expertise in the investigation of complex financial transactions,
FinCEN apparently had little difficulty unearthing information concerning purported money
laundering at BPA (perhaps because BPA had itself identified and reported the information), but
it disclaims having the investigative tools that would permit it to consider far more accessible
and public information concerning BPAs legitimate business. Such information was available
on BPAs website, which permitted anyone, including FinCEN, to access substantial data about
BPAs operations, including, inter alia, BPAs financial statements for 2011-2013; its growth,
liquidity ratio, and risk-weighted capital ratio; its governance and structure; descriptions of its
subsidiaries and branch offices; and details concerning the banking services it provided. In
addition to this publicly available information, FinCEN could certainly have requested more
16
See What We Do, FinCEN, https://www.fincen.gov/about_fincen/wwd/ (last visited Nov. 10,

2015).
17
detailed, quantitative data on BPAs legitimate business from BPA itself, including its Board of
Directors, its principal shareholders or its AML auditors. FinCEN, moreover, had access to
foreign regulators who collect and evaluate massive quantities of information about BPA and its
operating subsidiaries in Andorra, Spain, and Panama. FinCEN appears to have ignored these
sources and, in any event, failed to engage in the honest balancing exercise that the statute
requires or to explain how the various factors weigh in that analysis.
But even if information concerning BPAs legitimate business were difficult to obtain,
which it was not, there is nothing in the statute that allows FinCEN to decide unilaterally not to
consider this factor. See Comcast Corp. v. FCC, 579 F.3d 1 (D.C. Cir. 2009). As the Court of
Appeals observed in that case, the fact that an assessment is difficult, does not excuse an
agencys failure to undertake it, particularly where it is clearly relevant to the issue being
decided and required by law. Id. at 7.
Under the APA, an agency action will be set aside as arbitrary and capricious when, in
reaching its decision, the agency fails to consider a relevant factor. See, e.g., Picur, 2015 WL
5325709, at *5 (citing Motor Vehicle Mfrs. Assn, 463 U.S. at 43); Quantum Entmt v. U.S. Dept.
of Interior, 597 F. Supp. 2d 146, 153-54 (D.D.C. 2009) (agencys decision was incomplete in
violation of the prohibition against arbitrary or capricious agency decisions); Am. Wildlands v.
Norton, 193 F. Supp. 2d 244, 257-58 (D.D.C. 2002) (agencys decision remanded where decision
did not reflect a reasoned assessment of the statutory listing factors). By FinCENs own
admission, as evident on the face of the NOF itself, it declined to weigh this required factor.
Accordingly, this Court should vacate the NOF and NPRM because they are the result of
arbitrary and capricious agency action.
18
B.
FinCEN Has Repeatedly Ignored Its Obligation to Consider a Target

Banks Legitimate Business.
FinCENs willful disregard of the statutes mandate is not unique to this case. FinCEN
has ignored its obligation to consider a banks legitimate business on numerous occasions when
it imposed the fifth special measure. In each case, it has tried to excuse its deliberate disregard
of the statutory requirements using virtually identical language, stating that such business is
difficult to assess, evaluate, or determine. Indeed, it appears to be a strategic policy gambit to
close banks without meeting the statutory requirements.
For example, in 2005, FinCEN issued a Notice of Finding against Banco Delta Asia
SARL (BDA), which found that BDA had participated in money laundering in Macau. That
NOF bears remarkable similarities to the NOF in the instant case. 17 Like the instant case, that
NOF strongly suggests that FinCENs real target was not BDA itself but the jurisdiction in which
BDA operated in that case Macau which had failed to impose controls on money laundering.
In the BDA NOF, FinCEN pointed to Macaus lack of adequate controls and regulatory
oversight of the banking and gaming industries (many of which are associated with organized
criminal activity) that has led to an environment that can be exploited by money launderers. In
the BDA case, as here, FinCEN ultimately aimed its most powerful weapon, the fifth special
measure, at one of the smallest banks in that country. Notwithstanding the banks small size, in
the BDA case, as in the instant case, FinCEN complained that [i]t is difficult to determine the
extent to which [BDA] is used for legitimate purposes. And notwithstanding this purported
incapacity, like in the instant case, FinCEN then concluded, without further analysis or
17
Banco Delta Asias litigation is ongoing. See Banco Delta Asia, S.A.R.L. v. Fin. Crimes
Enforcement Network, No. 1:13-CV-333(BAH) (D.D.C. filed Mar. 14, 2013).
19
evidentiary support, that any legitimate use of Banco Delta Asia is significantly outweighed by
its use to promote or facilitate money laundering and other financial crimes. 18
In 2011, this pattern repeated itself in the NOF issued against Lebanese Canadian Bank
SAL (LCB). Again, FinCEN complained about a lack of controls in the banks primary
jurisdiction Lebanon. And, again, FinCEN acknowledged that the bank conducted legitimate
business, indeed, acknowledging that it is likely that a high volume of [LCBs transactions
through U.S. correspondent banks] is legitimate. Nevertheless, and without making any effort
to otherwise quantify or weigh LCBs legitimate business, FinCEN summarily concluded that
any legitimate use of LCB is significantly outweighed by the apparent use of LCB to promote
or facilitate money laundering. 19
In 2012, FinCEN took aim at the nation of Belarus, which was the subject of EU and US
sanctions. It identified a small and relatively insignificant bank in that country to send a message
to Belarus. This time it targeted JSC CredexBank (Credex), which was the 22nd largest of 33
banks in Belarus. FinCEN again recited its mantra that it was difficult to assess the extent to
which Credex is engaged in legitimate business and, without any further data or analysis,
concluded, thus, any legitimate use of Credex is significantly outweighed by the apparent use of
Credex to facilitate or promote money laundering and other financial crimes. 20
18
Finding that Banco Delta Asia SARL is a Financial Institution of Primary Money Laundering
Concern, 70 Fed. Reg. 55,214, 55,216 (Sept. 20, 2005).
19
Finding that Lebanese Canadian Bank SAL is a Financial Institution of Primary Money
Laundering Concern, 76 Fed. Reg. 9,403, 9,406 (Feb. 17, 2011).
20
Finding that JSC CredexBank Is a Financial Institution of Primary Money Laundering

Concern, 77 Fed. Reg. 31,434, 33,147 (May 25, 2012).
20
This pattern 21 strongly indicates that FinCENs failure to consider the legitimate business
of BPA reflects a calculated decision by FinCEN simply to ignore an inconvenient factor that
might weigh against the imposition of a sanction that FinCEN wanted to impose. Such conduct
is not just arbitrary and capricious; it constitutes a deliberate violation of statutory authority a
substitution by the agency of its own standards, priorities, and judgment for those of Congress.
III.
FinCEN Improperly Imposes Section 311 Sanctions Through Procedures

Calculated to Preclude Meaningful and Timely Challenge.
FinCENs admitted, and apparently deliberate, failure to evaluate the factors Section 311
requires appears part of a larger strategy by FinCEN to act by fiat and evade meaningful and
timely challenge to its actions.
A.
FinCEN Eschewed Application of an Objective Standard in Reaching

its Finding that BPA is of Primary Money Laundering Concern.
FinCEN treats the statutory language primary money laundering concern as an

unlimited mandate to impose sanctions based solely on its subjective appraisal of the money
laundering risk that a potential target may represent, unconstrained by objective, measurable
criteria. Notwithstanding that the term is the centerpiece of Section 311, Congress included no
21
These are not the only examples. FinCEN reported that it found it difficult to evaluate the
legitimate business of virtually every other bank on which it imposed the fifth special measure
during the past 11 years, including: Commercial Bank of Syria, 69 Fed. Reg. 28,098, 28,100
(May 18, 2004) (the extent of the Banks legitimate activities is ultimately difficult to
quantify), First Merchant Bank OSH Ltd, 69 Fed. Reg. 51,979, 51,982 (Aug. 24, 2004)
(legitimate activities ultimately difficult to quantify), First Merchant Finance Ltd, id.,
(legitimate activities ultimately difficult to quantify), First Merchant International Inc., id.,
(legitimate activities ultimately difficult to quantify), First Merchant Trust Ltd., id., (legitimate
activities ultimately difficult to quantify), FMB Finance Ltd., id., (legitimate activities
ultimately difficult to quantify), Infobank (renamed PJSC Trustbank), 69 Fed. Reg. 51,973,
51,975 (Aug. 24, 2004), (difficult to determine the extent of banks legitimate business),
Multibanka, 70 Fed. Reg. 21,362, 21,365 (Apr. 26, 2005), (it is difficult to determine the extent
to which Multibanka is used for legitimate purposes), VEF Bank, 70 Fed. Reg. 21,369, 21,372
(Apr. 26, 2005), (it is difficult to determine the extent to which VEF is used for legitimate
purposes).
21
explicit definition of primary money laundering concern. 22 It did, however, lay out objective
factors that FinCEN must consider, and it required that reasonable grounds exist in support of
such a determination. Congress, moreover, specified that FinCEN could promulgate regulations
further defining the statutory terms. To date, FinCEN has not done so.
In the FBME Bank litigation, however, the Director of FinCEN provided a declaration
setting out how FinCEN has construed the term. Focusing on the word concern, the Director
declared:
FinCEN applies a plain language approach to the phrase money laundering
concern. FinCEN understands this phrase in its colloquial sense to refer to a
perceived risk or threat that justifies action by the agency.
SOF Ex. 15 17 (emphasis added). This definition is circular and, hence, meaningless. It
conveys no content as to the nature of the perceived risk or threat that is, after all, precisely
what concern means in this context that will justify agency action. In short, the Directors
view is that FinCENs actions justify themselves. In addition, while paying lip service to the
factors Congress directs be considered, the Director makes clear that she can ignore them. Thus,
for example, as to the statutory requirement that FinCEN consider the extent to which a
sanctions target is used to facilitate or promote money laundering, the Director has announced
her view that the statute does not even require the target to actually be engaged in money
laundering at all. She made this clear in her declaration, stating, Nor does the statute require
any determination that the designated financial institution be engaged in money laundering, only
that it be of primary money laundering concern. SOF Ex. 15 16.
By any measure, this circular, subjective construction of the central statutory term is
facially arbitrary and capricious under the APA. 5 U.S.C. 706(2)(A). It amounts to nothing
22
Whether this failure renders the statute unconstitutionally vague is reserved for consideration,
should it prove necessary, under Count 3 of the Verified Complaint.
22
more than an I know it when I see it or, to be more accurate, I know it when I am concerned
standard, which is no standard at all. As the D.C. Circuit has recently reaffirmed, the standard
under which an agency exercises statutory authority must be reasonable and reasonably
explained. U.S. Postal Serv. v. Postal Regulatory Commn, 785 F.3d 740, 753 (D.C. Cir. 2015)
(citation omitted). This requirement is not met if an agency fails to articulate a comprehensible
standard.
Id.
No deference is owed to an agency determination that is largely
incomprehensible. Id. (citation omitted). The Directors sworn statements in FBME Bank are
a frank admission that FinCEN has not articulated or applied a comprehensible, objective
standard with respect to the central term in the statute and instead has adopted an impenetrable,
subjective standard.
In her declaration in FBME Bank, the Director also essentially dismisses the word
primary as a pertinent consideration under the statutory language, advancing her view that the
statute does not require any one factor to be given more weight than any other information the
Director might chose to consider and asserting that she is entitled to assess information on a
case-by-case basis, thereby stripping the concept of primary of all meaning. SOF Ex. 15
16, 17. Yet evaluating a target bank in isolation on an individual case-by-case basis is not
what the statute requires. As noted by the Supreme Court, primary is defined as [f]irst or
highest in rank, quality, or importance; principal. Brown v. Plata, 563 U.S. 493, 131 S. Ct.
1910, 1936 (2011). Use of the word primary therefore necessarily requires a comparison,
which cannot be made without the identification and designation of the most serious violators.
Unfortunately, money laundering is commonplace; virtually every bank has experienced
it. The Bank Secrecy Act does not expect or require banks to prevent all instances of money
laundering, only that they take reasonable steps to prevent the practice through appropriate
23
detection and compliance systems. 23 By using the word primary, Congress signaled that it did
not intend to sanction every bank that has had discrete instances of money laundering but rather
to reserve sanctions for banks that are the foremost, chief, or principal financial institutions of
money laundering concern to the U.S. financial system and, further, to apply the harshest
sanction to only the very worst offenders.
Nothing in FinCENs approach suggests that it gives any consideration to this statutory
requirement. To the contrary, it appears that it chooses small banks in small countries on which
to use the hammer, while ignoring banks in places that are well known to be centers of illegal
financial activity such as weapons trafficking and terror financing that threatens national security.
Certainly with respect to its NOF and NPRM against BPA, there is no indication whatsoever that
FinCEN engaged in any comparative assessment that would justify labeling this small Andorran
bank as of primary concern. There is no suggestion in the NOF that BPA was in any way
involved in weapons trafficking, terror financing, or anything that would meaningfully implicate
national security. Indeed, there is every reason to believe that BPA, as such, was of no real
concern to FinCEN, but that the actual object of FinCENs concern was the Andorran
government, whose anti-money laundering controls FinCEN felt to be inadequate.
This might be dismissed as speculation but for a rare moment of diplomatic candor when
Anton Smith, an Economic Counselor at the U.S. Embassy in Madrid said, With respect to
Andorra, last year we signaled our discomfort with an official report directing the authorities to
some failures . . . in the system there. I will not say that they did not realize it, but they did not
23
As the legislative history of Section 311 makes clear, the statute was not directed at every bank
or country that has experienced instances of money laundering but only at those posing a
significant, ongoing risk of illegal conduct. See, e.g., H.R. Rep. No. 107-250 at 63 (2001).
24
react with the appropriate vigor that we were expecting, and we had to use the hammer. 24 As
discussed above, it was not the first time that FinCEN attacked a recalcitrant jurisdiction by
using the hammer on a minor bank.
B.
FinCEN Intended for its Proposed Sanction to be Immediately

Implemented.
The idea that the NPRM is a proposed rulemaking is in fact a sham. FinCEN wastes no
time in executing its sentence. The moment the NPRM is issued, U.S. banks, as FinCEN expects
and intends, immediately stop allowing the target bank access to correspondent banking accounts.
FinCEN also urges foreign regulators to sanction the target bank without cautioning them to wait
to see whether adoption of a final regulation will actually uphold FinCENs finding and proposed
sanction.
The consequences are inevitable, intentional, and devastating.
FinCEN is the
gatekeeper for the dollar-based financial system, the preeminent system in the world necessary to
the functioning of international finance. No foreign regulator, and particularly not one from a
relatively insignificant jurisdiction like Andorra, can afford to or will challenge FinCENs role as
the worlds financial policeman and FinCEN knows this. Barred by U.S. banks from using
correspondent accounts to participate in the U.S. dollar market and beleaguered by foreign
regulators shutting down its operations abroad, the target bank quickly unravels. 25 Meanwhile,
FinCEN delays completion of its rulemaking process until the bank is wiped out and, in most
instances, issues no final regulation at all but withdraws its proceedings as moot because the
24
See Els Americans Van Actuar lany Passat Per La Falta de Fluidesa de les Autoritats
Andorranes, YouTube (uploaded May 27, 2015), https://youtu.be/jXli0F9UgqQ.
25
See, e.g., Withdrawal of the Proposed Rulemaking Against Lebanese Canadian Bank SAL, 80
Fed. Reg. 60,575, 60,576 (Oct. 7, 2015) (LCB no longer exists as a foreign financial
institution.); Repeal of the Final Rule Imposing Special Measures and Withdrawal of the
Findings of Primary Money Laundering Concern Against Myanmar Mayflower Bank and Asia
Wealth Bank, 77 Fed. Reg. 59,747, 59,748 (Oct. 1, 2012) (Subsequent to the issuance of the
final rule related to the Banks, the Government of Burma revoked the licenses of the Banks in
2005 and neither financial institution currently exists.).
25
bank, at FinCENs hand, is effectively dead. FinCEN thereby can use delay effectively to
insulate its conduct from scrutiny.
As long ago as 2008, the Government Accountability Office (GAO) investigated
FinCENs implementation of Section 311 and, in particular, questioned why extended delays
were commonplace between its issuance of an initial NOF and NPRM and any final rule. As the
GAO observed, although it often takes FinCEN years to finalize or withdraw a proposed Section
311 final rule, the proposed rules had significant impact because U.S. financial institutions took
immediate action on the basis of their being announced, effectively implementing them before
they were finalized. SOF Ex. 14 at 17. The GAO went on to state:
Despite taking years to finalize in some cases, the proposed rules under Section
311 had an immediate impact on targeted institutions and jurisdictions. Treasury,
State and Justice officials told us that once a proposed rule is issued, almost all
U.S. financial institutions immediately implement it voluntarily, stopping
transactions with designated financial institutions or jurisdictions. Federal
Reserve and Treasurys Offices of the Comptroller of the Currency officials also
said that U.S. banks often treat proposed Section 311 rules as final and generally
cut off all financial interactions with the targeted institution. Federal Reserve
officials noted that this response to a proposed rule is unusual and, within the
context of BSA requirements, appears to be unique to proposed rules under
Section 311.
Id. at 21.
Writing in response to the draft GAO Report and addressing GAOs concern about the
delay between FinCENs issuance of a proposed rule and the finalization or withdrawal of that
rule, then-Under Secretary of the Treasury Stuart A. Levey did not challenge GAOs conclusions.
Instead, he argued that there is no requirement under the APA that rules be finalized in any given
time period, admitting, indeed boasting, that FinCEN need issue no final rule precisely because
the issuance of a proposed rule can provide the result it seeks. As he put it: [T]he rule making
action is not an end in itself. The most successful exercise of Section 311 would be where the
26
underlying threat is eliminated, making the final regulatory action itself unnecessary. SOF Ex.
14 at 38 (emphasis added). 26 As the GAO recognized:
Because a proposed rule applying Section 311 in practice has the same effect as a
final rule, [FinCEN] may lack incentive to finalize or withdraw such rules.
Id. at 27. Precisely.
C.
FinCEN Frustrates any Meaningful Notice and Comment Process

by Withholding Disclosure of the Administrative Record on which its
Finding and Proposed Sanction are Purportedly Based.
Under the APA, FinCEN is required to provide adequate notice of any regulation it
proposes in order to give interested persons an opportunity to participate in the rule making. 5
U.S.C. 553(b)-(c). This is not merely a formality. Such notice must provide sufficient detail
on [the regulations] content and basis in law and evidence to allow for meaningful and informed
comment. Am. Medical Assn v. Reno, 57 F.3d 1129, 1132 (D.C. Cir. 1995). Its purpose is to
allow for an exchange of views, information, and criticism between interested persons and the
agency. Home Box Office, Inc. v. FCC, 567 F.2d 9, 35 (D.C. Cir. 1977). This is only possible
if the agency disclose[s] in detail the thinking that has animated the form of a proposed rule and
the data upon which that rule is based. Id. In the FBME Bank case, this Court recently issued
an injunction against FinCEN, directing it to voluntarily disclose all non-classified evidence
contained in the administrative record underlying its finding. 27 FBME Bank Ltd. v. Lew, No. 15CV-01270(CRC), 2015 WL 5081209, at *8 (D.D.C. Aug. 27, 2015). The onus is not on an
26
In her declaration in FBME Bank, FinCENs Director acknowledged that FinCEN has imposed
the fifth special measure in every Section 311 case it has undertaken. Her declaration listed the
fifteen matters involving financial institutions in which Section 311 sanctions have been
proposed, all of them involving the harshest sanction. In the vast majority, the NPRM was
eventually withdrawn, still remains pending, or was only concluded long after its effects were
complete. SOF Ex. 15 24.
27
The statute further provides for submission of classified information to the reviewing court ex
parte and in camera thereby allowing the full record underlying any finding and sanction to be
subjected to review. 31 U.S.C. 5318A(f).
27
interested party to request this evidence, but rather [i]t is the agencys affirmative obligation to
make this material publicly available and expose it to refutation during the rulemaking
proceeding. Id. (citing Air Transp. Assn v. FAA, 169 F.3d 1, 7 (D.C. Cir. 1999).
In utter disregard of this requirement, FinCEN has made no disclosure whatsoever in the
BPA matter beyond the NOF and NPRM themselves. While the onus was not on plaintiffs to
request this information, plaintiffs nevertheless repeatedly requested FinCEN to provide it. In a
meeting on July 15, 2015, FinCEN agreed to listen to plaintiffs counsel but declined to make
any comment or provide any additional information. In a letter to FinCEN dated July 22, 2015,
plaintiffs counsel raised numerous questions, including whether there were other cases or
matters involving BPA but not disclosed by FinCEN that FinCEN believed warranted the NOF,
whether there were factors that distinguish BPA from other Andorran banks that led to the NOF,
and whether there were communications with the Andorran government pertaining to BPA. SOF
Ex. 8 at 6-7. In a subsequent letter dated September 4, 2015, having received no response to his
specific questions, counsel for plaintiffs asked that FinCEN disclose all non-classified material
that was considered in issuing the Notice, with an opportunity to respond by BPA. SOF Ex. 9
at 5. And plaintiffs also requested the information via a FOIA request. SOF Ex. 11.
FinCEN has responded to none of these requests. In a September 16, 2015 email,
FinCEN merely stated: If a specific response to your letters is appropriate, you will receive it
by a separate communication. SOF Ex. 10. In response to plaintiffs request for documents
under FOIA, FinCEN responded that it would not even address the request until December 15,
2015, at the earliest. SOF Ex. 12. More than seven months into its purported rulemaking
proceeding, FinCEN still has yet to respond, or to provide anything beyond the NOF and NPRM.
28
In their counsels letters, plaintiffs provided FinCEN with written comments on the NOF
and NPRM, setting out to the extent possible, given their lack of access to the administrative
record or to BPAs own files after its expropriation, plaintiffs objections to FinCENs actions.
While their submissions significantly undercut statements contained in the NOF itself, 28
plaintiffs could not address any undisclosed evidence on which FinCEN purportedly based its
finding. As the D.C. Circuit has held in the due process setting: The opportunity to present
evidence and interact with the agency is plainly not enough to satisfy due process where the
plaintiff never had the opportunity to tailor its submission to the [agencys] concerns or rebut
the factual premises underlying [its] action. Ralls Corp. v. Comm. on Foreign Inv. in the U.S.,
758 F.3d 296, 320 (D.C. Cir. 2014).
In short, FinCENs unlawful actions with respect to BPA were deliberate. FinCEN fully
intended to destroy BPA as a shot across the bow of the Andorran government. FinCEN issued
its NOF and NPRM knowing and intending that they would immediately cut BPA off from
international banking connections and almost certainly result in the closure of BPA by its
regulators or creditors. Then by denying access to the administrative record, precluding timely
and meaningful comment, and delaying the issuance of a final rule, FinCEN sought to insulate its
conduct from any genuine adversarial examination and ultimately from judicial review.
FinCEN may find this conduct expedient and even commendatory.
Former Under
Secretary Levey certainly presented it as such in his letter to the GAO. But it is flatly contrary to
the statutory scheme. The statute plainly contemplates that the stigma of labeling a bank as a
primary money laundering concern and its accompanying sanctions will not be given force and
28
As noted, counsel provided FinCEN with a letter that BPA sent to its Andorran regulator over
a year earlier identifying and self-reporting each of the three specific instance of money
laundering that are included in the NOF and describing BPAs corrective actions. See pp. 10-11,
supra.
29
effect until there is a genuine and meaningful opportunity to challenge them. In respect of the
imposition of the four lesser sanctions identified by the statute including certain recordkeeping
and reporting requirements or obtaining information as to beneficial ownership of accounts and
other matters the statute limits the duration of any such sanctions to a period of 120 days unless
FinCEN engages in formal rulemaking and promulgates a final rule within that period. 31 U.S.C.
5318A(a)(3)(B). In respect of the imposition of the fifth and harshest sanction, the statute
requires FinCEN to act solely through rulemaking proceedings. 31 U.S.C. 5318A(a)(2)(C).
The statute thus contemplates that Section 311s harshest sanction will become effective only
after there has been a meaningful opportunity to test it. Unlike the lesser sanctions, which can be
made immediately effective but only for a limited period, denying a foreign bank access to the
means to process U.S. dollar-based financial transactions would devastate its ability to function
as an international bank. SOF 30; SOF Ex. 17. Unless a meaningful opportunity to challenge
the evidentiary basis for imposing this sanction is provided before the sanction is made effective,
the target bank will find itself in the same posture as the Knave of Hearts, doomed by sentence
first verdict afterward.
IV.
The Court Should Grant Urgent Relief to Avoid Ongoing Damage Due to the
Continuing Injurious Effects of FinCENs Improper Agency Action.
This Court can and should act now. FinCEN has clearly and deliberately exceeded its
delegated authority causing serious injury to plaintiffs both directly and derivatively.
Accordingly, summary judgment is appropriate on Counts 4 and 5 of the complaint.
The same is true in respect of Counts 1 and 2. It is well settled that review under the
APA is available for final agency action for which there is no other adequate remedy. 5 U.S.C.
30
704. 29 The Supreme Court has instructed courts to apply the finality requirement in a flexible
and pragmatic way. Abbott Labs. v. Gardner, 387 U.S. 136, 149-50 (1967), abrogated on
other grounds by Califano v. Sanders, 97 S. Ct. 980 (1977); see also Pub. Citizen Health
Research Grp. v. Commr, Food & Drug Admin., 740 F.2d 21, 30 (D.C. Cir. 1984) (quoting
Abbott Labs., 387 U.S. at 149-50). Courts therefore consider whether the agency action is
sufficiently final that [the court] would have no interest in postponing review. Pub. Citizen
Health Research Grp., 740 F.2d at 30.
In this case, postponing review would not only be disastrous for plaintiffs, it could
deprive this Court of its ability to adjudicate plaintiffs complaint at all. As shown above, BPA
has been expropriated, and the Andorran regulators are in the process of dismembering it and
selling the pieces. The process will soon be complete. At present, there is still the potential that
the plaintiffs can be restored to their ownership of BPA, albeit a substantially smaller BPA. But
once assets are transferred to the new government bank and that bank is sold, that possibility
becomes considerably more remote. Absent relief from this Court, there is little prospect that
BPA will survive and plaintiffs interest in it can be saved.
It is thus self-evident that, as a practical matter, the NPRM imposed immediate and
permanent sanctions on BPA and is therefore effectively final. As the GAO observed in its 2008
report, FinCENs NPRMs are unique among proposed rulemaking because they have
significant and immediate impact on targeted institutions. U.S. and foreign financial
institutions respond to an NPRM by immediately closing the accounts of a targeted bank. The
NPRM therefore has the same effect as a final rule. SOF Ex. 14 at 17, 21, 27. That the NPRM
29
The NOF labeling BPA a primary money laundering concern constitutes final agency action
as it is effective as [sic] March 6, 2015, it contemplates no further action by FinCEN, and there
is no administrative procedure for its appeal.
31
expressly encourage[d] other countries to take similar action by prohibiting their own domestic
banks from doing business with BPA, reflects FinCENs own understanding that its decision was
already final. SOF Ex. 5 at 13305.
Moreover, FinCENs previous conduct and statements make clear that waiting for a final
rule in this case may be futile. FinCEN routinely postpones the issuance of a final rule until the
final rule is no longer necessary. The GAO recognized this potential abuse of the rulemaking
process in its 2008 report, noting that because an NPRM has the same effect as a final rule,
FinCEN may lack incentive to finalize or withdraw such rules. SOF Ex. 14 at 27. The futility
of awaiting a final rule is underscored by the recent action taken by FinCEN in relation to
Lebanese Canadian Bank SAL (LCB).
In February 2011, FinCEN issued a proposed
rulemaking to impose the fifth special measure against LCB. As a result of that proposed
rulemaking, LCBs banking license was revoked and its assets were liquidated. In October of
this year, after more than four years, FinCEN revoked its NPRM against LCB and advised that it
would not issue a final rule because LCB no longer exists as a foreign financial institution. 80
Fed. Reg. 60575, 60576 (Oct. 7, 2015).
If the Court awaits further action from FinCEN, BPA will almost certainly suffer the
same fate as LCB and FinCEN will be free to continue to violate its statutory obligations. The
D.C. Circuit has cautioned that when disinclined to find finality, [the courts] must then weigh
this consideration against the immediate impact of the actions on the challengers, and whether
that impact is so harmful that present consideration is warranted. Pub. Citizen Health Research
Grp., 740 F.2d at 30 (quotation omitted). 30 The immediate and crushing impact of the NOF and
30
The D.C. Circuit has held that [t]o be final, an action need not be the last administrative
[action] contemplated by the statutory scheme. Rather, the question is whether the agency has
32
the NPRM on BPA and on plaintiffs outweighs the need to wait for a relatively insignificant
administrative step that FinCEN may delay for months or even years, if it ever takes that step at
all. Immediate consideration of FinCENs actions is more than justified in these circumstances.
Accordingly, plaintiffs respectfully request that the Court enter partial summary
judgment in plaintiffs favor and order as follows:
(i)
That FinCENs NOF and NPRM be vacated;
(ii)
That FinCEN is directed forthwith to provide notice of the foregoing to all U.S.
financial institutions through publication in the Federal Register;
(iii)
That FinCEN is directed forthwith to provide notice to BPAs prior U.S.

correspondent banks, advising them that the NOF and NPRM against BPA have
been vacated and that these banks are free to resume correspondent banking
relationships with BPA without regulatory consequence;
(iv)
That FinCEN is directed forthwith to provide notice to BPAs regulator and

administrator in Andorra that its NOF and NPRM against BPA have been vacated
and that FinCEN withdraws its prior encouragement to take adverse action against
BPA; and
(v)
That FinCEN is directed promptly to report to this Court, with copy to plaintiffs,
the results of its compliance with the foregoing.
impose[d] an obligation, denie[d] a right, or fixe[d] some legal relationship. Role Models Am.
Inc. v. White, 317 F.3d 327, 331 (D.C. Cir. 2003) (citation and quotations omitted).
33
CONCLUSION
For the foregoing reasons, plaintiffs respectfully request that the Court enter partial
summary judgment in their favor as set out in the accompanying Proposed Order.
LEWIS BAACH PLLC
(202) 833-8900
LEWIS BAACH PLLC
New York, NY 10174
(212) 826-7001
Dated:
November 12, 2015
34


Situated,
Plaintiffs,

v.
Defendants.
STATEMENT OF UNDISPUTED MATERIAL FACTS
IN SUPPORT OF PLAINTIFFS MOTION FOR PARTIAL
SUMMARY JUDGMENT AND REQUEST FOR EXPEDITED CONSIDERATION
Pursuant to LCvR 7(h), plaintiffs Ramon Cierco, Higini Cierco, Successors DHigini
Cierco Garcia, S.A., and Cierco Martinez 2 2003, S.L., by and through undersigned counsel,
hereby submit the following statement of undisputed material facts in support of their motion for
partial summary judgment under Fed. R. Civ. P. 56.
Parties and Relevant Non-Parties
1.
Banca Privada dAndorra S.A. (BPA or the Bank) is an international,
commercial bank organized under the law of Andorra, with its principal place of business in
Andorra. Declaration of Ramon Cierco attached hereto as Ex. 1 3-5; Ex. 2 at 13464.
2.
Ramon Cierco and Higini Cierco (the Ciercos) are citizens and residents of
Andorra and together with another family member own all of the shares of Successors DHigini
Cierco Garcia, S.A., a corporation organized under Andorran law. Ex. 1 1-3.
3.
Higini Cierco and his immediate family own all of the shares of Cierco Martinez
2 2003, S.L., a corporation organized under Andorran law. Ex. 1 4.

4.
The two corporations, Successors DHigini Cierco Garcia, S.A., and Cierco
Martinez 2 2003, S.L., together with Ramon Cierco individually and another Cierco family
member, collectively own 75% of BPA. Ex. 1 5.
5.
Prior to BPAs seizure by the Andorran government, Ramon and Higini Cierco
served as non-executive directors of BPA and, on a rotating basis, as the Chairman of the Board
of Directors of BPA. Ex. 1 6.
6.
The U.S. Department of the Treasury is the executive agency led by Secretary of
the Treasury Jacob Lew.

7.
The Secretary of the Treasury implements and administers Section 311 of the
USA PATRIOT Act (codified at 31 U.S.C. 5318A). Secretary Lew has delegated this authority
to the Director of the Financial Crimes Enforcement Network (FinCEN), a bureau within the
Department of the Treasury. Jennifer Shasky Calvery is the Director of FinCEN and is sued in
her official capacity. Ex. 2 at 13464; Ex. 15 1, 6.
U.S. and Andorran Discussions Leading Up to the Seizure of BPA
8.
On or about August 26, 2014, the U.S. Embassy in Spain sent a Verbal Note to
the Andorran government. Ex. 3.
9.
On September 22, 2014, the Andorran authorities responded to the Verbal Note.
Ex. 4.1
FinCENs Issuance of the Notice of Finding and Notice of Proposed Rulemaking
10.
On March 10, 2015, FinCEN issued a Notice of Finding (NOF) described in the
Federal Register as Notice of Finding that Banca Privada dAndorra is a Financial Institution of
Primary Money Laundering Concern, 80 Fed. Reg. 13464 (Mar. 13, 2015). Ex. 2.
11.
At the same time, FinCEN issued a Notice of Proposed Rulemaking (NPRM)
announcing its intention to impose a Special Measure against Banca Privada dAndorra as a
Financial Institution of Primary Money Laundering Concern, 80 Fed. Reg. 13304 (Mar. 13,
2015). Ex. 5.
12.
Prior to issuing the NOF, FinCEN gave no notice to BPA or to plaintiffs that it
was investigating BPA and was considering issuing a finding against BPA under Section 311.
BPA, its Board of Directors, and its majority shareholders had no opportunity to participate in or
otherwise offer input into the investigative process leading to the NOF. Ex. 1 7.
13.
On May 6, 2015, counsel for plaintiffs submitted a written Comment to FinCEN
objecting to the NOF and the NPRM and offering information in support of their objection. Ex.
6. 2
14.
On July 15, 2015, counsel for plaintiffs met with FinCEN personnel. At the July
15 meeting, counsel for plaintiffs offered to provide to FinCEN a copy of a letter dated March
24, 2014, from BPA to the Andorra financial regulator, Institut Nacional Andorra de Finances
1
For the Courts convenience, English translations follow all Spanish-language exhibits.
Plaintiffs do not attach all of the exhibits to the May 6 letter because plaintiffs are not seeking
review on the merits. All exhibits that bear on plaintiffs motion (e.g. the Government
Accountability Office (GAO) report referenced in paragraph 26, supra.) are referenced
separately and attached.
3
(INAF), which described the specific instances of alleged money laundering cited in the NOF.
FinCEN asked that counsel for plaintiffs put this offer in writing. Declaration of Eric L. Lewis
attached hereto as Ex. 7.
15.
On July 22, 2015, counsel for plaintiffs sent a letter to FinCEN further addressing
the NOF and NPRM and offering to provide the March 24, 2014 letter. Ex. 8.
16.
By letter of September 4, 2015, counsel for plaintiffs made a further submission
to FinCEN concerning the NOF and NPRM. The letter requested that FinCEN disclose all nonclassified information that it considered in issuing the NOF and NPRM, with an opportunity for
plaintiffs to respond. The letter attached a copy of BPAs March 24, 2014 letter to INAF. Ex. 9.
17.
To date, FinCENs only response to the requests made by plaintiffs counsel was
in an email dated September 16, 2015. Ex. 10.

18.
On August 7, 2015, counsel for plaintiffs wrote to the FinCEN Disclosure Office
requesting documents related to BPA under the Freedom of Information Act (FOIA). Ex. 11.
19.
On September 14, 2015, Gilbert L. Paist, Disclosure Officer, responded by
stating that FinCENs estimated response date is December 15, 2015. Ex. 12.
20.
The only portions of the administrative record relating to the NOF and NPRM
that FinCEN has disclosed to plaintiffs are the NOF and NPRM themselves. Ex. 7 4.
BPAs Legitimate Business
21.
Until March 10, 2015, BPA engaged in regular banking business in Andorra and,
through subsidiaries, in Spain and Panama. In addition, BPA had representative offices in
Luxembourg and Switzerland. Ex. 1 8; 2 at 13464.
22.
BPA offered a wide variety of financial products and services, including corporate
and personal banking, loans, funds management, and custody services. Ex. 1 9; Ex. 2 at 13466.
23.
When BPA acquired Banco Madrid in 2011 and made it a BPA subsidiary, the
Bank of Spain investigated and agreed not to oppose the purchase. Ex. 13.
24.
Information concerning BPAs legitimate business was available from: (i) BPAs
regulators in Andorra, Spain, and Panama; (ii) its banking and financial partners, including those
in the United States; (iii) its AML auditors Deloitte and KPMG; (iv) its directors, shareholders,
senior management, and employees; and (v) its customers. Ex. 1 10.
25.
Prior to March 10, 2015, BPA maintained a public website on which it posted its
financial statements from 2011, 2012, and 2013, information concerning its corporate structure,
data concerning its business, and a description of its policy on corporate responsibility. Ex. 1
11.
Injurious Effects of the NOF and NPRM
26.
In September 2008, the Government Accountability Office (GAO) issued a
report entitled USA PATRIOT Act, Better Interagency Coordination and Implementing
Guidance for Section 311 Could Improve U.S. Anti-Money Laundering Efforts. The GAO was
asked to examine (1) the process used to implement Section 311 restrictions, (2) the process
Treasury follows to finalize or withdraw a proposed rule, and (3) how Treasury assesses the
impact of Section 311. Ex. 14 at 1.
27.
In connection with litigation brought by FBME Bank Ltd. and FBME Ltd. styled
FBME Bank Ltd., et al. v. Lew, et al., Case No. 1:15-CV-1270 (CRC) (D.D.C.), on August 18,
2015, FinCEN Director Jennifer Shasky Calvery submitted a Declaration discussing, inter alia,
FinCENs implementation of Section 311. Ex. 15.
28.
In response to the NOF and NPRM, BPAs correspondent banks in the United
States immediately closed BPAs accounts. Ex. 1 12; Ex. 16.
29.
As a consequence of the cancellation of its correspondent banking accounts in the
United States, BPA could no longer engage in dollar-based transactions, thus precluding it from
acting as an international bank. Ex. 1 12; Ex. 16.
30.
In testimony before the United States Senate Committee on Foreign Relations,
David S. Cohen, Under Secretary for Terrorism and Financial Intelligence, Department of
Treasury, testified that losing the ability to facilitate transactions in the dollar is a death
penalty for any international bank. Ex. 17 at 2.
31.
On March 11, 2015, BPA was seized by the Andorran government.
The
Andorran financial regulator, INAF, announced that the seizure was not motivated by a . . . lack
of liquidity nor solvency of BPA or its Group but was caused by the action of the FinCEN.
Ex. 18.
32.
On April 2, 2015, Andorra enacted its Restructuring of Financial Entities Act,
Leg. No. 8/2015, enacted specifically to address FinCENs actions against BPA. On April 27,
2015, BPA was placed in administration. Ex. 19.
33.
The Agency for the Restructuring of Financial Entities (AREB) BPAs
Administrator is a corporation established under Leg. No. 8/2015, and managed by a five
person board of directors. Exs. 19 and 20.
34.
AREBs statutory responsibility is to supervise the Resolution in which assets
of BPA will be transferred to a good bank and that bank will be sold to new owners in a public
bidding process. Ex. 21. AREB has announced applications for bidders. Ex. 22. AREB has
also announced that it intends to complete the Resolution expeditiously. Exs. 20, 21 and 22.
35.
Also in response to the NOF and NPRM, BPAs regulator in Spain seized Banco
Madrid, BPAs subsidiary in that country.
On March 16, 2015, Banco Madrids new
administrators filed for bankruptcy. Ex. 23.

36.
On March 10, 2015, BPAs regulator in Panama seized BPAs subsidiary in that
country. Ex. 24. BPA Panama remains under the control of the Panamanian regulator. Ex. 25.
37.
On September 9, 2015, the Ciercos met with representatives of AREB who
indicated that AREB did not intend to challenge the NOF and NPRM. Ex. 1 13.
38.
AREB has not submitted a comment in response to the NPRM or
otherwise suggested that it intends to challenge the NOF and NPRM. Docket Folder Summary,
Imposition of Special Measure against Banca Privada dAndorra as a Financial Institution of
Primary Money Laundering Concern, http://www.regulations.gov/#!docketDetail;D=FINCEN2015-0002 (last visited Nov. 10, 2015).
LEWIS BAACH PLLC
(202) 833-8900
LEWIS BAACH PLLC
New York, NY 10174
(212) 826-7001
Dated:
November 12, 2015
EXHIBIT 1


Situated,
Plaintiffs,
v.
Defendants.
DECLARATION OF RAMON CIERCO

I, Ramon Cierco, based on personal knowledge, declare the following under penalty of
perjury:
1. I am a citizen and resident of Andorra. I make this declaration in support of Plaintiffs
Motion for Partial Summary Judgment and Request for Expedited Consideration filed in the
above-captioned action.
2. My brother Higini Cierco is also a citizen and resident of Andorra.
3. I, my brother Higini Cierco, and another family member own all of the shares of
Successors DHigini Cierco Garcia, S.A. (Successors DHigini), a corporation organized under
Andorran law. My late father also was named Higini. Attached as Exhibit A is the Corporate
Registration Certificate for Successors DHigini. 1
1
This exhibit A as well as Exhibits B and C are in Catalan, the official language of Andorra.
4. My brother Higini Cierco and his immediate family own all of the shares of Cierco
Martinez 2 2003, S.L. (Cierco Martinez), a corporation organized under Andorran law.
Attached as Exhibit B are the Organizational Documents for Cierco Martinez.
5. Successors DHigini, Cierco Martinez, another Cierco family member, and I collectively
own 75% of Banco Privada dAndorra S.A. (BPA). Attached as Exhibit C is a list of the
shareholders of BPA.
6. At the time of BPAs seizure by the Andorran government, my brother Higini and I
served as non-executive directors of BPA and, on a rotating basis, as the Chairman of the Board
of Directors of BPA.
7.
FinCEN did not notify BPA, its Board of Directors, nor my brother and me or, to the
best of our knowledge anyone associated with BPA, that it was investigating BPA and
considering issuing a Notice of Finding (NOF) against BPA or issuing a Notice of Proposed
Rulemaking (NPRM) under Section 311. We did not have an opportunity to discuss with
FinCEN any of its concerns with respect to BPA or otherwise participate in FinCENs
investigative process that led to these Notices.
8. Until the issuance of the NOF and NPRM on March 10, 2015, BPA engaged in regular
banking business in Andorra and, through subsidiaries in Spain and Panama. In addition, BPA
had representative offices in Luxembourg and Switzerland.
9. BPA offered a wide variety of financial products and services, including corporate and
personal banking, loans, funds management, and custody services. In connection with those
services, BPA maintained correspondent bank accounts in the United States.
10. Information concerning BPAs business was readily available from: (i) BPAs regulators
in Andorra, Spain, and Panama; (ii) its banking and financial partners, including its
Should the Court require translations, I would be happy to provide them.
2
correspondent banks in the United States; (iii) its AML auditors- Deloitte and KPMG; (iv) its
directors, shareholders, senior management, and employees; and (v) its customers.
11. Prior to March 10, 2015, BPA maintained a public website on which it posted its
financial statements from 2011, 2012, and 2013, information concerning its corporate structure,
data concerning its business, and a description of its policy on corporate responsibility. The
website address is: https ://www.bpa.ad/.
12. After FinCEN issued the NOF and NPRM, the banks with which BPA maintained
correspondent bank accounts in the U.S . immediately closed BPA ' s accounts. As a result, BPA
could no longer engage in dollar-based transactions and could no longer operate as an
international bank.
13. After several requests from our Andorran counsel, on September 9, 2015, representatives
from BP A's Administrator, the Agency for the Restructuring of Financial Entities ("AREB"),
agreed to meet with me and my brother Higini . During that meeting we asked for AREB's
cooperation with our efforts to respond to the NOF and NPRM issued by FinCEN. AREB
informed us that it would not challenge FinCEN's notices.
I declare under penalty of perjury under the laws ofthe United States of America that the
foregoing is true and correct.
Executed on November 101h, 2015
EXHIBIT A
OMERC11/12/15 Page 6 of 33
24105 12004Case
l 0: 2J
PAX 867J45
1:15-cv-01641-JEB
DocumentOEP.O
15-3E CFiled
Gove rn d' Andorra

~ Ministeri d 'Econom.ia
REGISTRE DE SOCIETATS
CERTIFICAT D'INSCRIPCIO
NOM DE LA SOCIETAT SUCCESSORS O'HIGINI CIERCO GARCIA, S.A.

A NAGRAMA
SUC.H.C.G., S.A.
TIPUS DE SOCI ETAT
SOCIETAT PER ACCIONS
DOMICILI SOCIAL
CARRETERA OE LA COMELLA NUM. 11

EDIFICI CIERCO
ANDORRA LA VELLA
CAPITAL SOCIAL 1 .020.000 EUROS
NUM. ACCIONS 0 PART ICIPACIONS
VALOR NOMINAL ACC IONS 0 PART ICIPACIONS ., . ................... 1.000
1.020
DESEMBOS 100 %
ACTIVITAT MERCANTIL
AOMINISTRACIO I TUTELA, EN EL SENTIT MES AMPLI, OELS BENS, ORETS, CREDITS , ACCIONS I
PARTICIPACIONS PROPIETAT DEL PATRIMONI FAMILIAR, 0 DEL PATRIMONI PERSONAL DE CADA
MEMBRE DE LA FAMiLIA QUE SIGUIN APORTATS A LA SOCIETAl FAMILIAR.
AUTORITZACIO GOVERN DECRET
DATA 28104/04
2004/0030616
1479
OAT A
19105104
CIERCO NOGUER, HIGINI
REPRESENTANT $ DE LA SOC IETAl

NOGUER ENRIQUEZ, ROSER
LLIBRE S-142
NUM. REGISTRAL DE LA SOC IETAT 11141
FOLI 217224
DATA INSCRIPCIO CONSTITUTIVA 21 /05/04

DATA LLIURAMENT DE LA CERTIFICACIO D'I NSCRIPCIO
21/05104
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Ill 0 2
EXHIBIT B
Josep Estafiol i Cornelia

Notari
N PROTOCOL:
DATA FIRMA:
VUlT-CENTS NORANTA-SIS
u d'abril de l'any dos mil quatre.
CONSTITUCI6 DE LA SOCIETAT
"CIERCO MARTINEZ 2 2003, S.L. .(C.M. 2, SL)"

ATORGANTS :
Higini CIERCO NOGUER, Maria del Carmen MARTINEZ GRIMA i
Carme CIERCO MARTINEZ.
___
Av. Conscll d'Eurona. mlm. 13. 2n - TciCfon 80 12 80 - Fax 80 12 81
_./
NUMERO VUlT -CENTS NORANTA-SIS

CONSTITUCIO DE SOCIETAT DE RESPONSABILITAT
LIMIT ADA
A Andorra Ia Vella, el dia u d'abril de I' any dos mil quatre. -------Davant meu, Josep ESTANOL i CORNELLA, Notari del
P ri nci pat d 'Andorra,----------------------------------------------------------------------------------------------------- COMPARE IX EN:--------------------------------
- El senyor Higini CIERCO NOGUER, nascut el 24 de maig de

1958, casat sota el n3gim economic de separaci6 de bens -segons
firma-, de nacionalitat andorrana, titular del passaport numero 5915,
i de Ia present vila, amb domicili al Carrer Ia Creu Grossa,

umero 31, xalet Cierco. ----------------------------------------------------------- I l'esposa de !'anterior, Ia senyora Maria del Carmen
ARTINEZ GRIMA, nascuda el 26 de marc; de 1970, de nacionalitat
andorrana, titular del passaport numero 29237 i del seu mateix
. dom1c1
. 11. ---------------------------------------------------------------- - ve..1nat ge 1
INTER\fENEN:-----------------------------------------------------------------
..1nt eres
' prop1s.---------------------------------------------------.
- E n nom 1
1/5
- I tambe, ambd6s conjuntament i en tant titulars de Ia patria

potestat, en nom i representaci6 de llur filla menor Carme CIERCO
MARTINEZ, nascuda el 30 de novembre de l'any 2003, de
nacionalitat andorrana, titular del passaport numero 31128.-------------
Conec els compareixents. ------------------------------------------------Tenen, a judici meu, Ia capacitat legal necessaria per a aquest
acte, i------------------------------------------------------------------------------------
--------------------------------- E: )( f> () E) E: ~ : ----------------------------------A.- Que volen formalitzar l'escriptura publica de constituci6
d'una societat de responsabilitat limitada de nacionalitat andorrana. B.- Que per Resoluci6 numero 29648/2004, de data disset de
marg de l'any dos mil quatre, que em remeten i protocollitzo amb

aquesta escriptura, Govern ha autoritzat Ia constituci6 de Ia referida
societat amb Ia denominaci6 "CIERCO MARTINEZ 2 2003, S.L.
(C. M. 2, S L)". --------------------------------------------------------------------------
1, amb aquesta finalitat, ------------------------------------------------------------------------------------ ~ 1i () ~
c;
lJ E: ~ :----------------------------------
1.- CC>~E>1il1ilJCI6. Els compareixents, senyors Higini CIERCO

NOGUER i Maria del Carmen MARTINEZ GRIMA, en nom propi i en
representaci6 de llur filla menor Carme CIERCO MARTINEZ,
manifesten Ia seva voluntat de constituir, i constitueixen en aquest
acte, per temps indefinit, Ia societat "CIE:~CC> MAR1il~E:Z 2 2003,
S. L. (C. M. 2, SL)". ------------------------------------------------------------------
11.- REGIM. La Societat es regira pel Reglament de Societats

Mercantils de data dinou de maig de mil nou-cents vuitanta-tres i
demes disposicions legals aplicables, aixi com pels Estatuts Socials
que, redactats a una sola cara en set (7) fulls de paper cornu, han
estat aprovats per Govern i segellats, en tots els seus fulls, pel
Min isteri d' E co nom ia.----------------------------------------------------------------
fundadors s'eleven a public per Ia present escriptura i jo el Notari, els
Els citats estatuts, llegits,
aprovats i firmats pels socis
protocol litzo, passant a formar part integrant de Ia mateixa.-------------
111.- CAPITAL SOCIAL. El capital social es de SIS MIL EUROS

(6.000.- ), dividit en CENT (100) participacions socials d'un valor
\~ominal de SEIXANTA EUROS (60.-
I'
) cadascuna, numerades de
1\aI 100. ------------------------------------------------------------------------------IV.- SUBSCRIPCI6. Les participacions representatives del
capital social s6n integrament subscrites pels socis fundadors en Ia

.. nt pro po rc1o
. ' : ------------------------------------------------------------------segue
a) El senyor Higini CIERCO NOGUER subscriu VUITANTA (80)

participacions socials, concretament les numeros 1 al 80, ambdues
incloses, es a dir un nominal de QUATRE MIL VUlT-CENTS EUROS
(~.800.- ). -----------------------------------------------------------------------------
b) La senyora Maria del Carmen MARTINEZ GRIMA subscriu
1/5
DEU (1 0) participacions socials, concretament les numeros 81 al 90,

ambdues incloses, es a dir un nominal de SIS-CENTS EUROS
(600.- ~). ------------------------------------------------------------------------------c) I Ia menor Carme CIERCO MARTINEZ, per mitja dels seus
representants legals, subscriu DEU (10) participacions socials,
concretament les numeros 91 al 100, ambdues incloses, es a dir un
nominal de SIS-CENTS EUROS (600.- ~). ---------------------------------V.- DESEMBOSSAMENT.- El valor nominal de Ia totalitat de
les participacions ha estat desembossat integrament, en metallic,

mitjan9ant aportaci6 ingressada, abans d'aquest acte, en un compte
bancari obert a nom de Ia societat en constituci6, segons consta en
el corresponent certificat que em lliuren i jo protocollitzo amb Ia
present. --------------------------------------------------------------------------------A resultes del que precedeix, el capital social queda totalment
su bscrit i d esembossat. -----------------------------------------------------------VI.- ORGAN D' ADMINISTRACIO. Els socis fundadors, reunits
en Junta General Universal, de conformitat amb les previsions
estatutaries, acorden per unanimitat nomenar ADMINISTRADOR
UNIC el senyor Higini CIERCO NOGUER. ---------------------------------EI nomenat accepta el carrec, i es compromet a exercir-lo amb
lleialtat i diligencia; en els termes prescrits en els Estatuts Socials i
en Ia legislaci6 vigent. --------------------------------------------------------------
------------------------- ATORGAMENT I AUTORITZACIO: ------------------
Aixi ho atorguen els compareixents, els quais despres d'haverlos-hi estat llegida Ia present escriptura, i advertits del dret de llegir-
!~e-la
!
ells mateixos, aixi com dels efectes de Ia inscripci6 de Ia
~resent escriptura al Registre de Societats, es ratifiquen en el seu
ontingut i firmen amb mi, el Notari. _____________________________ : ______________ _

De tot el qual, i d'haver redactat aquest instrument public en
tres fulls de paper comu, jo, el Notari, en dono fe. -------------------------Hi ha les firmes dels compareixents.------------------------------------8 ignat == Josep Estanol == ru bricat. ---------------------------------------Hi ha el segell de Ia Notaria. ----------------------------------------------1
NOT A: Presentades al Registre de Societats dues copies de Ia
. present escriptura als efectes de Ia seva inscripci6, conforme al
previst a !'article 4 del Reglament de Societats. ----------------------------Signat == Josep Estanol == ru bricat. ---------------------------------------Hi ha el segell de Ia Notaria. ----------------------------------------------NOTA SEGONA: Als efectes anteriors, incorporo a Ia matriu
fo.tocopia simple del fax justificatiu de Ia seva inscripci6 rebu t del
Departament de Co mere;: del Ministeri d'Economia. ------------------------., Signat == Josep Estanol == rubricat. ---------------------------------------HJ ha el segell de Ia Nota ria. ----------------------------------------------Es copia conforme al seu original que, sota e numero al principi
indicat, obra en el meu protocol d'enguany, a qual em remeto i
fotocopia dels documents amb ell protocol.litza i, requerit, Ia lliuro
en tres fulls de paper comu, mecanografiats a es cares que signo,
firmo, rubrico i segello a Andorra Ia Vella, el ci c d'abril de l'any dos
mil quatre, de que dono fe .
5/S

Govern
d ' Andorra
[~____________________________R__e_so_I_u_c_i_o__________________________~J
Niun. d'cxpcdicnt de Ia sol licitud :
Data d'cntmda:
30/ 12/2003
16734
Nlun. de rcsoluci6:
2'JM H/20!H
VIST <JUC Ia documentaci6 presentada s'ajusta a l:llegisl:lcio vigent;
El G overn RESOL
que autoritza cis Srs. Higini CIERCO NOGUER i Carme l\{ARTINEZ GRIMA, en nom propi i en nom i rcprcscntaci6
d e llur filla menor d'edat Carmc ClllRCO MARTINEZ a constituir una societat mcrcantil de responsabilitat limitada, Ia
qual, a mh Ia dc nominaci6 " C IERCO MJ\RTiNEZ 2 2003, SL (C. l\L2, SL)", tc per objectc Ia gestio i l'administraci6 en d
scntit mcs ampli, de hens patrimonials familiars, d 'acord amb )'article 6 de Ia Llei de rcgulaci6 de faculta ts opc mtivcs de
divcrsos components del sistema finan cer, de data 19 de dcsembre de 1996. Aprova tambe els cstatuts prcsentats. L:1
societal tc cl domicili a b Carrc tera de Ia Comella ni1m. II , cdifici C icrco, d'Andorra Ia Vella.
Cal obtc nir l'autoritzaci6 previa per obrir qualsevol establime nt com ercial o industrial, com tambc per cada activitat q ue
vulguin excrcir a Ia qual cis doni drct l'objccte de Ia societal constitlJi"da.
Les pc rsoncs intercssades s'han de subjectar scmpre a Ia lcgislaci6 vigcnt i a Ia que es pugui dictar e n cl fu tur.
Miqucl Alvarez Marfany
l\linistre d'Economia
Andorra Ia Veil.
CIERCO MARTiNEZ 2 2003,

(C.M.2, S,L.)
EST AT U T .S
TiT 0 L
Ra6 social. Objecte. lnici d'operacions. Duraci6.

Domicili.
Article 1er.- Amb Ia denominaci6 de "CIERCO MARTiNEZ 2

2003, S.L., (C.M.2, S.L.), es constitueix una societat mercantil de
responsabilitat limitada, de conformitat amb el Oecret sobre principis
dels MM.II.SS. Delegats Permanents de data primer de mar<; de
1.979, i d'acord amb el Reglament de Societats Mercantils aprovat pel
M. I. Consell General en Ia seva sessi6 del dia 19 de maig de 1.983,
que es regira pels presents Estatuts. -----------------------------------------Article 2on.- La societat tindra per objecte Ia gestio i
l'administraci6 en el sentit mes ampli, de bens patrimonials familiars,
d'acord amb !'article 6 de Ia Llei de regulaci6 de facultats operatives
de diversos components del sistema financer, de data 19 de
desembre de 1996. -----------------------------------------------------------------
La societat, podra realitzar altres activitats que constitueixin

objectes accessoris o complementaris al principal..-----------------------Article 3er.- La Societat, podra iniciar les seves operacions,
desenvolupant el seu objecte social, tan prompte com estigui inscrita
en el Registre de Societats. -----------------------------------------------------Article 4rt.- La duraci6 de Ia Societat sera indefinida, a
comptar del dia en que adquireixi personalitat juridica, d'acord amb
les disposicions legals vigents al PrincipaL ---------------------------------Article 58.- La Societat tindra el seu domicili social a Ia
Carretera de Ia Comell a num. 11, Edifici Cierco, Andorra Ia Vella,
pod ent esser traslladat a qualsevol altre indret del Principat, per
acord de Ia Junta General de Ia Societat. ------------------------------------
TiTOL II
Capital social. Participacions i desemborsament.

Article 6e.- El capital d'aquesta Societat sera de SIS MIL
EUROS (6.000) i estara representat per CENT (1 00) participacions
socials de SEIXANTA EUROS (60) cadascuna de valor nominal.--El capital social podra esser augmentat o disminun per acord
de Ia Junta General de Ia Societat, previa l'autoritzaci6 del M.l.
Govern. -------------------------------------------------------------------------------Article 7e.- El capital referit a !'article anterior sera totalment
subscrit i desemborsat, abans, o en el moment en que s'atorgui
I'Escriptura Publica de Constituci6. --------------------------------------------Article
8e.-
8.1.- Cada participaci6 social confereix al seu titular un dret

proporcional equivalent al nombre de participacions existents, en el
repartiment dels guanys de Ia Societat que Ia Junta General de Ia
mateixa acordi d istri bu ir. ---------------------------------------------------------8.2." En cas d'usdefruit de participacions, l'usufructuari queda
en virtut dels presents Estatuts, subrogat en els drets corresponents
a Ia qualitat de soci, quant respecta l'assistencia, veu i vot en les
Juntes Generals. L'usufructuari participara en els beneficis socials
obtinguts durant el periode de vigencia de l'usdefruit, encara que Ia
seva distribuci6 hagi estat efectuada amb posterioritat a l'extinci6 del
dret.--------------------------------------------------------------------------------------
8.3." Quan les participacions estiguin cedides en usdefruit o en

penyora, l'usufructuari i el creditor pignoratici tindran dret,
respectivament, el primer a Ia participaci6 en els beneficis socials,
aixi com a l'exercici dels altres drets de soci, i el segon a inst'ar
l'execuci6 de Ia seva garantia. La qualitat de soci l'ostentara,
respectivament, el propietari o deutor, excepte que Ia societat, per
les circumstancies particulars del cas concret, determini altrament.--8.4." Quan es subscriguin naves participacions, l'usdefruit
s'es tendra a totes les participacions.-------------------------------------------
Article 1Oe.- La titularitat d'una o mes participacions socials

comportara Ia submissi6 als acords adoptats per Ia Junta General i Ia
plena adhesi6 als presents estatuts, aixi com a Ia legislaci6 vigent i
Ia que pugui dictar-se en un .futur. ----------------------------------------------
TIT 0 L Ill
Cessio i transmissi6 de participacions socials.

Article 11 e.11.1.- La cessio o transmissi6 de participacions socials feta a
titol hereditari "mortis causa" e "inter vivos" sera restringida a
familiars directes i collaterals. --------------------------------------------------11.2.- Si Ia transmissi6 tingues lloc per execuci6 d'una garantia
pignoraticia sabre participacions socials, els socis tindran un dret
real de retracte per a subrogar-se en el lloc de l'adjudicatari de les
participacions socials pignorades, mitjan9ant abonament del preu
justificat de l'adjudicaci6 i de les despeses d'atorgament dels
documents extrajudicials que formalitzin el retracte.----------------------En defecte de justificaci6 del preu de l'adjudicaci6, el retracte
s'exercitara pel preu que fixi Ia Junta General, segons estipulen els
presents Est atu ts. ------------------------------------------------------------------Article 12e.- La transmissi6 de participacions socials que no
s'ajusti a les previsions de !'article anterior, sera nul la i inefica9. ------
TIT 0 L IV
Regim i administraci6 de Ia Societat.
Article 13e.- La Societat sera regida i administrada per Ia Junta

General de Ia Societat i per un Admini strador Unic. -----------------------
TiTOL V
Junta General de Ia Societ
Article 14e.-
En general, podra deliberar i decidir sabre tot alia . que cregui

necessari per a Ia bona marxa de Ia Societat que no estigui
expressament reservat a Ia Junta General Extraordinaria. --------------Article 15e.- La convocatoria de les Juntes Generals
correspondra a I'Administrador Unic, en un termini de vint dies habils
a comptar de Ia seva recepci6, mitjanvant lletra certificada adreyada
a tots els socis. La convocatoria contindra l'expressi6 del lloc, dia i
hora de Ia reuni6 i l'ordre del dia dels assumptes que hagin de
tra eta r-se. ----------------------------------------------------------------------------La Junta General Ordinaria estara validament constitu'ida en
primera convocatoria, quan hi assisteixin Ia majoria dels socis i
almenys Ia meitat del capital desembossat.---------------------------------Transcorregudes 24 hares d'enya Ia primera convocatoria
podra celebrar-se Ia segona, aleshores, Ia Junta estara validament
constitu'ida qualsevol que sigui el nombre de socis i de capital
present.--------------------------------------------------------------------------------L'adopci6 d'acords de Ia Junta General Ordinaria exigira en
primera i segona convocatoria, el vot favorable de Ia majoria de socis
que concorrin a Ia referida Junta validament convocada i que
representin mes de Ia meitat del capital social. ----------------------------Article 16e.- Amb caracter extraordinari, es reunira Ia Junta
General de Ia Societat, sempre que Ia convoqui I'Administrador Unic,
o be sempre que ho demanin un o mes socis que representin ,
almenys, Ia decima part del capital desemborsat. ---------------------------
A Ia Junta General Extraordinaria, li seran expressament

reservades les atribucions segOents: Ia modificaci6 dels Estatuts,
sotmesa a l'aprovaci6 del M. I. Govern; augmentar o disminuir el
capital social; dissoldre Ia Societat, i Ia resoluci6 de les questions
d'especial importancia o urgencia que interessi a Ia SocietaL ----------
La Junta General Extraordinaria estara validam

primera convocat6ria, quan hi assisteixin dos t
desemborsat i Ia majoria de socis. En segona
.
, es
requerira Ia majoria del capital desemborsat. ------------------ ------------L'adopci6 d'acords de Ia Junta General Extraordinaria exigira,
en primera convocat6ria, el vot favorable dels dos ter9os del capital
desembossat i del nombre de socis. En segona convocat6ria, els
acords es prendran per majoria de socis i Ia meitat del capital
des emboss at. ------------------------------------------------------------------------
Article
17e.- Les
Juntes
Generals,
Ordinaries
o
Extraordinaries,
s'entendran
validament constitu"ldes
sense
convocat6ria previa, quan estigui present Ia totalitat del capital
desembossat i, els socis, per unanimitat, decideixin celebrar-les. En
aquest cas, es co.nstituira en Junta Universal de socis. -------------------
Article 18e.- Correspondra a Ia Junta General Ordinaria el

nomenament del Presid ent i Secretari de Ia Junta General de Ia
Societat, aixi com el de I'Administrador Unic i del Gerent o Gerents,
en el seu cas. ------------------------------------------------------------------------
TIT 0 L VI
Administraci6 i Gerencia.
Article 19e.- La gesti6, administrad6 i representaci6 de Ia

Societat, correspondra a I'Administrador Unic. -----------------------------La Societat podra nomenar un o mes Gerents i/o Directors, els
quais rebran els apoderaments que decideixi Ia Junta General
Ordinaria.------------------------------------------------------------------------------Article 20e. A I'Administrador Unic li correspondra Ia
representaci6 de Ia Societat, en judici o fora d'ell, tenint les mes
amplies facultats per a administrar i gestionar Ia Societat i els
negocis de Ia mateixa. Sera l'encarregat de fer complir els acords de
les Juntes Generals de Ia Societat. --------------------------------------------
T [ T 0 L VII
Article 21 e.- L'exercici social comen9ara el primer de gener i

acabara el trenta u de desembre de cada any. Per excepci6, el
primer exercici social comen9ara en Ia data d'inscripci6 de Ia
Societat en el Registre, acabant el trenta u de desembre del mateix
any. ------------------------------------------------------------------------------------Article 22e.- Cada any, I'Administrador Unic formulara el
Balan9, amb el compte de perdues i guanys, proposara Ia distribuci6
o no de beneficis, i presentara una Memoria de l'exercici tan cat al
trenta u de desembre, devent esser sotmesos a l'aprovaci6 de Ia
Junta General de. Ia Societat. ----------------------------------------------------
Article 23e.- Els beneficis nets obtinguts en cada exercici es

distri bu iran com segue ix: ---------------------------------------------------------23.1.- El deu per cent es destinara a constituir Ia reserva legal ,
acumulable fins que el seu import arribi, com a minim, al deu per
cent del capital desembossat. ----"'"----------------------------------------------
23.2- Els beneficis restants, si existeixen, per acord de Ia Junta

General de Ia Societat, seran, en el seu cas, repartits entre els socis,
en proporci6 a llurs respectives participacions. -----------------------------
T [ T 0 L VIII
Dissoluci6. Jurisdicci6.
Article 24e.- Es dissoldra Ia Societat: --------------------------------24.1- Per les causes legals que determinen Ia dissoluci6. --------
24.2.- Per acord de Ia Junta General Extraordinaria. ---------------

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I
Article 25e.~ Totes les questions que pugui

tre
els socis, entre aquests i Ia Societat, o
~
e a i
I'Administrador Unic, respecte a Ia interpretaci6, ap .s aJ~ ~ cuci6
dels presents Estatuts o respecte dels drets i obligacions que,
respectivament, els corresponguin, seran sotmesos a Ia Jurisdicci6
Ordinaria dels Tribunals Andorrans, llevat poder acudir a Ia
Jurisdicci6 del domicili del soci estranger, a elecci6 de Ia part mes
d iIig en t. ---------------------------------------------------------------------------------
Andorra Ia Vella, quatre de febrer de dos mil quatre. ---------------
Jose}} Estafiol i Cor11ella

Notari
NO PROTOCOL:
DATA FIRMA:
2392
vint-i-vuit de seternbre de l'any dos mil set.
DONACI6
ATORGANTS :
Higini CIERCO NOGUER i Jirnena CIERCO MARTINEZ.
:\\'.Cons!' II d'Enropa. 111ill 1.
1.\ .ln - 'Jtolilon XO I Z XO- Fa\ XO I Z HI
Cambra de No1aris
Principal d'Andorra
~-~~~~u co~-~E_l.i:A=Notari
Av. Consell d'Euro pa, num. 13, 2n.

Andorra La Vella
____
--'T::::.eL:JJ_0_12....U_ax_8_0 _12_8_1
NUMERO DOS MIL TRES-CENTS NORANTA-DOS

DONACIO
A Andorra Ia Vella, el dia vint-i-vuit de setembre de l'any dos
I!
mil set.-------------------------------------------------------------------------------Davant meu, Josep ESTANOL i CORNELLA, Notari del

Pri nci pat d 'Andorra, ---------------------------------------------------------------------------------------------- COMPARE IX EN : -------------------------------
* D'una part, el senyor Higini CIERCO NOGUER, nascut el

24 de maig de 1958, casat sota el regim economic de separaci6 de
bens -segons afirma-, de nacionalitat andorrana, titular del
passaport n(tmero 5915, i vel de Ia present vila, amb domicili al
Carrer Ia Creu Grossa, numero 31, xa let Cierco. ------------------------INTERVE en nom i interes propis. -------------------------------------
* I d'altra part, l'esposa de !'anterior, Ia senyora Maria del

Car~nen MARTINEZ GRIMA, nascuda el 26 de mar9 de 1970, de
nacionalitat andorrana, titular del passaport numero 29237 i del seu

mateix ve'lnatge i domicili. ----------------------------------------------------INTERVE, en exercici de Ia patria potestat, en nom i
representaci6 de Ia seva filla menor Jimena CIERCO MARTINEZ,
A/\0 3l t1 478
1/6
nascuda el dia 12 dels corrents, de nacionalitat andorrana, titular

del passaport numero 003667 5. ______________________________________ .. _______ _
Conec els compareixents. --------------..-------------------------------Ten en, a judici meu i en les qualitats en que intervenen, Ia
capacitat legal necessaria per a aquest acte, i ---------------------------
------------------------------------ ~ )( f' ()
f)
E: ~ : -------------------------------
A.- Que el senyor Higini CIERCO NOGUER es propietari de

DEU (1 0) garticipacions, concretament les numeros 71 al 80,
arnbdues incloses, de "CIERCO MARTiNEZ 2 2003, S.L. (C.M. 2,
SL)", societat constitu-lda en escriptura per mi autoritzada el dia 1
d'abril de 2004, amb el nurnero 896 de protocol; inscrita al Registre
de Societats el dia 2 d'abril de 2004 amb el numero 11074, al Llibre
S-140, Foli s 289-296 i domiciliada a Ia present vila, Carretera de Ia
Comella, nCrmero 1'1, Edifici Cierco. -----------------------------------------Aquestes participacions representen, en conjunt, el deu per
cent (1 0%) del capital social, essent en valor nominal de
cadascuna d'elles SEI>CANTA EUROS (60.- ). --------------------------TiTOL.--------------------------------------------------------------------------
Li pertanyen per haver-les subscrites en l'escriptura de

con stituci6 de Ia societa t. ------------------------------------------------------Carreg ues i gravamens.-~--------------------------------- -- -- ---- ------ -
Afirma Ia part propietaria que les participacions socials s6n
lliures d'embargaments, carregues o gravamens.-----------------------Valor.- Els atribueix !'equivalent al seu nominal, es a dir el
total de SIS-CE NTS EUROS (600.- ). ------------------------------------8 .- Que el senyor Higini CIERCO NOGUER desitja atorgar
fonaci6 de les esmentades participacions a favor de Ia seva filla
lnenor aqu i represen tad a.-------------------------------------------------------
/
I
AI respecte, en relaci6 al dret de preferent ad quisici6 que, en
cas de transmissi6 de participacions, el Reglament de Societats

mercantils reconeix als restants socis, aquests hi han renunciat en
el marc de Ia reuni6 de Ia Junta General Universal i Extraordinaria
\
\
de Ia societat celebrada el dia d'avui, segons consta en una

certificaci6 social lliurada per Ia compareixent senyora Maria del
\ Carmen MARTINEZ GRIMA en qualitat de Secretaria iamb el Vist i

'Piau del President de Ia pr6pia Junta, el tambe compa reixen t
senyor Higini CIERCO NOGUER, que em remeten i jo protocollitzo
am b I'e scrip tu ra .---------------------------------.. -------------------------------C.- I volent formalitza r Ia donaci6, els compareixents, en les
ualitats en que intervenen i de llur espontania i lliure voluntat-------
-\------------------------------ ~ T () R c;
lJ
E ~ : -----------------------------
1.- El senyor Higini CIERCO NOGUER dona a Ia seva filla

me nor, Jimena CIERCO MARTINEZ, les DEU (1 0) participacions
de "CIERCO MARTiNEZ 2 2003, S.L. (C .M. 2, SL)" ressenyades a
AJ\0314479
3/6
Ia part expositiva, franques i lliures de carregues o gravamens,

amb tots els drets i obligacions a elles i"nherents. ------------------------11.- La donataria, representada per Ia seva mare i amb
l'assentiment de l'altre progenitor -el propi clonador- accepta Ia
donaci6. -----------------------------------------------------------------------------111.- El donador transfereix a Ia donataria el domini de les
participacions objecte de Ia present i li d6na quasi-possessio dels
drets inherents a les mateixes. ----------------------------------------------IV.- Per a Ia resoluci6 d'eventuals discrepancies i ql"lestions
litigioses que poguessin derivar-se del contingut del present
instrument, les parts se sotmeten, formalment i expressa, a Ia
jurisdicci6 exclusiva dels Tribun als Andorrans. ---------------------------0 EC LARAC I0 N S F ISCALS. --------------------------------------------
Afirmen els co mpareixents que Ia present transmissi6 no esta

subjecta
als
immobiliaries
impostos
i
sobre
les
sobre
transmissions
plusvalues
en
les
patrimonials
transmissions
patrimonials immobiliaries, ates que no es dona el fet generador

co ntemplat en els articles 3.- 2 a) de les Lleis reguladores dels
mate ixo s. ----------------------------------------------------------------------------ADVERTIMENTS I RESERVES. ---------------------------------------
He fet als compareixents les reserves i els advertiments

leg aIs, es pecia Imen t: --------------------------------------------------------------
Cambra de Notaris
Principal d'Andorra
- Els relacionats amb el caracter gratun del negoci juridic

atorgat en Ia present. ------------------------------------------------------------- Els derivats del que disposa !'article 7.6 del Reglament de
/locietats Mercantils, referent a Ia comunicaci6 a Govern dels actes
I
1
/
!
Ie transmissi6 i gravamen per a Ia seva inscripci6 en el Registre de

Societats. ---------------------------------------------------------------------------I
.
/
- I finalment, d'acord amb l'establert en Ia Llei 15/2003, de 18
de desembre, de protecci6 de dades personals, els informo -i ho

'
accepten- que les seves dades s'incorporaran en els fitxers
Vi
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u
'
.,"'_,
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'
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.,
automatitzats existents en aquesta Notaria, on es conservaran amb

caracter confidencial sense perjudici de les remissions d'obligat
"
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com pI ime nt. -----------------------------------------------------------------------------------"--------- ATORGAMENT I AUTORITZACIO :-------------------
Aixi ho atorguen els compareixents, els quais despres

d'haver-los estat llegida Ia present escriptura i advertits del dret de
llegir-se-la ells mateixos, es ratifiquen en el seu contingut i firmen
amb rni, el Nota ri. -----------------------------------------------------------------De tot el qual, i d'haver escrit aquest instrument public en tres
fulls de paper d'(rs exclusiu per a documents notarials , jo, el Notari,
en dono fe. -------------------------------------------------------------------------Hi ha les firmes dels compareixents. ---------------------------------Signat = Josep Estanol = rubricaL------------------------------------Hi lla el segell de Ia Notaria.---------------------------------------------
AA0314480
5/6
Es copra conforme al seu original que, sota el numero al

principi indicat, obra en el meu protocol d'enguany, al qual em
remeto i fotocopia del document amb ell protocol.litzat i, requerit, Ia
lliurq en tres fulls de paper d'us exclusiu per a documents notarials,
numeros AA0314478 i els dos correlatius egOents, mecanografiats
a dues cares que signa, firma, rubrico i gello a Andorra Ia Vella,
l'u d'octubre de l'any dos mil set, de que ono fe.
La infrascrila, senyora Maria del Carmen MARTINEZ GRIMA,

Secre taria cle Ia Junta General de Ia societal mercanlil andorrana
"CIERCO MAr~TINEZ 2 2003, S.L. (C.M . 2, SL)" inscrita al Registre de
Societats el eli a 2 d'abril de 2004 amb el nt:nnero 11074
C E R T IF I C 0:
Que el marc de Ia reuni6 de Ia Junta General Universal i

Extraordin aria de Ia societal celebracla el dia 28 de setembre de 2007 i
davant Ia intenci6 manifestada pel soci senyor Higini CIERCO
NOGUER cl 'atorgar clonaci6 de OEU (1 0) participacions -numeros 71
al 80- de Ia companyia a favor de Ia seva filla Jimena CIERCO
MARTINEZ, menor d'edat, els restants socis han renunciat a exercitar
el dret de preferent adquisicio que els reconeix el vigent Reglament de
Societats mercantil s.
I perque consti on convingui, lliuro Ia present Certificaci6 el mateix

dia 28 de setembre de l'any 2007, amb el Vist i Piau del President de
Ia pr6pia Junta i a Ia vegada Admin istraclor Unic.
-~Piau
El President
( r. Higini CIERCO NOG UER)
Josep ESTANOL i CORNELLA, Notari del

Principat d'Andorra, CERTIFICO: Que Ia fotoc6pia
que figura al dors coincideix arnb el seu original
protocol.litzat arnb el n(unero OS MIL TRESeu protocol del
CENTS NORANTA-DOS del
corrent any. ------------------------Andorra Ia Vella, 1'1 d'octubr
EXHIBIT C
Consulla d'una soc ietal
P;'rg irw I de 2
Fitxa d'una socictat: sods

La nota sim ple es de ca racter infonnatiu, i no dona fe del contin gut del Registrc .
Identificador de Ia societat
700766-V BANCA PRIVADA D'ANDORRA, S.A.

l {epr<" ~<' lll:llll s
I :m 1>:1 rg:llllt ' ll l s
I ) omlcili
\c111 11:11 lli<'I"C:I
Nom del soci
.:g: I
T ipu s de soci
Data d' a lta Quant.accion s
NOGU ER [NRIQUEZ,ROSER
02 Soci
3/02/94
1.469
"-
CIERCO NOGUER,RAMON
02 Soci
3/0 2/94
l.tl68
:rv~
" ..
FARGUELL ADELLACH,ANTONI
02 Soci
10/06/98
1. 339
7J~
, - ...
PALLAS GON ZALEZ,JUAN
02 Soci
6/10/98
660
:rv~
" ..
SANTURE ALDOSA,ADOLF
02 Soci
6/10/98
1.167
...~,
... FONT RIUDEUI3AS,FERRAN
02 Soci
6/10/98
467
:Q~
" .
02 Soci
6/ 10/98
467
0 2 Soci
6/10/98
467
:r:l..
POL COMA,MARIA
..~,. FONT POL, FERRAN

..
"
:g~
" ..
RIBERAYGUA ESTEVE,BONAVENTURA
02 Soci
6/10/98
1.400
:rv~
" ..
RI BERAYGUA SASPLUGAS,ANTONI
02 Soci
6/10/ 98
163
03 Soci proinclivis
7/10/98
600
02 Soci
19/01/99
528
02 Soci
19/01/99
2.587
..~,... PALLAS GONZALEZ,JUAN
.." ... BALLABR IGA ORUS,CONCEPC IO

9'
.."~,... MIQUEL PRATS,JUAN PABLO
-
.:g:..
"
IUBERAYGUA SASPLUGAS,I30NAVENTURA
02 Soci
2 1/09/04
350
'b)~
, - ...
SUCCESSORS D'HJGINI CIERCO GARCIA, S.A.
02 Soci
2 1/09/04
'18.461
"
PADILLA BALLABRIGA,JOSEPA
02 Soci
5/10/04
422
02 Soci
20/06/06
602
02 Soci
20/06/06
797
02 Soci
15/05/08
1. 200
02 Soci
26/05/08
1.200
.:g:..
.~,.... PALLAS VILADOMAT, FRANCESC

.."~,... BPA GESTIO, SAU
.."~,... ZAMORA 130NET,MARIA IMMACULADA
:rv~
" ..
ZAMORA 130NET,MELANI A
!>;\gina 2 de 2
Consulta d'unn soc ieta l
- c - --
-- - Nom del soci
Tipus de soci
Date~ d'alte~
Quant.accion s
02 Soci
26/05/08
1.200
,;!;)~ S/\NTURE CANTURRI,/\NNA

,-"
02 Soci
1/07/08
117
.. ... SANTURE C/\NTURRI,MARI/\ MERCE
02 Soci
1/07/081
11 7
~)~
,-"
PALL/\S VIL/\DOMAT,FRANCESC
03 Soci proindivis
19/10/101
~~..
PALL/\S VILADOMAT,JOSEP
03 Soci proindivis
19/10/10
.r;)'... PALLAS VILADOMAT,JORDI
03 Soci proindivis
19/10/10
~~..
03 Soci proindivis
19/10/10
03 Soci proindivis
19/10/10
0 2 Soci
15/02/11
642
02 Soci
15/02/11
621
02 Soci
20/07I 12
02 Soci
22/04/ 13
20
02 Soci
11/09/13
1.468
...
ZAMOR/\ BONET,ANN/\ MARl/\
f/
PALL/\5 VILADOM/\T, EMILIA
..r;)'... P/\LL/\S VILADOMAT, SONI/\

..r;)'... /\RMENGOL P/\L,JOAN
prJ~ ARMENGOL VIL/\,ANTONI
..
..r;)'... 1-/\RGUELL BAR/\TAU,MERCE
... . /\RMENGOL SOLDEVILA, ER ICA
..
~
f/
~
"'f):)~
,-"
CIERCO MARTINE Z 2 2003, S. L.
EXHIBIT 2

13464
Federal Register/Val. 80, No. 49/Friday, March 13, 2015/Notices
Issued in Washington, DC, on March 10,

2015.
Ron Hynes,
Director of Technical Oversight.
[FR Doc. 2015-05750 Filed 3-12-15; 8:45am)
BILLING CODE 4910-06-P
Estimated Annual Burden Hours:

64,971.
Dawn D. Wolfgang,
Treasury PRA Clearance Officer.
[FR Doc. 2015-05739 Filed 3-12-15; 8:45am]
BILLING CODE 483o-01-P
DEPARTMENT OF THE TREASURY
Submission for OMB Review;

Comment Request
Notice of Finding That Banca Privada

d' Andorra Is a Financial Institution of
Primary Money Laundering Concern
March 10, 2015.
The Department of the Treasury will

submit the following information
collection request to the Office of
Management and Budget (OMB) for
review and clearance in accordance
with the Paperwork Reduction Act of
1995, Public Law 104-13, on or after the
date of publication of this notice.
DATES: Comments should be received on
or before April13, 2015 to be assured
of consideration.
ADDRESSES: Send comments regarding
the burden estimate, or any other aspect
of the information collection, including
suggestions for reducing the burden, to
(1) Office of Information and Regulatory
Affairs, Office of Management and
Budget, Attention: Desk Officer for
Treasury, New Executive Office
Building, Room 10235, Washington, DC
20503, or email at OIRA Submission@
OMB.EOP.gov and (2) Treasury PRA
Clearance Officer, 1750 Pennsylvania
Ave. NW., Suite 8140, Washington, DC
20220, or email at PRA@treasury.gov.
FOR FURTHER INFORMATION CONTACT:
Copies of the submission(s) may be

obtained by calling (202) 927-5331,
email at PRA@treasury.gov, or the entire
information collection request may be
found at www.reginfo.gov.
Internal Revenue Service (IRS)
OMB Number: 1545-1002.
Type of Review: Reinstatement with
change of a previously approved
collection.
Title: Return by a Shareholder of a
Passive Foreign Investment Company or
Qualified Electing Fund.
Form: 8621.
Abstract: Form 8621 is filed by a U.S.
shareholder who owns stock in a foreign
investment company. The form is used
to report income, make an election to
extend the time for payment of tax, and
to pay an additional tax and interest
amount. The IRS uses Form 8621 to
determine if these shareholders have
correctly reported amounts of income,
made the election correctly, and have
correctly computed the additional tax
and interest amount.
Affected Public: Private Sector:
Businesses or other for-profits.
On March 6, 2015, the Director of

FinCEN found that reasonable grounds
exist for concluding that Banca Privada
d'Andorra (''BPA") is a financial
institution operating outside of the
United States of primary money
laundering concern. The Director
considered the factors listed below in
making this determination.
SUPPLEMENTARY INFORMATION:
II. The History ofBPA and Jurisdictions

of Operation
BPA is one of five Andorran banks
and is a subsidiary of the BPA Group,
a privately-held entity. Founded in
1962, BPA is the fourth largest bank of
the five banks in Andorra and has 1. 79
billion euro in assets. The bank has
seven domestic branches in Andorra
and five foreign branches that operate in
Spain, Switzerland, Luxembourg,
Panama, and Uruguay. BPA has fewer
domestic and foreign branches than the
other major banking groups in Andorra.
EPA's Panama branch ("BPA Panama")
is licensed as an offshore bank by the
Superintendecia de Bancos de Panama,
which is the bank regulator for the
Panamanian government. BP A has
correspondent banking relationships in
the major North American, European,
and Asian financial centers. At the time
of this Finding, BP A has four U.S.
correspondent accounts.
I. Statutory Provisions
On October 26, 2001, the President
signed into law the Uniting and
Strengthening America by Providing
Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001 (the
"USA PATRIOT Act"), Public Law 10756. Title III of the USA PATRIOT Act
amends the anti-money laundering
provisions of the Bank Secrecy Act
("BSA"), codified at 12 U.S.C. 1829b, 12
U.S.C. 1951-1959, and 31 U.S.C. 53115314, 5316-5332, to promote the
prevention, detection, and prosecution
of international money laundering and
the financing of terrorism. Regulations
implementing the BSA appear at 31 CFR
Chapter X.
Section 311 of the USA PATRIOT Act
("Section 311"), codified at 31 U.S.C.
5318A, grants the Secretary of the
Treasury ("the Secretary") the authority,
upon finding that reasonable grounds
exist for concluding that a foreign
jurisdiction, financial institution, class
of transaction, or type of account is of
"primary money laundering concern,"
to require domestic financial
institutions and financial agencies to
take certain "special measures" to
address the primary money laundering
concern. The Secretary has delegated
this authority under Section 311 to the
Director of FinCEN.
III. The Extent to Which BPA Has Been

Used To Facilitate or Promote Money
Laundering
FinCEN has found that reasonable
grounds exist for concluding that
several officials of EPA's high-level
management in Andorra have facilitated
financial transactions on behalf of
Third-Party Money Launderers
("TPMLs") providing services for
individuals and organizations involved
in organized crime, corruption,
smuggling, and fraud. Criminal
organizations launder their proceeds
through the international financial
system. These organizations often
encounter obstacles in achieving direct
access to financial institutions
internationally and in the United States
because of their illicit activities. To
obtain access to financial institutions,
some criminal organizations use the
services of TPMLs, including
professional gatekeepers such as
attorneys and accountants. TPMLs
engage in the business of transferring
funds on behalf of a third party,
knowing that the funds are involved in
illicit activity. These TPMLs provide
access to financial institutions and lend
an aura of legitimacy to criminal actors
who use the TPMLs' services. Some
TPMLs explicitly market their services
as a method for criminal organizations
Financial Crimes Enforcement

Network ("FinCEN"), Treasury.
ACTION: Notice of Finding.
AGENCY:
This document provides

notice that, pursuant to the authority
contained in the USA PATRIOT Act, the
Director of FinCEN found on March 6,
2015 that reasonable grounds exist for
concluding that Banca Privada
d' Andorra ("BPA") is a financial
institution operating outside of the
United States of primary money
laundering concern.
DATES: The finding referred to in this
notice was effective as March 6, 2015.
SUMMARY:
FinCEN, (800) 949-2732.

to reduce transparency and circumvent
financial institutions' anti-money
laundering ("AML")/countering the
financing of terrorism ("CFT") controls.
TPMLs provide access to the
international financial system for
criminal organizations through the
TPMLs' relationships with financial
institutions.
Financial institutions that facilitate
third-party money laundering activity
allow criminals to circumvent AMLI
CFT controls both in the United States
and internationally, and, thus, provide a
gateway for undermining financial
integrity. TPMLs use a wide variety of
schemes and methods to infiltrate
financial institutions. These schemes
and methods include using illicit shell
and shelf corporations, layering
financial transactions, creating and
using false documentation, and exerting
improper influence on employees in
financial institutions or on government
officials. A shell company is an entity
that is formed for the purpose of holding
property or funds and does not itself
engage in any significant business
activity. A shelf corporation is an entity
that is formed and then placed aside for
years. The length of time that a shelf
corporation has been in existence adds
legitimacy to the entity and makes it a
prime vehicle for money laundering.
A. EPA Facilitated Financial
Transactions for TPMLs Involving the

Proceeds of Organized Crime,
Corruption, Human Trafficking, and
Fraud
FinCEN has found that reasonable
grounds exist to support the following
points: Several of EPA's high-level
management have facilitated financial
transactions on behalf of TPMLs
providing services for individuals and
organizations involved in organized
crime, corruption, human trafficking,
trade-based money laundering, and
fraud. High-level management at BP A
maintained close relationships with
these TPMLs. Based on those
relationships, TPMLs promoted their
services to other illicit actors and relied
on BPA to provide access to the
financial system for criminal
organizations. TPMLs successfully used
BPA to facilitate money laundering
activity because the Bank's weak AMLI
CFT controls allowed TPMLs to conduct
this high-risk banking activity without
detection, and the TPMLs were able to
establish close relationships with
complicit bank personnel who
facilitated illicit transactions.
From 2011 to February 2013, HighLevel Manager A at BP A in Andorra
provided substantial assistance to
Andrey Petrov, a TPML ("TPML 1")
working for Russian criminal

organizations engaged in corruption.
Petrov facilitated several projects on
behalf of transnational criminal
organizations. Petrov used the proceeds
of transnational organized crime to bribe
local officials in Spain. Petrov secured
beneficial zoning rights and contracts
from a local official. After Petrov's
application for a line of credit at a
Spanish bank was rejected, High-Level
Manager A ensured that Petrov could
obtain a line of credit from another
Spanish bank and that the application
would not be perceived as suspicious.
Petrov arranged for High-Level Manager
A to fly to Russia to meet with
transnational organized crime figures.
High-Level Manager A created
accounts at BP A that facilitated false
invoicing to disguise the origin of illicit
funds. In addition, a Russian
businessman known to be connected to
transnational criminal organizations
worked with BPA, including High-level
Manager A, to establish front companies
and foundations used to move funds
believed to be affiliated with organized
crime. Both Petrov and the Russian
businessman relied on BPA to facilitate
the laundering of the organized crime
proceeds and maintained large bank
accounts with BPA. In February 2013,
Spanish law enforcement arrested
Petrov and several associates for
laundering approximately 56 million
euro. Petrov is suspected to have links
to Semion Mogilevich, one of the FBI's
ten "most wanted" fugitives.
In addition to EPA's facilitation of
illicit financial transactions by Petrov,
in a separate scheme, a Venezuelan
TPML ("TPML 2") and his network
relied on BP A to deposit the proceeds
of public corruption. This money
laundering network worked closely with
high-ranking government officials in
Venezuela, resident agents in Panama,
and an Andorran lawyer to establish
Panamanian shell companies. The
money laundering network owned
hundreds of shell companies and
engaged in a wide variety of business for
illicit profit. This network was well
connected to Venezuelan government
officials and relied on various methods
to move funds, including false contracts,
mischaracterized loans, over- and
under-invoicing, and other trade-based
money laundering schemes.
TPML 2 had a relationship with HighLevel Manager B at BP A. TPML 2 gave
High-Level Manager B false contracts to
support transactions purported to be on
behalf of Venezuelan public institutions
including Petroleos de Venezuela S.A.
("PDVSA"), the public oil company of
Venezuela. In some instances, these
contracts did not list a customer for the
13465
services. High-Level Manager B's

reliance on these contracts
demonstrated transaction monitoring
and due diligence failures. Also, HighLevel Manager B coordinated the
opening of a shell company on behalf of
the Venezuelan TPML. High-Level
Manager B worked with High-Level
Manager A on the illicit Venezuelan
transactions. BPA facilitated the
movement of approximately $2 billion
through these shell company accounts
maintained at BPA. Between January
2011 and March 2013, BP A facilitated
the movement of at least $50 million in
send and receive transactions that were
processed through the United States in
support of this money laundering
network. In 2014, BPA continued to
facilitate the movement of funds related
to this scheme through the U.S.
financial system. Overall, BP A
facilitated the movement of $4.2 billion
in transfers related to Venezuelan
money laundering.
In addition to EPA's facilitation of
illicit financial transactions by Petrov
and Venezuelan money launderers, from
2011 to October 2012, High-Level
Manager C at BP A accepted bribes to
process bulk cash transfers for TPML
Gao Ping ("TPML 3"). Ping acted on
behalf of a transnational criminal
organization engaged in trade-based
money laundering and human
trafficking and established relationships
with Andorran banks to launder money
on behalf of his organization and
numerous Spanish businesspersons.
Through his associate, Ping bribed
Andorran bank officials to accept cash
deposits into less scrutinized accounts
and transfer the funds to suspected shell
companies in China. One of Ping's key
bank executives was High-Level
Manager C. High-Level Manager C and
another bank manager at BPA processed
approximately 20 million euro in cash
used to fund wire transfers sent to
Ping's accounts in China. Spanish law
enforcement arrested Ping in September
2012 for his involvement in money
laundering.
B. EPA's Weak AML Controls Attract
TPMLs and Allow Its Customers To
Conduct Transactions Through the U.S.
Financial System That Disguise the
Origin and Ownership of the Funds
EPA's failure to conduct adequate due
diligence on customer accounts and its
provision of high-risk services to shell
companies make it highly attractive and
well known to TPMLs. TPMLs worked
on behalf of transnational criminal
organizations to facilitate the criminal
organizations' financial transactions
through BP A. In addition, TPMLs
reportedly coordinated multi-million

13466
dollar deals related to Venezuelan

corruption and represented that
connections with BPA would facilitate
these transactions.
For example, a TPML ("TPML 4"),
who has worked with the Sinaloa cartel,
facilitated the transfer of bulk cash
derived from narcotics trafficking in the
United States and facilitated financial
transactions involving the proceeds of
other crimes. TPML 4 intentionally
bolstered connections with BP A to
attract money laundering clients and
requested that clients send smaller
transfers through accounts at other
institutions and to only use accounts at
BPA for large transactions. In
communications with co-conspirators,
TPML 4 advertised a relationship with
BPA in attempts to attract potential
money laundering deals. TPML 4 told
clients that this relationship with BPA
and other government officials would
ensure that their transactions would not
be scrutinized by the financial
community. In addition, TPML 4 also
marketed services to potential clients by
providing specific wire transfer
instructions for accounts at BPA.
TPML 4 used many methods to avoid
detection by law enforcement, including
planning to increase operations during
the U.S. government shutdown in 2013.
TPML 4 used many Panamanian,
Spanish, and Swiss shelf corporations to
attract clients. Several of these shelf
corporations had bank accounts,
including at BPA.
EPA's failure to monitor transactions
for apparent red flag activity attracts
TPMLs. Many third-party money
laundering transactions conducted
through BP A lack an apparent business
purpose and would be identified as high
risk by a bank with sufficient AML/CFT
controls. For example, BPA processed
millions of U.S. dollar transactions that
listed EPA's Andorran address for the
originator's or beneficiary's address.
Although there may be rare occasions
when use of the bank's address as a
bank customer's address of record is
legitimate, the processing of a high
percentage of transactions not
containing accurate customer address
information indicates failure to conduct
sufficient due diligence on a customer,
failure to adequately monitor
transactions, or possible complicity in
money laundering by disguising the
origin of funds. BP A also attracts TPMLs
by knowingly providing services to shell
and shelf companies and unlicensed
money transmitters. As noted above,
TPMLs rely on shell and shelf
companies to shield the identities of
their clients engaged in criminal
activity. EPA's facilitation of this highrisk business allows TPMLs to obscure
the beneficial ownership of these

accounts.
BPA accesses the U.S. financial
system through direct correspondent
accounts held at four U.S. banks.
Between approximately 2009 through
2014, BPA processed hundreds of
millions of dollars through its U.S.
correspondents. These transactions
contained numerous indicators of highrisk money laundering typologies,
including widespread shell company
activity, unlicensed money transmitters,
and other high-risk business customers.
For example, BPA processed tens of
millions of dollars on behalf of
unlicensed money transmitters through
one U.S. correspondent. The U.S.
correspondent requested that BP A sign
an agreement to discontinue processing
these transactions through its account.
After these concerns arose, the U.S.
correspondent closed EPA's account.
In addition, 62 percent of EPA's
outgoing transactions through one U.S.
correspondent bank involved only four
high-risk customers. These customers,
deemed high-risk by the U.S.
correspondent bank, included a shell
company, an Internet business, and two
non-bank financial institutions.
Between approximately 2007 and 2012,
BPA also used its U.S. correspondents
to send or receive wire transfers totaling
more than $50 million for Panamanian
shell companies that share directors,
agents, and the same address. These
transfers involved large, round dollar
amounts and did not specify a purpose
for the transactions. When U.S.
correspondents requested additional
information, BPA either failed to
respond or provided extremely limited
information.
IV. The Extent to Which BPA Is Used
for Legitimate Business Purposes
It is difficult to assess on the
information available the extent to
which BPA is used for legitimate
business purposes. BPA provides
services in private banking, personal
banking, and corporate banking. These
services include typical bank products
such as savings accounts, corporate
accounts, credit cards, and financing.
BPA provides services to high-risk
customers including international
foreign operated shell companies,
businesses likely engaged in unlicensed
money transmission, and senior foreign
political officials. Because of the
demonstrated cooperation of high level
management at BPA with TPMLs, EPA's
legitimate business activity is at high
risk of being abused by money
launderers.
V. The Extent to Which This Action Is

Sufficient To Guard Against
International Money Laundering and
Other Financial Crimes
FinCEN's March 13, 2015 proposed
imposition of the fifth special measure,
pursuant to 31 U.S.C. 5318A(b)(5),
would guard against the international
money laundering and other financial
crimes described above directly by
restricting the ability of BP A to access
the U.S. financial system to process
transactions, and indirectly by public
notification to the international
financial community of the risks posed
by dealing with BP A and TPMLs.
Dated: March 6, 2015.
Jennifer Shasky Calvery,

Director, Financial Crimes Enforcement
Network.
[FR Doc. 2015-05911 Filed 3-12-15; 8:45am]
Internal Revenue Service

Proposed Collection; Comment
Request for Forms 9779, 9783, 9787,
and 9789
AGENCY: Internal Revenue Service (IRS),
Treasury.
ACTION: Notice and request for
comments.
SUMMARY: The Department of the
Treasury, as part of its continuing effort
to reduce paperwork and respondent
burden, invites the general public and
other Federal agencies to take this
opportunity to comment on proposed
and/ or continuing information
collections, as required by the
Paperwork Reduction Act of 1995, Pub.
L. 104-13 (44 U.S.C. 3506(c)(2)(A)).
Currently, the IRS is soliciting
comments concerning Forms 9779,
9783, 9787, and 9789, Electronic
Federal Tax Payment System (EFTPS).
DATES: Written comments should be
received on or before May 12, 2015 to
be assured of consideration.
ADDRESSES: Direct all written comments
to Christie Preston, Internal Revenue
Service, Room 6129, 1111 Constitution
Avenue NW., Washington, DC 20224.
Requests for additional information or

copies of the forms and instructions
should be directed to LaNita Van Dyke,
Internal Revenue Service, Room 6517,
1111 Constitution Avenue NW.,
Washington, DC 20224, or through the
internet at Lanita. VanDyke@irs.gov.
EXHIBIT 3
EXHIBIT 4
Government of Andorra
Ministry of Foreign Affairs
NV US. 13/14
VERBAL NOTE
The Ministry of Foreign Affairs of the Principality of Andorra sends its compliments to the Consulate
General of the United States of America and has the honor to refer to the Verbal Note 151/14 of the
Consulate, in which a document relating to money laundering and the fight against terrorism financing
was attached.
In this regard, the Ministry of Foreign Affairs of the Principality of Andorra has the honor to enclose
herewith the document in response to said Verbal Note, of 26 August 2014.
The Ministry of Foreign Affairs of the Principality of Andorra appreciates the opportunity to express to
the Consulate General of the United States of America the assurances of its highest consideration.
Andorra la Vella, 22 September 2014
CONSULATE GENERAL OF THE UNITED STATES OF AMERICA

BARCELONA
EXHIBIT 5

:A.'.',_ "''-'--"'"}
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13304
Federal Register/Val. 80, No. 49/Friday, March 13, 2015/Proposed Rules
TABLE E-1-FILTER LENS SHADE

NUMBERS
FOR
PROTECTION
AGAINST RADIANT ENERGY-Contin-
ued
Welding operation
Shielded metal-arc welding 3/16-,
7h2-, %-inch diameter electrodes.
5/16-, %-inch diameter electrodes ....
Atomic hydrogen welding .. .. .. .. .. .. .. .. .
Carbon-arc welding .. ...... ..................
Soldering .. .... ... .... .. .... .. .. .. .. .. .. .. .. .. .... .
Torch brazing ...................................
Light cutting, up to 1 inch ............ ....
Medium cutting, 1 inch to 6 inches ..
Heavy cutting, over 6 inches ...........
Gas welding (light}, up to %-inch ....
Gas welding (medium}, %-inch to
112-inch.
Gas welding (heavy}, over 112-inch ..
Shade
No.
12.
14.
10-14.
14.
2.
3 or 4.
or 4.
4 or 5.
5 or 6.
4 or 5.
5 or 6.
3
6 or 8.
(2) Laser protection. (i) Employees

whose occupation or assignment
requires exposure to laser beams shall
be furnished suitable laser safety goggles
which will protect for the specific
wavelength of the laser and be of optical
density (O.D.) adequate for the energy
involved. Table E-2 lists the maximum
power or energy density for which
adequate protection is afforded by
glasses of optical densities from 5
through 8.
I. Statutory Provisions
On October 26, 2001, the President
Financial Crimes Enforcement Network signed into law the Uniting and
Strengthening America by Providing
31 CFR Part 101 0
Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001 (the
RIN 1506-AB30
"USA PATRIOT Act"), Public Law 10756. Title III of the USA PATRIOT Act
Imposition of Special Measure against
amends the anti-money laundering
Banca Privada d' Andorra as a
provisions of the Bank Secrecy Act
Financial Institution of Primary Money
("BSA"), codified at 12 U.S.C. 1829b, 12
Laundering Concern
U.S.C. 1951-1959, and 31 U.S.C. 53115314, 5316-5332, to promote the
AGENCY: Financial Crimes Enforcement
prevention, detection, and prosecution
Network ("FinCEN"), Treasury.
of international money laundering and
ACTION: Notice of proposed rulemaking.
the financing of terrorism. Regulations
SUMMARY: In a finding, notice of which
implementing the BSA appear at 31 CFR
is published elsewhere in this issue of
Chapter X. The authority of the
the Federal Register ("Notice of
Secretary of the Treasury {the
Finding"), the Director of FinCEN found "Secretary") to administer the BSA and
that Banca Privada d' Andorra ("BP A")
its implementing regulations has been
is a financial institution operating
delegated to the Director of FinCEN.
Section 311 of the. USA PATRIOT Act
outside of the United States that is of
("Section 311"), codified at 31 U.S.C.
primary money laundering concern.
5318A, grants the Director of FinCEN
FinCEN is issuing this notice of
the authority, upon finding that
proposed rulemaking ("NPRM") to
reasonable grounds exist for concluding
propose the imposition of a special
that a foreign jurisdiction, institution,
measure against BP A.
DATES: Written comments on this NPRM class of transaction, or type of account
is of "primary money laundering
must be submitted on or before May 12,
concern," to require domestic financial
2015.
institutions and financial agencies to
ADDRESSES: You may submit comments,
take certain "special measures" to
identified by 1506-AB30, by any of the
address the primary money laundering
following methods:
concern.
Federal E-rulemaking Portal:
http://www.regulations.gov. Follow the

instructions for submitting comments.
Include 1506-AB30 in the submission.
Mail: The Financial Crimes
Attenuation
Enforcement Network, P.O. Box 39,
Intensity, CW
maximum power
Vienna, VA 22183. Include 1506-AB30
Optical
density
Attenuation in the body of the text. Please submit
density
(watts/cm2)
factor
(0.0.}
comments by one method only.
Comments submitted in response to
10-2 ....................... .
5
105 this NPRM will become a matter of
10-1 ...................... ..
106 public record. Therefore, you should
6
1.0 ......................... ..
7
10 7 submit only information that you wish
10.0 ....................... ..
108
8
to make publicly available.
Inspection of comments: Public
Output levels falling between lines in comments received electronically or
this table shall require the higher optical through the U.S. Postal Service sent in
density.
response to a notice and request for
comment will be made available for
(ii) All protective goggles shall bear a
public review on http://
label identifying the following data:
www.regulations.gov. Comments
(A) The laser wavelengths for which
received may be physically inspected in
use is intended;
the FinCEN reading room located in
Vienna, Virginia. Reading room
(B) The optical density of those
appointments are available weekdays
wavelengths;
(excluding holidays) between 10 a.m.
(C) The visible light transmission.
and 3 p.m., by calling the Disclosure
[FR Doc. 2015-05521 Filed 3-12-15; 8:45am)
Officer at (703) 905-5034 (not a toll-free
call).
FOR FURTHER INFORMATION CONTACT: The
FinCEN Resource Center at {800) 7672825.
TABLE E-2-SELECTING LASER
SAFETY GLASS
II. Imposition of a Special Measure

Against BPA as a Financial Institution
of Primary Money Laundering Concern
A. Special Measure
As noticed elsewhere in this issue of
the Federal Register, on March 6, 2015,
the Director of FinCEN found that BPA
is a financial institution operating
outside the United States that is of
primary money laundering concern
("Finding"). Based upon that Finding,
the Director of FinCEN is authorized to
impose one or more special measures.
Following the consideration of all
factors relevant to the Finding and to
selecting the special measure proposed
in this NPRM, the Director of FinCEN
proposes to impose the special measure
authorized by section 5318A(b)(5) (the
"fifth special measure"). In connection
with this action, FinCEN consulted with
representatives of the Federal functional
regulators, the Department of Justice,
and the Department of State, among
others.
B. Discussion of Section 311 Factors
In determining which special
measures to implement to address the
primary money laundering concern,
FinCEN considered the following
factors.

Federal Register I Vol. 80, No. 49 I Friday, March 13, 2015 I Proposed Rules
1. Whether Similar Action Has Been or
Will Be Taken by Other Nations or
Multilateral Groups Against BPA
Other countries or multilateral groups
have not yet taken action similar to the
action proposed in this rulemaking that
would: (1) Prohibit domestic financial
institutions and agencies from opening
or maintaining a correspondent account
for or on behalf of BPA; and (2) require
certain covered financial institutions to
screen their correspondent accounts in
a manner that is reasonably designed to
guard against processing transactions
involving BPA. FinCEN encourages
other countries to take similar action
based on the information contained in
this NPRM and the Notice of Finding.
additional burden will be incurred by

U.S. financial institutions to be vigilant
in their suspicious activity monitoring
procedures. As explained in more detail
in the section-by-section analysis below,
financial institutions should be able to
leverage these current screening and
reporting procedures to detect
transactions involving BPA.
3. The Extent to Which the Proposed

Action or Timing of the Action Would
Have a Significant Adverse Systemic
Impact on the International Payment,
Clearance, and Settlement System, or on
Legitimate Business Activities of BP A
The requirements proposed in this
NPRM would target BPA specifically;
they would not target a class of financial
transactions (such as wire transfers) or
2. Whether the Imposition of the Fifth
a particular jurisdiction. BPA is not a
Special Measure Would Create a
major participant in the international
Significant Competitive Disadvantage,
payment system and is not relied upon
Including Any Undue Cost or Burden
by the international banking community
Associated With Compliance, for
for clearance or settlement services.
Financial Institutions Organized or
Additionally, it is difficult to assess on
Licensed in the United States
the information available the extent to
The fifth special measure proposed by which BPA is used for legitimate
this rulemaking would prohibit covered business purposes. BPA provides
financial institutions from opening or
services in private banking, personal
maintaining correspondent accounts for banking, and corporate banking. These
or on behalf of BPA after the effective
services include typical bank products
date of the final rule implementing the
such as savings accounts, corporate
fifth special measure. Currently, only
accounts, credit cards, and financing.
four U.S. covered financial institutions
BP A provides services to high-risk
maintain an account for BPA; therefore,
customers including international
FinCEN believes this action will not
foreign operated shell companies,
present an undue regulatory burden. As businesses likely engaged in unlicensed
a corollary to this measure, covered
money transmission, and senior foreign
financial institutions also would be
political officials. Because of the
required to take reasonable steps to
demonstrated cooperation of high level
apply special due diligence, as set forth
management at BPA with TPMLs, BPA's
below, to all of their correspondent
legitimate business activity is at high
accounts to help ensure that no such
risk of being abused by money
account is being used to provide
launderers. Given this risk, FinCEN
services to BPA. For direct
believes that any impact on the
correspondent relationships, this would legitimate business activities of BPA is
involve a minimal burden in
outweighed by the need to protect the
transmitting a one-time notice to certain US financial system. Moreover, the
foreign correspondent account holders
imposition of the fifth special measure
concerning the prohibition on
against BPA would not have a
processing transactions involving BP A
significant adverse systemic impact on
through the U.S. correspondent account. the international payment, clearance,
U.S. financial institutions generally
and settlement system.
apply some level of screening and,
4.
The Effect of the Proposed Action on
when required, conduct some level of
United States National Security and
reporting of their transactions and
Foreign Policy
accounts, often through the use of
commercially-available software such as
The exclusion of BPA from the U.S.
that used for compliance with the
financial system as proposed in this
economic sanctions programs
NPRM would enhance national security
administered by the Office of Foreign
by making it more difficult for money
Assets Control ("OFAC") of the
launderers, transnational criminal
Department of the Treasury and to
organizations, human traffickers, and
detect potential suspicious activity. To
other criminals to access the U.S.
ensure that U.S. financial institutions
financial system. More generally, the
are not being used unwittingly to
process payments for or on behalf of
would complement the U.S.
BPA, directly or indirectly, some
Government's worldwide efforts to
13305
expose and disrupt international money

laundering.
Therefore, pursuant to the Finding
that BPA is a financial institution
operating outside of the United States of
primary money laundering concern, and
after conducting the required
consultations and weighing the relevant
factors, the Director of FinCEN proposes
to impose the fifth special measure.
III. Section-by-Section Analysis for

Imposition of the Fifth Special Measure
A. 101 0.662(a)-Definitions
1. Banca Privada d'Andorra

Section 1010.662(a)(1) of the
proposed rule would define BP A to
include all domestic and international
branches, offices, and subsidiaries of
BPA wherever located.
Covered financial institutions should
take commercially reasonable measures
to determine whether a customer is a
branch, office, or subsidiary of BPA.
2. Correspondent Account
proposed rule would define the term
"correspondent account" by reference to
the definition contained in 31 CFR
1010.605(c)(1)(ii). Section
1010.605(c)(1)(ii) defines a
correspondent account to mean an
account established to receive deposits
from, or make payments or other
disbursements on behalf of, a foreign
bank, or to handle other financial
transactions related to the foreign bank.
Under this definition, "payable through
accounts" are a type of correspondent
account.
In the case of a U.S. depository
institution, this broad definition
includes most types of banking
relationships between a U.S. depository
institution and a foreign bank that are
established to provide regular services,
dealings, and other financial
transactions, including a demand
deposit, savings deposit, or other
transaction or asset account, and a
credit account or other extension of
credit. FinCEN is using the same
definition of "account" for purposes of
this rule as was established for
depository institutions in the final rule
implementing the provisions of section
312 of the USA PATRIOT Act requiring
enhanced due diligence for
correspondent accounts maintained for
certain foreign banks. 1
In the case of securities brokerdealers, futures commission merchants,
introducing brokers-commodities, and
investment companies that are open-end
companies ("mutual funds"), FinCEN is
, See 31 CFR 1010.605{c)(2)(i).

13306
diligence to all of its foreign

correspondent accounts that is
reasonably designed to guard against
processing transactions involving BP A.
As part of that special due diligence,
covered financial institutions must
notify those foreign correspondent
account holders that the covered
financial institutions know or have
3. Covered Financial Institution
reason to know provide services to BP A
that such correspondents may not
proposed rule would define "covered
provide BP A with access to the
financial institution" with the same
correspondent account maintained at
definition used in the final rule
the covered financial institution.
implementing the provisions of section
Covered financial institutions should
312 of the USA PATRIOT Act, 3 which
implement appropriate risk-based
in general includes the following:
procedures to identify transactions
An insured bank (as defined in
involving BPA.
section 3(h) of the Federal Deposit
A covered financial institution may
Insurance Act (12 U.S.C. 1813(h));
satisfy the notification requirement by
a commercial bank;
transmitting the following notice to its
an agency or branch of a foreign
foreign correspondent account holders
bank in the United States;
that it knows or has reason to know
a Federally insured credit union;
provide services to BP A:
a savings association;
Notice: Pursuant to U.S. regulations issued
a corporation acting under section
under Section 311 of the USA PATRIOT Act,
25A of the Federal Reserve Act (12
see 31 CFR 1010.662, we are prohibited from
u.s.c. 611);
establishing, maintaining, administering, or
a trust bank or trust company;
managing a correspondent account for or on
a broker or dealer in securities;
behalf of Banca Privada d'Andorra. The
regulations also require us to notify you that
a futures commission merchant or
an introducing broker-commodities; and you may not provide Banca Privada
d'Andorra or any of its subsidiaries with
a mutual fund.
access to the correspondent account you hold
4. Subsidiary
at our financial institution. If we become
aware that the correspondent account you
hold at our financial institution has
proposed rule would define
processed any transactions involving Banca
"subsidiary" as a company of which
Privada d'Andorra or any of its subsidiaries,
more than 50 percent of the voting stock we will be required to take appropriate steps
or analogous equity interest is owned by to prevent such access, including terminating
your account.
BPA.
A covered financial institution may,
B. 1010.662(b}-Prohibition on
for example, have knowledge through
Accounts and Due Diligence
transaction screening software that a
Requirements for Covered Financial
correspondent processes transactions for
Institutions
BP A. The purpose of the notice
1. Prohibition on Opening or
requirement is to aid cooperation with
Maintaining Correspondent Accounts
correspondent account holders in
preventing transactions involving BPA
Section 1010.662(b)(1) of the
proposed rule imposing the fifth special from accessing the U.S. financial
system. However, FinCEN would not
measure would prohibit covered
require or expect a covered financial
financial institutions from establishing,
institution to obtain a certification from
maintaining, administering, or
any of its correspondent account
managing in the United States any
holders that access will not be provided
correspondent account for or on behalf
to comply with this notice requirement.
ofBPA.
Methods of compliance with the notice
2. Special Due Diligence for
requirement could include, for example,
Correspondent Accounts To Prohibit
transmitting a one-time notice by mail,
Use
fax, or email. FinCEN specifically
solicits comments on the form and
As a corollary to the prohibition on
maintaining correspondent accounts for scope of the notice that would be
or on behalf of BPA, section
required under the rule.
The special due diligence would also
1010.662(b)(2) of the proposed rule
include implementing risk-based
would require a covered financial
procedures designed to identify any use
institution to apply special due
of correspondent accounts to process
2 See 31 CFR 1010.605(c)(2)(ii)-(iv).
transactions involving BP A. A covered
3 See 31 CFR 1010.605(e)(1).
financial institution would be expected
also using the same definition of
"account" for purposes of this rule as
was established for these entities in the
final rule implementing the provisions
of section 312 of the USA PATRIOT Act
requiring enhanced due diligence for
correspondent accounts maintained for
certain foreign banks. 2
to apply an appropriate screening

mechanism to identify a funds transfer
order that on its face listed BPA as the
financial institution of the originator or
beneficiary, or otherwise referenced
BP A in a manner detectable under the
financial institution's normal screening
mechanisms. An appropriate screening
mechanism could be the mechanism
used by a covered financial institution
to comply with various legal
requirements, such as the commercially
available software programs used to
comply with the economic sanctions
programs administered by OF AC.
A covered financial institution would
also be required to implement riskbased procedures to identify indirect
use of its correspondent accounts,
including through methods used to
disguise the originator or originating
institution of a transaction. Specifically,
FinCEN is concerned that BP A may
attempt to disguise its transactions by
relying on types of payments and
accounts that would not explicitly
identify BP A as an involved party. A
financial institution may develop a
suspicion of such misuse based on other
information in its possession, patterns
of transactions, or any other method
available to it based on its existing
systems. Under the proposed rule, a
covered financial institution that
suspects or has reason to suspect use of
a correspondent account to process
transactions involving BPA must take
all appropriate steps to attempt to verify
and prevent such use, including a
notification to its correspondent account
holder requesting further information
regarding a transaction, requesting
corrective action to address the
perceived risk and, where necessary,
terminating the correspondent account.
A covered financial institution may reestablish an account closed under the
rule if it determines that the account
will not be used to process transactions
involving BP A. FinCEN specifically
solicits comments on the requirement
under the proposed rule that covered
financial institutions take reasonable
steps to prevent any processing of
transactions involving BP A.
3. Recordkeeping and Reporting
Section 1010.662(b)(3) ofthe
proposed rule would clarify that
paragraph (b) of the rule does not
impose any reporting requirement upon
any covered financial institution that is
not otherwise required by applicable
law or regulation. A covered financial
institution must, however, document its
compliance with the requirement that it
notify those correspondent account
holders that the covered financial
institution knows, or has reason to

know, provide services to BPA, that
such correspondents may not process
any transaction involving BPA through
the correspondent account maintained
at the covered financial institution.
13307
less than $500,000,000 in assets and are considered to be small entities for
considered small entities. 5 Of the
purposes of the RFA. 9 The CFTC's
estimated 7,000 credit unions, 94
determination in this regard was based,
percent have less than $500,000,000 in
in part, upon the obligation of registered
assets. 6
FCMs to meet the capital requirements
Broker-dealers are defined in 31 CFR
established by the CFTC.
IV. Request for Comments
1010.100(h) as those broker-dealers
For purposes of the RF A, an
FinCEN invites comments on all
required to register with the Securities
introducing broker-commodities dealer
and Exchange Commission ("SEC").
aspects of the proposal to impose the
is considered small if it has less than
fifth special measure against BPA and
Because FinCEN and the SEC regulate
$35,500,000 in gross receipts
substantially the same population, for
specifically invites comments on the
annually.1 Based on information
following matters:
the purposes of the RF A, FinCEN relies
provided by the National Futures
1. The impact of the proposed special on the SEC's definition of small
Association ("NF A"), 95 percent of
measure upon legitimate transactions
business as previously submitted to the
introducing brokers-commodities
using BPA involving, in particular, U.S. Small Business Administration
dealers have less than $35.5 million in
("SBA"). The SEC has defined the term
persons and entities; foreign persons,
Adjusted Net Capital and are considered
"small entity" to mean a broker or
entities, and governments; and
to be small entities.
dealer that: "(1) had total capital (net
multilateral organizations doing
Mutual funds are defined in 31 CFR
worth plus subordinated liabilities) of
legitimate business.
1010.100(gg) as those investment
less than $500,000 on the date in the
2. The form and scope of the notice
companies that are open-end investment
prior fiscal year as of which its audited
to certain correspondent account
companies that are registered or are
financial statements, were prepared
holders that would be required under
required to register with the SEC.
pursuant to Rule 17a-5(d) or, if not
the rule;
Because FinCEN and the SEC regulate
required to file such statements, a
3. The appropriate scope of the
substantially the same population, for
broker or dealer that had total capital
proposed requirement for a covered
the purposes of the RF A, FinCEN relies
(net worth plus subordinated debt) of
financial institution to take reasonable
on the SEC's definition of small
less than $500,000 on the last business
steps to identify any use of its
business as previously submitted to the
day of the preceding fiscal year (or in
correspondent accounts to process
SBA. The SEC has defined the term
the time that it has been in business if
transactions involving BPA; and
"small entity" under the Investment
shorter); and (2) is not affiliated with
4. The appropriate steps a covered
Company Act to mean "an investment
any person (other than a natural person) company that, together with other
financial institution should take once it
that is not a small business or small
identifies use of one of its
investment companies in the same
organization as defined in this
correspondent accounts to process
group
of related investment companies,
release." 7 Based on SEC estimates, 17
transactions involving BPA.
has net assets of $50 million or less as
percent of broker-dealers are classified
of the end of its most recent fiscal
V. Regulatory Flexibility Act
as "small" entities for purposes of the
1
year."
1 Based on SEC estimates, 7
RFA. 8
When an agency issues a rulemaking
percent of mutual funds are classified as
Futures commission merchants
proposal, the Regulatory Flexibility Act
"small entities" for purposes of the RFA
("RFA") requires the agency to "prepare ("FCMs") are defined in 31 CFR
under this definition.1 2
1010.100(x)
as
those
FCMs
that
are
and make available for public comment
As noted above, 80 percent of banks,
an initial regulatory flexibility analysis" registered or required to be registered as 94 percent of credit unions, 17 percent
a FCM with the Commodity Futures
that will "describe the impact of the
of broker-dealers, 95 percent of
Trading Commission ("CFTC") under
proposed rule on small entities." (5
introducing brokers-commodities, zero
the Commodity Exchange Act ("CEA"),
U.S.C. 603(a)). Section 605 of the RF A
FCMs, and 7 percent of mutual funds
allows an agency to certify a rule, in lieu except persons who register pursuant to are small entities. The limited number
of
the
CEA,
7
U.S.C.
section
4f(a)(2)
of preparing an analysis, if the proposed
of foreign banking institutions with
6f(a)(2). Because FinCEN and the CFTC
rulemaking is not expected to have a
which BPA maintains or will maintain
substantially
the
same
regulate
significant economic impact on a
accounts will likely limit the number of
population, for the purposes of the RF A,
substantial number of small entities.
affected covered financial institutions to
FinCEN relies on the CFTC's definition
the largest U.S. banks, which actively
A. Proposal To Prohibit Covered
of small business as previously
engage in international transactions.
Financial Institutions From Opening or
submitted to the SBA. In the CFTC's
Thus, the prohibition on maintaining
Maintaining Correspondent Accounts
"Policy Statement and Establishment of
correspondent accounts for foreign
With Certain Foreign Banks Under the
Definitions of 'Small Entities' for
banking institutions that engage in
Fifth Special Measure
Purposes of the Regulatory Flexibility
transactions involving BP A under the
Act," the CFTC concluded that
1. Estimate of the Number of Small
fifth special measure would not impact
registered FCMs should not be
Entities to Whom the Proposed Fifth
a substantial number of small entities.
Special Measure Will Apply
5
Federal Deposit Insurance Corporation, Find an
2. Description of the Projected Reporting
For purposes of the RF A, both banks
Institution, http://www2.fdic.gov/idasp!main.asp;
and Recordkeeping Requirements of the
select Size or Performance: Total Assets, type Equal
and credit unions are considered small
Fifth Special Measure
or less than$: "500000" and select Find.
entities if they have less than
n National Credit Union Administration, Credit
The proposed fifth special measure
4
$500,000,000 in assets. Of the
Union Data, http://webapps.ncua.gov!customquery/ would require covered financial
estimated 7,000 banks, 80 percent have
; select Search Fields: Total Assets, select Operator:
institutions to provide a notification
Less than or equal to, type Field Values:
4
Table of Small Business Size Standards
Matched to North American Indusfly Classification
System Codes, Small Business Administration Size
Standards (SBA Jan. 22, 2014) [hereinafter SBA Size
Standards).
"500000000" and select Go.

717 CFR 240.0-10(c).
11
76 FR 37572, 37602 (June 27, 2011) (the SEC
estimates 871 small broker-dealers of the 5,063 total
registered broker-dealers).
47 FR 18618, 18619 (Apr. 30, 1982).

SBA Size Standards at 28.
1117 CFR 270.0-10.
1z 78 FR 23637, 23658 (April19, 2013).
10

13308
received by May 12, 2015. In accordance benefits of available regulatory

with the requirements of the Paperwork alternatives and, if regulation is
necessary, to select regulatory
Reduction Act and its implementing
approaches that maximize net benefits
regulations, 5 CFR 1320, the following
information concerning the collection of (including potential economic,
environmental, public health and safety
information as required by 31 CFR
1010.662 is presented to assist those
effects, distributive impacts, and
persons wishing to comment on the
equity). Executive Order 13563
information collection.
emphasizes the importance of
quantifying both costs and benefits, of
A. Proposed Information Collection
reducing costs, of harmonizing rules,
Under the Fifth Special Measure
and of promoting flexibility. It has been
The notification requirement in
determined that the proposed rule is not
section 1010.662(b}(2)(i) is intended to
a "significant regulatory action" for
aid cooperation from correspondent
purposes of Executive Order 12866.
account holders in denying BPA access
List of Subjects in 31 CFR Part 1010
to the U.S. financial system. The
information required to be maintained
Administrative practice and
by section 1010.662(b)(3)(i) would be
procedure, banks and banking, brokers,
used by federal agencies and certain
counter-money laundering, counterself-regulatory organizations to verify
terrorism, foreign banking.
compliance by covered financial
Authority and Issuance
institutions with the provisions of 31
For the reasons set forth in the
CFR 1010.662. The collection of
preamble, part 1010, chapter X of title
information would be mandatory.
31 of the Code of Federal Regulations,
Description of Affected Financial
is proposed to be amended as follows:
Institutions: Banks, broker-dealers in
securities, futures commission
1. The authority citation for part 1010
merchants and introducing brokersis revised to read as follows:
commodities, and mutual funds.
Authority: 12 U.S.C. 1829b and 1951-1959;
Estimated Number of Affected
31 U.S.C. 5311-5314, 5316-5332 Title III,
Financial Institutions: 5,000.
sees. 311,312,313,314,319, 326,352,Pub.
Estimated Average Annual Burden in L. 107-56, 115 Stat. 307.
Hours Per Affected Financial
2. Add 1010.662 to read as follows:
Institution: The estimated average
burden associated with the collection of 101 0.662 Special measures against
B. Certification
information in this proposed rule is one Banca Privada d' Andorra.
For these reasons, FinCEN certifies
hour per affected financial institution.
(a) Definitions. For purposes of this
that the proposals contained in this
Estimated Total Annual Burden:
section:
rulemaking would not have a significant 5,000 hours.
(1) Banca Privada d'Andorra means
impact on a substantial number of small
FinCEN specifically invites comments all branches, offices, and subsidiaries of
businesses.
on: (a) Whether the proposed collection Banca Privada d' Andorra wherever
FinCEN invites comments from
of information is necessary for the
located.
members of the public who believe
proper performance of the mission of
(2) Correspondent account has the
there would be a significant economic
FinCEN, including whether the
same meaning as provided in
impact on small entities from the
information would have practical
1010.605(c)(1)(ii).
utility; (b) the accuracy of FinCEN's
(3) Covered financial institution has
regarding BP A.
estimate of the burden of the proposed
the same meaning as provided in
collection of information; (c) ways to
1010.605(e)(1).
VI. Paperwork Reduction Act
enhance the quality, utility, and clarity
(4) Subsidiary means a company of
The collection of information
of the information required to be
which more than 50 percent of the
contained in this proposed rule is being maintained; (d) ways to minimize the
voting stock or analogous equity interest
submitted to the Office of Management
burden of the required collection of
is owned by another company.
and Budget for review in accordance
(b) Prohibition on accounts and due
information, including through the use
with the Paperwork Reduction Act of
diligence requirements for covered
of automated collection techniques or
1995 (44 U.S.C. 3507(d)). Comments on
financial institutions-(1) Prohibition
other forms of information technology;
the collection of information should be
on use of correspondent accounts. A
and (e) estimates of capital or start-up
sent to the Desk Officer for the
covered financial institution shall
costs and costs of operation,
Department of Treasury, Office of
terminate any correspondent account
maintenance, and purchase of services
Information and Regulatory Affairs,
that is established, maintained,
to report the information.
Office of Management and Budget,
An agency may not conduct or
administered, or managed in the United
Paperwork Reduction Project (1506),
sponsor, and a person is not required to
States for, or on behalf of, Banca Privada
Washington, DC 20503 (or by email to
respond to, a collection of information
d'Andorra.
oira submission@omb.eop.gov] with a
(2) Special due diligence of
unless it displays a valid OMB control
copy to FinCEN by mail or email at the
number.
correspondent accounts to prohibit use.
addresses previously specified.
(i) A covered financial institution shall
VII. Executive Order 12866
Comments should be submitted by one
apply special due diligence to its foreign
method only. Comments on the
Executive Orders 12866 and 13563
correspondent accounts that is
collection of information should be
direct agencies to assess costs and
reasonably designed to guard against
intended to aid cooperation from foreign
correspondent account holders in
preventing transactions involving BPA
from accessing the U.S. financial
system. FinCEN estimates that the
burden on institutions providing this
notice is one hour. Covered financial
institutions would also be required to
take reasonable measures to detect use
of their correspondent accounts to
process transactions involving BP A. All
U.S. persons, including U.S. financial
institutions, currently must exercise
some degree of due diligence to comply
with OFAC sanctions and suspicious
activity reporting requirements. The
tools used for such purposes, including
commercially available software used to
comply with the economic sanctions
programs administered by OFAC, can
easily be modified to identify
correspondent accounts with foreign
banks that involve BPA. Thus, the
special due diligence that would be
required by the imposition of the fifth
special measure-i.e., the one-time
transmittal of notice to certain
correspondent account holders, the
screening of transactions to identify any
use of correspondent accounts, and the
implementation of risk-based measures
to detect use of correspondent
accounts-would not impose a
significant additional economic burden
upon small U.S. financial institutions.

their use to process transactions
involving Banca Privada d'Andorra. At
a minimum, that special due diligence
must include:
(A) Notifying those foreign
correspondent account holders that the
covered financial institution knows or
has reason to know provide services to
Banca Privada d'Andorra that such
correspondents may not provide Banca
Privada d'Andorra with access to the
correspondent account maintained at
the covered financial institution; and
(B) Taking reasonable steps to identify
any use of its foreign correspondent
accounts by Banca Privada d'Andorra,
to the extent that such use can be
determined from transactional records
maintained in the covered financial
institution's normal course ofbusiness.
(ii) A covered financial institution
shall take a risk-based approach when
deciding what, if any, other due
diligence measures it reasonably must
adopt to guard against the use of its
foreign correspondent accounts to
process transactions involving Banca
Privada d' Andorra.
(iii) A covered financial institution
that obtains knowledge that a foreign
correspondent account may be being
used to process transactions involving
Banca Privada d'Andorra shall take all
appropriate steps to further investigate
and prevent such access, including the
notification of its correspondent account
holder under paragraph (b)(2)(i)(A) and,
where necessary, termination of the
correspondent account.
{3) Recordkeeping and reporting. {i) A
covered financial institution is required
to document its compliance with the
notice requirement set forth in
paragraph (b)(2)(i)(A) of this section.
(ii) Nothing in this paragraph (b) shall
require a covered financial institution to
report any information not otherwise
required to be reported by law or
regulation.
Dated: March 6, 2015.
Jennifer Shasky Calvery,
Financial Crimes Enforcement Network.
[FR Doc. 2015-05724 Filed 3-12-15; 8:45am]
13309
DEPARTMENT OF HOMELAND
SECURITY
Collins, Program Manager, Docket

Operations, telephone (202) 366-9826.
Coast Guard
Table of Acronyms
33 CFR Part 165
[Docket Number USCG-2014-1044]
RIN 1625-AAOO
Safety Zone; Shore (Belt) Parkway

Bridge Construction, Mill Basin;
Brooklyn, NY
AGENCY:
ACTION:
Coast Guard, DHS.

Notice of proposed rulemaking.
The Coast Guard proposes to

establish a safety zone on the navigable
waters of Mill Basin surrounding the
Belt Parkway Bridge. In response to a
planned Belt Parkway Bridge
construction project, this rule would
allow the Coast Guard to prohibit all
vessel traffic through the safety zone
during bridge replacement operations,
both planned and unforeseen, that could
pose an imminent hazard to persons and
vessels operating in the area. This rule
is necessary to provide for the safety of
life in the vicinity of the construction of
the Belt Parkway Bridge.
DATES: Comments and related material
must be received by the Coast Guard on
or before May 12, 2015.
Requests for public meetings must be
received by the Coast Guard on or before
April 3, 2015.
ADDRESSES: You may submit comments
identified by docket number using any
one of the following methods:
(1) Federal eRulemaking Portal:
http :llwww.regulations .gov.
{2) Fax: (202) 493-2251.
{3) Mail or Delivery: Docket
Management Facility (M-30), U.S.
Department of Transportation, West
Building Ground Floor, Room W12-140,
1200 New Jersey Avenue SE.,
Washington, DC 20590-0001. Deliveries
accepted between 9 a.m. and 5 p.m.,
Monday through Friday, except federal
holidays. The telephone number is
(202)366-9329.
See the "Public Participation and
Request for Comments" portion of the
SUPPLEMENTARY INFORMATION section
below for further instructions on
submitting comments. To avoid
duplication, please use only one of
these three methods.
FOR FURTHER INFORMATION CONTACT: If
you have questions on this rule, contact
LT Hannah Eko, Coast Guard Sector
New York; telephone (718) 354-4114, or
email hannah.o.eko@uscg.mil. If you
have questions on viewing or submitting
material to the docket, call Cheryl
SUMMARY:
DHS Department of Homeland Security

FR Federal Register
NPRM Notice of Proposed Rulemaking
A. Public Participation and Request for

Comments
We encourage you to participate in
this rulemaking by submitting
comments and related materials. All
comments received will be posted
without change to http:!I
www.regulations.gov and will include
any personal information you have
provided.
1. Submitting Comments
If you submit a comment, please

include the docket number for this
rulemaking, indicate the specific section
of this document to which each
comment applies, and provide a reason
for each suggestion or recommendation.
You may submit your comments and
material online at http://
wwv.r.regulations.gov, or by fax, mail, or
hand delivery, but please use only one
of these means. If you submit a
comment online, it will be considered
received by the Coast Guard when you
successfully transmit the comment. If
you fax, hand deliver, or mail your
comment, it will be considered as
having been received by the Coast
Guard when it is received at the Docket
Management Facility. We recommend
that you include your name and a
mailing address, an email address, or a
telephone number in the body of your
document so that we can contact you if
we have questions regarding your
submission.
To submit your comment online, go to
http:/lwww.regulations.gov, type the
docket number [USCG-2014-1044] in
the "SEARCH" box and click
"SEARCH." Click on "Submit a
Comment" on the line associated with
this rulemaking.
If you submit your comments by mail
or hand delivery, submit them in an
unbound format, no larger than 81fz by
11 inches, suitable for copying and
electronic filing. If you submit
comments by mail and would like to
know that they reached the Facility,
please enclose a stamped, self-addressed
postcard or envelope. We will consider
all comments and material received
during the comment period and may
change the rule based on your
comments.
EXHIBIT 6
May 6, 2015
VIA ELECTRONIC AND FIRST CLASS MAIL

Ms. Jennifer Shasky Calvery
Director
Financial Crimes Enforcement Network
P.O. Box 39
Vienna, VA 22183
Re:
Banca Privada dAndorra
Dear Ms. Shasky Calvery:

This firm represents Ramon and Higini Cierco (the Cierco Brothers), the non-executive co-chairmen
of the Grupo Banca Privada dAndorra (BPA Group) who collectively are the controlling shareholders
in the BPA Group. On behalf of the Cierco Brothers, we provide these written comments to the March
6, 2015 Notice of Finding regarding Banca Privada dAndorra (BPA).
The Cierco Brothers were extremely shocked and troubled by the Notice of Finding, not only because
BPA had not been contacted by FinCEN or any other U.S investigative authority prior to the Notice, but
also because the information they received as directors from BPAs auditors and regulators made clear
to them that BPAs policies and procedures were working effectively. As non-executive co-chairmen,
the Cierco Brothers were at all times committed to assuring that the compliance procedures at BPA
fulfilled all relevant standards. For each year since at least 2003, BPA hired two of the largest and most
respected professional services firms in the world, KPMG (then under the supervision of Maria Cosan,
now Chief Executive of Institut Nacional Andorra de Finances) and Deloitte, to conduct annual antimoney laundering audits. These engagements were expressly approved by the Cierco Brothers in their
capacity as directors of BPA. The auditors were provided with unfettered access to BPAs files and
personnel and were tasked with recommending corrective measures wherever they found areas for
improvement. The Cierco Brothers expected that senior management would act on those
recommendations and directed that they do so. The auditors, as well as government regulators who
received BPAs audits, approved of BPAs compliance program, which the Cierco Brothers understood
to be in accordance with standards of the Andorran regulators.
The Cierco Brothers sought to implement a vision of professionalism, transparency and integrity, going
outside of Andorra to acquire the Banco Madrid, which subjected BPA to oversight and regulation by
the Bank of Spain, a major European central bank. This purchase, approved in 2011, was the first
purchase ever approved of a Spanish bank by an Andorran financial institution. The Cierco Brothers
reasonably believed based upon the thorough examination conducted by the Bank of Spain in connection
with that transaction, and the Bank of Spains failure at that time or thereafter to identify any material
weaknesses in anti-money laundering policies, that BPAs programs, policies and procedures met
relevant international standards.
In its Notice of Finding, FinCEN labels BPA a financial institution of primary money laundering
concern. The Cierco Brothers respectfully but unequivocally disagree with this assertion. They submit
that, to the best of their knowledge, BPA complied with applicable laws and regulations and instituted
controls that they believed properly mitigated the risk of money laundering. BPA was a small but
successful and well respected financial institution, with more than 25,000 depositors, offering a broad
range of services through 31 branches in three countries. It had deliberate, steady growth of profits and
deposits fully in line with the relevant sector and inconsistent with an institution seeking to attract
improper deposits.
To the extent that compliance weaknesses would have been identified by regulators, the Cierco Brothers
were fully prepared to address those promptly and decisively, through termination of employees,
customers or relationships, as well as through adoption of new policies or supervision. Yet neither
FinCEN nor any other regulator or authority ever suggested serious problems; the first notice provided
to the bank, its board, or its owners was the Section 311 Notice. While entirely committed to
cooperating with authorities in the U.S., the Cierco Brothers respectfully submit that FinCENs
measures were precipitous and disproportionate, and have had the effect of harming depositors,
employees, and investors without effectively combating money laundering risk.
Indeed, the FinCEN Notice of Finding triggered a run on Banco Madrid, BPAs Spanish subsidiary and
principal holder of the BPA Groups deposits, despite the fact that, as the Bank of Spain noted on March
15, 2015, Banco Madrid held adequate reserves to meet its obligations and, absent the Notice of Finding,
could have continued to operate normally.1 Similarly, in Panama, the chief banking regulator
determined that BPAs local assets appeared to be solid and there was no evidence indicating money
laundering problems in Panama. Nevertheless, because of the Notice of Filing, the Panamanian
regulator intervened in BPAs Panamanian affiliate, and after several weeks, announced an extension in
the intervention based on delays in the Andorran investigation. 2
As for BPA in Andorra, it is the Cierco Brothers position that the Andorran regulators intervention in
BPA was mistaken, only served to harm employees and depositors, and violated Andorran law.3 Like
1
See Banco de Espaa, Direccin General de Supervisin, Informe sobre la situacin de Banco de Madrid,
S.A. (Mar. 15, 2015).
2
Press Release, Superintendencia de Bancos de Panam (Apr. 7, 2015); see also, Regulador panameo extiende
la intervencin de su filial BPA en Panam, La Vanguardia (Apr. 15, 2015).
3
Los hermanos Cierco, accionistas mayoritarios, impugnan la intervencin de BPA, Negocios (Apr. 13, 2015).
The Cierco Brothers have filed proceedings for this violation of Andorran law.
the Spanish and Panamanian actions, the Andorran intervention took place only after FinCEN had issued
its Notice of Finding. The Cierco Brothers submit that the actions taken in Andorra were political in
nature, and BPA was shut down to avoid further action against other Andorran banks or broader action
against Andorra generally. The practice of sacrificing smaller banks as a political triage strategy by
foreign regulators has been identified as a concern by U.S. government officials, foreign government
officials, and representatives of foreign banks,4 and it appears to have happened here. Andorra has made
significant strides to upgrade its laws and regulatory framework in recent years, and BPA has fully
supported and been in the vanguard of the effort to strengthen AML and compliance standards in the
financial sector.
More broadly, the Notice of Finding necessarily raises questions regarding the procedures undertaken by
FinCEN itself. The Cierco Brothers respectfully suggest that FinCEN could have accomplished its goals
without causing the shutdown of BPA had it engaged in a focused, confidential dialogue with the banks
board and controlling shareholders. Had it done so, FinCEN may have reasonably concluded that filing a
311 notice would be precipitous and disproportionate. The Notice appears to be largely based on events
that occurred some years in the past and were sub judice. No imminent risk is identified, but even if the
risks were imminent, the Cierco Brothers would have addressed them immediately.
The incidents identified in the Notice, moreover, appear to allege not that BPA officials had knowing
and direct contact with criminal actors, but rather that BPA was interacting with foreign financial
advisors, attorneys or accountants, who were investing funds on behalf of their clients. The Cierco
Brothers had no substantive interaction with these professional intermediaries, much less any reason to
know that these professional advisors may have had improper client relationships. Had they known,
they would have severed any improper relationships and reported them to relevant authorities, as they
had in the past. There are many intermediaries in the financial world, all of whom have responsibilities
governed by law and regulation. Here it appears that certain third parties may have failed in meeting
those responsibilities, but the simple expedient of telling the Cierco Brothers that there were good
reasons not to do business with these intermediaries would have resolved the issue. Instead, the issuance
of the Section 311 Notice, suddenly and without prior dialogue, has destroyed a solvent, viable financial
institution.
Background
The Cierco Brothers have always taken their professional obligations seriously, including their
responsibilities as Directors and Shareholders of BPA, and their obligations in all of their many business
endeavors. Their reputation for integrity has been untarnished. In addition to the bank, the Cierco
Brothers have interests in hotels, real estate, and other businesses. They often partner with multinational
organizations. They are the leaders of a highly respected family in their country.
The Cierco Brothers are the sons of the late and revered Higini Cierco (1921 2004), a Spanish
immigrant from the terrible chaos of the Spanish civil war who went to Andorra and established himself
as a prominent entrepreneur in Andorra. During the Second World War, the elder Cierco, together with
4
US General Accountability Office, Report to Congressional Requesters, USA PATRIOT Act, Better Interagency
Coordination and Implementing Guidance for Section 311 Could Improve U.S. Anti-Money Laundering Efforts
(September 2008) at 26.
his cousin Jos Castillo, worked closely with U.S. Intelligence Services. The elder Cierco helped Jewish
families escaping Nazi persecution cross the border from occupied France into Andorra.
The elder Cierco established Renault automobile dealerships in the 1940s and 50s and subsequently
launched photography, electronics and other retail businesses catering to the growing tourist population
in Andorra. In the 1980s, the Cierco Brothers joined their fathers businesses and contributed to the
growth of the family conglomerate. Around this time, the businesses gains were re-invested in
Andorran real estate and hotels, which catered, in large part, to the significant wave of tourists that travel
to Andorra. They also constructed and managed service stations and have a long-standing and extensive
commercial relationship with multinational construction, manufacturing and production companies.
During this time, the Cierco family acquired part of Banca Cassany, which later became BPA. These
businesses, including BPA, employ one thousand people directly and thousands indirectly, principally in
Andorra and Spain. Since the death of their father in 2004, the Cierco Brothers have acted as directors
of the numerous business lines, hiring qualified professionals to manage day-to-day operations.
In addition to their entrepreneurial activities, the Cierco family has made a longstanding commitment to
charitable activity. The family created the BPA Foundation, which is dedicated to helping disabled
youth who face a risk of social exclusion; the Fundaci Privada Tutelar dAndorra, which, at no cost to
the beneficiary or the state, voluntarily undertakes the guardianship of disabled people. Ramon Cierco
is also the vice-president of the F.C. Barcelona Foundation (he is a Director of the famed F.C. Barcelona
soccer team as well) and Ramons wife, Blanca, is the current President of UNICEF Andorra. Higinis
wife, Carmen, has been for many years a member of the board of Damas de Meritxel, a leading social
work charity in Andorra. In addition, the Cierco Brothers are leading patrons of the arts in their home
region and have made countless contributions to the artistic communities in Andorra, Spain and France.
With regard to BPA, the Cierco Brothers were not day-to-day managers. As noted, they have many
business interests outside of BPA; at all times, however, they took their duties as directors of BPA
seriously. They set a general strategy of responsible growth, hired qualified professionals including
compliance professionals, and relied on reports of management, third-party auditors, and regulators with
respect to appropriate systems and controls. Far from seeking to avoid scrutiny of their operations by
confining their business to a small country like Andorra, they were the first Andorran bank to move into
the Spanish market, accepting willingly the disclosure, compliance and regulatory requirements
expected of financial institutions operating in the European Union.
Like any non-executive directors of large companies, the Cierco Brothers do not know all of the
operational facts regarding BPA, but in reviewing the audits made available to them, they certainly had
every reason to believe that the bank was compliant with applicable laws, regulations and standards.
They are taking affirmative steps to understand how this happened and intend to cooperate with all
relevant inquiries. The Cierco Brothers are confident that FinCEN will find that the BPA board of
directors was never presented with information that in any way suggested systematic wrongdoing; that
the board had no reason to suspect wrongdoing; and the board would have reacted aggressively had such
wrongdoing been brought to their attention by auditors or regulators.
BPAs Business
The Notice of Finding states It is difficult to assess on the information available the extent to which
BPA is used for legitimate business purposes. The Cierco Brothers respectfully submit that i) the
gathering and objective evaluation of such information is a necessary legal requirement (the second
factor) for issuing a Notice of Finding, 31 U.S.C. 5318A(c)(2)B)(ii); and ii) the information was
readily available to FinCEN. FinCENs failure to seek and obtain such readily available information
was a deficiency in the process and, had FinCEN done so, it would have discovered that BPA had a
thriving and important banking business. The Cierco Brothers respectfully suggest that the failure to
meet this requirement is common in the FinCEN process and, rather than reflecting an inability to obtain
obscure information, instead reflects an error that results in a skewed balance of factors. Had FinCEN
taken the required steps to gather and evaluate available information regarding this critical factor, it
would have strongly militated against using the fatal fifth measure implemented here.5
FinCENs failure to consider the legitimate business of a target bank is not unique to BPA; a review of
FinCENs other 311 Notices evidences that it customarily dispenses with evaluating this factor in
essentially identical language. For example, in its finding on Banco Delta Asia (BDA), FinCENs
discussion of the second factor three sentences long begins by stating [i]t is difficult to determine
the extent to which [BDA] is used for legitimate purposes. Notice of Finding, Banco Delta Asia
SARL, 70 Fed. Reg. 55214 (Sept. 20, 2005). FinCEN posits that BDA likely engages in some
legitimate activity and then concludes that such unspecified legitimate activity is significantly
outweighed by its use to promote or facilitate money laundering and other financial crimes. Similarly,
in its finding on Lebanese Canadian Bank SAL (LCB), FinCEN again acknowledges generally that
the bank conducted legitimate business, but fails to investigate or quantify it in order to weigh it against
instances of money laundering. Notice of Finding, Lebanese Canadian Bank SAL, 76 Fed. Reg. 9403
(Feb. 17, 2011). After noting a high volume of transactional activity that was likely to be legitimate
business, FinCEN concluded that, based on the numerous instances of illicit funds passing through
LCB, any legitimate use of LCB is significantly outweighed by the apparent use of LCB to promote or
facilitate money laundering. Id. (emphasis added).
To the same effect, in JSC CredexBank, 77 Fed. Reg. 31434 (May 25, 2012), FinCEN begins by stating
that the lack of transparency and transactional activity with shell corporations makes it difficult to
assess the extent to which Credex is engaged in legitimate business. In the second and final sentence,
FinCEN concludes: Thus, any legitimate use of Credex is significantly outweighed by the apparent use
of Credex to facilitate or promote money laundering and other financial crimes.
The same analytic flaw infects the finding here: It is difficult to assess on the information available the
extent to which BPA is used for legitimate business purposes. Notice of Finding, Banca Privada
5
Under the fifth, and strongest, special measure, banks may be prohibited from opening or maintaining in the
United States any correspondent account or payable through account for, or on behalf of, a foreign financial
institution if the account involves a jurisdiction, financial institution, class of transactions, or type of account that
is of primary money laundering concern. The imposition of this measure can prohibit U.S. banks from
establishing, maintaining, administering, or managing in the United States a correspondent or payable through
account for, or on behalf of, any financial institution from a specific foreign jurisdiction. This measure may also
be applied to specific foreign financial institutions and their subsidiaries
(https://www.ffiec.gov/bsa_aml_infobase/pages_manual/OLM_031.htm).
dAndorra, 80 Fed. Reg. 13464 (Mar. 13, 2015). FinCEN notes that BPA provides services in private
banking, personal banking, and corporate banking which includes typical bank products such as
saving accounts, corporate accounts, credit cards, and financing. But nowhere, does FinCEN
demonstrate that it has engaged in the required fact-finding, investigation and evaluation to determine
the extent and quality of BPAs legitimate business. It provides no discussion of legitimate clients of the
bank, the volume of legitimate business transactions conducted by the bank, or the proportion of
legitimate business as compared to the referenced instances of anti-money laundering failures by a few
bank officials. Rather, FinCEN simply concludes that BPAs legitimate business activity is at high risk
of being abused by money launderers.
FinCEN engages in the same failures with respect to its determinations as to which special measures to
impose. Section 311 requires that FinCEN consider the extent to which a special measure will impact
legitimate business activity. 31 U.S.C. 5318A(a)(4)(B)(iii). As with its findings described above,
FinCENs proposed rulemaking contains no substantive discussion of the banks legitimate business
activity and the impact of the fifth measure on that activity.
Had FinCEN consulted readily available sources of information here with regard to legitimate business
and the impact of the measures on that business, the conclusions and the remedies would have been
different. For this reason alone, the Notice of Filing should be withdrawn and no Final Rule should be
issued based upon the Notice.
At the time of the Notice of Finding, the BPA Group consisted of deposit-taking institutions in three
countries: Andorra, Spain and Panama.6 The Andorran institution maintained 5 branches, the Spanish
institution had 25 branches and the Panamanian institution had one branch. More than half of the assets
under management were located in Spain and more than half of the more than 25,000 depositors in the
group as a whole were nationals of Andorra, Spain or France. By way of assets, more than 65% of the
assets under management are held by Banco Madrid, and more than 90% of the assets under
management are from Spain, France and Andorra.
In 2011, BPA obtained approval from the Spanish authorities for the purchase of Banco Madrid,
previously owned by a Basque banking group. Banco Madrid was supervised by a large and well
established regulator, the Bank of Spain. Under BPAs management, Banco Madrid became an award
winning financial institution recognized for its funds management and quickly became the fastest
growing member of the BPA Group. As recently as 2014, the British publication Global Banking &
Finance Review named Banco Madrid the Best Wealth Manager and Best Asset Manager in Spain.
Indeed, Banco Madrid operated several of the most successful mutual funds in the Spanish market. Not
only did the BPA Group conduct overwhelmingly legitimate business, its business was thriving. The
Cierco Brothers submit that if FinCEN had conducted even a cursory examination of the business
activities of BPA, reviewing its filings and public information, questioning its regulators, its auditors or
the relevant banking communities, it would readily have ascertained that BPA was an important and
valuable business franchise that would be irreparably harmed by the 311 Notice. FinCENs statement
6
In accord with applicable law in those countries, the BPA Group maintained offices to manage investment funds
in Luxembourg and Switzerland, but those businesses were not branches of BPA and they were not deposit-taking
institutions. Contrary to FinCENs allegation, a prior representative office in Uruguay was closed at the time of
the Notice of Finding.
that [i]t is difficult to assess on the information available the extent to which BPA is used for legitimate
business purposes cannot be sustained. It ignores the viability and dynamism of a legitimate and
valuable business, as well as the devastating impact of the drastic remedy FinCEN selected.
FinCENs refusal in this case to make any effort to ascertain the extent of legitimate business and the
impact of the sanction on that business introduces a systemic bias into the process. Its failure to meet its
fact-gathering obligations necessarily skews its evaluation of factors and remedies. Here, as in other
cases, FinCEN asserts it cannot ascertain the scope of the banks legitimate business, speculates that
there probably is legitimate business of some sort, and then decides that whatever the business might be,
it does not outweigh the violations FinCEN has identified and so the target must be of primary money
laundering concern. That does not meet the fact-based balancing required by applicable law. For this
reason alone, the proposed Notice of Finding is defective and no final rule should be implemented.
BPAs AML Controls
At all times the Cierco Brothers were committed as directors to implementing and upgrading the
compliance procedures at BPA, in accordance with changing laws and regulations. To this end, they
approved the hiring of the worlds leading external auditors, such as KPMG and Deloitte to conduct
annual anti-money laundering (AML) audits. These audits were conducted annually from at least
2003. These auditors conducted full, open-file reviews to ensure BPAs compliance with Andorras
AML laws,7 and the auditors, as well as government regulators, approved BPAs compliance program.
The audits were thorough, designed and implemented wholly at the discretion of the external auditors in
accordance with the requirements and protocols of the Andorran Regulator. The auditors were also
tasked with recommending corrective measures wherever they found areas of concern, and the directors
insisted that senior management act on those recommendations. As evidenced by each auditors review
of prior actions taken, the auditors recommendations were subsequently adopted by BPA. Simply put,
these were not the actions of directors of a financial institution whose primary purpose was money
laundering, but rather directors committed to continuously improving a robust compliance program
implemented as part of a long-term strategy to build a successful, modern, multinational financial
institution.
In its most recent audits, covering the 2012 and 2013 calendar years, KPMG and Deloittes AML audits
show a bank with robust and constantly upgraded AML controls, fully consistent with the letter and
spirit of the relevant legal and regulatory requirements. BPA utilized state of the art, internationally
recognized databases and investigative tools with respect to the intake and ongoing monitoring of its
clients.
KPMGs March 2013 audit noted the following:
Article 52, Section 1, of the Law of International Criminal Cooperation and the Fight against the Laundering of
Money and Securities resulting from International Crime and against the Financing of Terrorism of 29 December
2000, as modified by Law 28/2008 of 11 December and by Law 04/2011 of 25 May and by Law 20/2013 of 10
October, and the Decree Modifying the Regulations of the Law on International Criminal Cooperation and the
Fight against the Laundering of Money and Securities resulting from International Crime and against the
Financing of Terrorism, approved by the Decree of 13 May 2009.
Since 2008, BPA has successfully obtained adequate documentation for pre-2000 accounts
thereby reaching a high standard of account-justifying documentation.
In order to reduce the risk of money laundering, in 2012 BPA successfully implemented new
procedures and review processes for cash payments in excess of 25,000 euros, the buying and
selling of credit instruments between clients, and cash deposits.
In 2012, BPA increased the number of reports for high-risk clients and complex accounts, with
each report including detailed information in relation to the client, the origin of funds, and
proposed transactions. 2013 saw an additional increase in such reports.8
BPA instituted internal controls to ensure that employees were up-to-date on AML procedures
and standards.
In no instance did KPMG raise any concerns that BPA had serious problems in money
laundering, nor did it suggest that BPA was a financial institution whose primary purpose was
money laundering.9
In December 2012, Deloitte issued its findings regarding BPAs AML program.10 It noted:
BPA had successfully implemented procedures for face-to-face meetings with new customers.
A strengthening of BPAs internal AML detection systems through broader use of the Siron
AML system, which was acquired at significant cost through the well-known German
compliance company Tonbeller.11
BPA responded to emerging challenges, such as fiscal fraud in Spain, by adopting timely
modifications in its procedures as needed.12
As with any compliance system, there is always room for improvement, and the BPA directors,
including the Cierco Brothers, tasked KPMG and Deloitte with making recommendations for improving
BPAs AML program. As noted above, the audit reports consistently commented on BPAs
responsiveness to the auditors recommendations. For example, in the March 2013 report, KPMG noted
that BPA had reduced its reliance on third-party intermediaries in order to find new customers.13 KPMG
8
BPA had quarterly AML meetings where high-level executives, including the Compliance Officer, reviewed all
new clients deemed to be high risk. If the necessary documentation justifying the existence of funds was lacking
the prospective new client was rejected. See, e.g., Att. A, Examples of AML Committee Meeting Minutes.
9
Att. B, (March 2013 KPMG Audit).
10
The AML audit report for calendar year 2014 was scheduled to be finalized in late March 2015 by KPMG.
The Cierco Brothers were never presented with that audit as Andorran regulators intervened in BPA and Spanish
regulators intervened in Banco Madrid, concurrently with FinCENs issuance of its Notice of Finding.
11
In January 2015, Tonbeller was acquired by FICO, a publicly listed U.S. company.
12
Att. C, Dec. 2013 Deloitte Audit.
13
Att. B, March 2013 KPMG Report at p. 40-41.
also noted that BPA had, upon the recommendation of its auditors, increased the documentation required
to justify the origin of funds.14
In its December 2013 AML audit, Deloitte also noted the reduction in reliance on intermediaries and
noted that BPA had adopted a prior recommendation to institutionalize the recognition of beneficial
owners. 15
Again, such observations would not have been consistent with a financial institution seeking out or
acting with willful indifference toward improper business. These findings indicated to the Cierco
Brothers, to regulators, and to the financial community an institution heading in good faith in the right
direction year after year. Such findings also strongly support the inference that if the Cierco Brothers
had been notified of issues with any third-party intermediaries, they would have taken appropriate
action.
While they recommended improvements, KPMG and Deloitte also concluded that BPA was in
compliance with Andorras AML laws and with BPAs own internal policies and procedures. BPAs
Andorran regulators confirmed these conclusions. As has been reported, Ms. Maria Cosan Canut, Chief
Executive of the Institut Nacional Andorr de Finances (the Andorran regulator charged with oversight
of Andorran financial institutions such as BPA) was a Director of KPMG and oversaw the extensive
anti-money laundering audits commissioned by BPA. At no time did Ms. Cosan and KPMG identify
anything remotely resembling the types of concerns outlined in FinCENs Notice of Finding. To the
contrary, KPMGs findings recommended standard and marginal areas of improvement not unlike those
typically found when outside auditors evaluate international banks, and BPA acted on KPMGs
recommendations. Indeed, these audits were shared with Andorran regulators, including the agency Ms.
Cosan now heads, without any substantive comment or question in return. Had AML experts such as
Deloitte, KPMG and Ms. Cosan identified any problems akin to those in the Notice of Finding, the
Cierco Brothers would have dealt with these matters firmly and thoroughly.
The Financial Intelligence Unit of Andorra (Andorran FIU) conducts periodic reviews of Andorran
financial institutions in order to confirm compliance with Andorran anti-money laundering and antiterrorist financing regulations and have received positive confirmations on each occasion. The most
recent findings regarding BPA were issued on September 17, 2012, covering the time period of 20092011. In this finding, the Head of the Andorran FIU, Carles Fiana Pifarr certified:
[BPA] strictly complies with the legal precepts contained in the [Andorran AML] Law,
having furthermore been subjected to successive external audits, that certify not only the
foregoing, but also that it has the necessary mechanisms for training and prevention.
I can furthermore confirm that in the last three years BANCA PRIVADA DANDORRA
S.A. has not been object of any corrective action or penalizing measures on money
laundering and terrorism financing.16
14
15
Id. at p. 41.
Att. C, Dec. 2013 Deloitte Report at p. 66-67.
Similarly, approximately three years earlier in 2009, the same review, this time covering the time period
2006 2008, was conducted by Josep Maria Francino Batile of the Andorran Money Laundering Unit,
and stated:
That BANCA PRIVADA DANDORRA is subject to supervision regarding money
laundering and terrorism financing by this Unit.
That each year BANCA PRIVADA DANDORRA sends this Unit an audit in which the
internal procedures on money laundering and terrorism financing are reviewed and their
adaptation to the standards of Andorra. From those audits it is deduced that BANCA
PRIVADA DANDORRA complied with the requirements of Andorra law on money
laundering and terrorism financing.17
Had Andorran regulators identified any concerns whatsoever the Cierco Brothers would have insisted
that BPA executives address those concerns.18 The regulators said nothing.
The Cierco Brothers relied on their internal executives as well as external auditors and regulators in
order to ensure that BPA complied with applicable AML laws and regulations. Nothing in the
applicable AML audits, or indeed communications of any kind, suggested widespread problems of the
sort alleged in FinCENs Notice of Finding.
As with many financial institutions that specialize in wealth management, BPA has over the years relied
on financial advisors to refer clients. The Cierco Brothers relied on senior management of the bank to
thoroughly vet any such financial advisors as well as their clients. As external auditors recommended
measures such as reduced reliance on third-party financial advisors, BPA adopted those very measures.
All clients of BPA were required to fill out an extensive KYC form, were required to supply a bank
reference, were required to make their first transfer from an account in their own name at another bank,
and were required to visit with a bank official within the first six months of the account relationship.19
The Cierco Brothers had no reason to doubt these rules were followed in the normal course, and when
certain deficiencies were identified (although never of the sort or magnitude alleged by FinCEN) they
directed that they be addressed.
Specific Incidents Cited by FinCEN
16
Original and Translation of Certification of Financial Intelligence Unit, Principality of Andorra (Sept. 17,
2012).
17
Original and Translation of Certification of Money Laundering Unit, Principality of Andorra (Jan. 12, 2009).
18
The 2015 certification had not been issued at the time of the FinCEN Notice of Finding but there is no reason
to believe that it would have differed from prior certifications given their reliance on the work of Deloitte and
KPMG.
19
See, e.g., Banca Privada DAndorra, Manual on Procedures and Internal Controls (Nov. 2014 Version).

10
The Cierco Brothers cannot and do not respond in detail to specific incidents referenced in the Notice of
Finding, because they had no substantive involvement in these matters in their capacity as directors and
shareholders. They do not believe that the specific incidents cited by FinCEN were representative of
BPA or were other than, if true, isolated and regrettable incidents, which have occurred at major U.S and
foreign banks on a regular basis without resulting in a Section 311 Notice. None of these banks were
cited with a 311 Notice, the international banking equivalent of a death sentence. In addition, as a
general matter, the incidents referred to in the Notice appear to have taken place some time ago. AML
audits approving procedures and controls were approved by international audit firms after these
incidents were identified and investigated. Certain of these matters resulted in arrests or court
proceedings with respect to the funds. Indeed, one of the incidents appears to refer to a blocking or
freezing of accounts, which the accountholder litigated in Andorra and the highest court in Andorra
unblocked, creating a legal obligation on BPA to release those funds. These court proceedings were not
referenced in the Notice and the Cierco Brothers are not aware of any other events in this regard.
It is extremely difficult to understand the urgency or necessity for shutting down this business when the
Notice fails to refer to any ongoing risks and the principal risks referenced are sub judice without any
ongoing transactional activity to the best that the Cierco Brothers are able to understand from the Notice
and other sources of information. Again, there may be other issues not identified in the Notice, but the
Cierco Brothers obviously are not able to comment on them other than to say they were not identified by
auditors or regulators and the Cierco Brothers would have acted had such matters been identified.
Each of the incidents described in the Notice refers to what are standard practices in the wealth
management business: investment of funds through third-party professionalsfinancial advisors,
accountants and lawyers. These professionals are referred to in the Notice as Third Party Money
Launderers. Again, the Cierco Brothers had no knowledge that these professionals were laundering
money. It may well be the case that the ultimate principals of these intermediaries had been involved in
improper activity, but the obvious solutions to this problem would be: i) to further strengthen
investigation of the intermediaries business; ii) to demand additional detailed information from the
intermediaries about their principals; and iii) to limit the introduction of clients through such
intermediary channels. As the reports referenced above make clear, that is precisely what BPA was
doing and would have continued to do had they been alerted to problems with intermediaries and the
bank been permitted to remain open.
No system is perfect and it is impossible to verify to a certainty all of the information provided by
customers. No bank can be certain that every one of its employees is scrupulous and honest. Every
bank has these problems and every bank must remain vigilant and take the steps that it can take to
minimize the inevitable failures of fallible human organizations. Ongoing oversight is necessary and
bank ownership and senior management must work cooperatively with auditors and regulators to
maintain a constructive dialogue and to take decisive action when problems are identified. By the same
token, however, regulators must work with banks to identify problems and deter suspicious activity.
What the Cierco Brothers understood was that BPA management was constantly upgrading and
implementing AML controls, that well-known international audit firms were making detailed inquiries
and recommendations that were acted on by management, and that the Andorran regulator certified that
BPAs procedures were robust and in line with applicable requirements. In such circumstances, and
given the extensive banking services BPA provided to its thousands of depositors, it is difficult for the
Cierco Brothers to fathom why FinCEN filed the Notice effectively shutting down this vibrant and
11
successful financial institution, particularly when a word to the Cierco Brothers and the banks board
would have been entirely sufficient to resolve any concerns.
It is perhaps a natural reaction when systems inevitably fail to single out particular institutions as object
lessons for draconian punishment. In this way, governments, regulators, bankers and the media can
convince themselves that the problem is not systemic but traceable to particular malfeasance. The
Cierco Brothers do not claim that BPA was a perfect institution, but it was an institution operating, at a
minimum, at the standard of its competitors in both Andorra and Spain and it endeavored to do what was
required to minimize risks. To the extent that individuals had their own agendas and hid problems or
bypassed procedures or lied about their actions, that was never known to the Cierco Brothers and, the
Cierco Brothers respectfully submit, should not have doomed an institution whose problems were
eminently fixable with good communication and good will, which the Cierco Brothers had and continue
to have. The Cierco Brothers are committed to cooperating with FinCEN, as well as the Spanish and
Andorran authorities, in order to understand what happened and to assist their employees, depositors and
shareholders; and thus pledge their cooperation.
Sincerely,
Eric L. Lewis
Manuel S. Varela
Aaron T. Wolfson
12
EXHIBIT 7


SUCCESSORS D'HIGINI CIERCO
Situated,
Plaintiffs,
Civil No. 15-cv-1641 (JEB)
v.

Defendants.
DECLARATION OF ERIC L. LEWIS
I, Eric L. Lewis, based on personal knowledge, declare the following under penalty of
perJury:
1. I am a partner of the firm Lewis Baach PLLC, attorneys for plaintiffs in the abovecaptioned matter and have been a member of the bar of this Court for approximately thirty years.
I make this declaration in support of Plaintiffs' Motion for Partial Summary Judgment and
Request for Expedited Relief.
2. By letter dated June 1, 2015, I requested a meeting with defendant Financial Critnes
Enforcement Network ("FinCEN") personnel to discuss the Notice Of Finding ("NOF") and
Notice of Proposed Rulemaking ("NPRM") issued by FinCEN with respect to Banca Privada
d' Andorra ("BP A").
3. On July 15, 2015, I and my colleagues Aaron T. Wolfson and Arthur D. Middlemiss n1et
with FinCEN officials Stephanie Brooker, Director of Enforcement, and Richard May, Director
Office of Special Measures, as well as other FinCEN personnel. At the July 15, 2015 meeting, I
and my colleagues offered to provide FinCEN with a copy of a letter dated March 24, 2014, from
BPA to its Andorran financial regulator, Institut Nacional Andorra de Finances ("INAF''), which
identified and disclosed the specific instances of alleged money laundering by BP A on which the
NOF relies. Ms. Brooker and Mr. May asked us to make this offer in writing. We duly made
that offer in our letter of July 22, 2015, and provided the March 24, 2014 letter as an attachment
to our letter of September 4, 2015. To date, FinCEN has not responded to our offer or provided
any substantive response to our presentation or any of our letters.
4. To date, the only portions of the administrative record that FinCEN has disclosed to
plaintiffs are the NOF and NPRM.
I declare under penalty of perjury that the foregoing is true and correct to the best of my
personal knowledge.
Executed on November JL, 2015
EXHIBIT 8
July 22, 2015

Stephanie Brooker, Esq.
Director, Enforcement Division
1801 L Street NW
Washington, D.C. 20006
RE: BPA - Ramon and Higini Cierco
Dear Ms. Brooker:
Thank you again for taking the time for you and your team to meet with us on July 15, 2015. As we
discussed at our meeting, and recognizing that this matter is the subject of ongoing administrative
proceedings, we are putting in writing our request to FinCEN to accept certain information, described
below, that we submit is material to the proposed rulemaking involving Banca Privada dAndorra
(BPA). We also ask that FinCEN communicate to the Andorran government that it does not object
to the Ciercos participation in the resolution of the remaining BPA assets. Finally, we also request
certain information which we hope FinCEN will be in a position to provide.
As discussed, the Ciercos were not involved in the day-to-day operation of BPA. The Ciercos relied
on banking professionals to manage the bank, and authorized the engagement of KPMG and Deloitte
to report on significant compliance issues, including anti-money laundering (AML) compliance.
The AML audit reports that KPMG and Deloitte delivered consistently confirmed that BPA
maintained proper AML controls. In addition, the Ciercos understood that BPA management
proactively made required reports of suspicious activity to regulators and responded appropriately to
requests for information. As we emphasized, the Ciercos had a record of taking appropriate action,
including termination of employees, and would have cooperated fully with regulatory authorities had
that request been made prior to the announcement of the Section 311 Notice. On their behalf, we
reiterate their offer to meet and cooperate with FinCEN and other foreign authorities to help ensure
that all legitimate law enforcement objectives are fulfilled and in the hope that the assets of the
valuable BPA franchise are not wasted.
The March 24, 2014 Letter to INAF
The bona fides of our representations are confirmed, significantly, by a March 24, 2014 letter that
BPA addressed to Maria Cosan, head of the Andorran INAF. In the letter, BPA self-identified and
reported each of the specific alleged instances of money laundering alleged in the March 10, 2015
Section 311 Notice. Indeed, BPAs disclosure came five months prior to the initial contact between
the U.S. Embassy and Andorran government in August 2014, and a year before FinCENs issuance of
the Section 311 Notice. Notably, after it submitted the March 24, 2014 letter, BPA received no
follow-up questions or feedback from the Andorran regulators.
We request that FinCEN agree to accept a copy of the March 24, 2014 Letter. We submit that BPAs
self-identification and self-reporting of these matters is inconsistent with the conclusion that BPA was
an institution with inadequate AML controls. Indeed, given that BPAs own report may well have
initiated the very matters that formed the Section 311 Notice predicate, we submit that BPA could not
be labeled an organization of primary money laundering concern based upon these cases. To the
extent that the Andorran regulators failed to provide FinCEN the March 24, 2014 Letter, this supports
our contention that Andorran regulators acted with recklessness or willful blindness, and may have
spurred FinCEN into precipitous and irreversible actions based on erroneous premises.
FinCENs Non-objection to the Ciercos Participation in the Resolution of BPA.
We also request that FinCEN communicate to the Andorran government that FinCEN does not object
to the Ciercos participation in plans to resolve the BPA assets.
Since the FinCENs issuance of the Section 311 Notice, the Ciercos have made repeated formal
requests to the Andorran government for information regarding the Andorran governments seizure of
BPA and to commence a dialogue with respect to proposed actions. Nevertheless, the Andorran
government has neither documented nor otherwise told the Ciercos why they were ousted from the
BPA Board of Directors and have excluded them from all processes related to BPAs resolution.
At our meeting, we represented to FinCEN that the Ciercos were told informally by Andorran
government representatives that the Andorran government will neither communicate directly with the
Ciercos nor consider their input with respect to the resolution of the BPA assets because the Andorran
government fears FinCENs potential disapproval or reprisal. You suggested that we document the
source of such communication. On June 25, 2015, Mr. Cesar Goyache, the CEO of AREB (the
Andorran organization set up to handle BPA post-Section 311 Notice) was asked by the Andorran
parliament to report to its Economy & Finance Commission. In a question and answer session, Mr.
Goyache was asked why AREB had not communicated with the Ciercos, and if the Ciercos could
remain shareholders in the new, resulting financial entity once BPA is restructured. In response, Mr.
Goyache stated in substance that, while it was true that original shareholders are usually part of the
"restructuring" process, the Ciercos would not be in this case. Mr. Goyache asserted that the Section
311 Notice evidenced FinCENs distrust of the Ciercos because they are ultimately responsible for
the banks management. Consequently, according to Mr. Goyache, it would not make sense for the
Ciercos to be part of the process, and it would be impossible for them to be shareholder of the new,
resulting entity. As Mr. Goyache stated, "Let's look at it with the perspective of trust, let's put
ourselves in FinCEN's shoes. (See http://www.consellgeneral.ad/ca/videos/compareixencespubliques/2015-06-25-comissio-de-finances-i-comissio-especial-de-vigilancia-i-prevencio-de-riscper-a-l2019estabilitat-financera-conjuntament, minutes 59 through 68)
We submit that, to the extent the Andorran government fears FinCEN disapproval or reprisal, the
Andorran government is mistaken. It defies common sense to conclude that FinCEN would express a
position to another regulator one way or the other regarding who should control a re-organized
banking institution. Indeed, for the reasons explained below, there is no legitimate reason why the
Ciercos should not participate in the banks resolution, and every reason why they should do so.
Nevertheless, to the extent that the Andorran government misunderstood or misrepresented FinCENs
2
position with respect to the Ciercos, we submit that it is fair and proper that FinCEN should correct it
by communicating directly to the Andorran government that it has no objection to the Ciercos
participation in the resolution of the BPA assets. Moreover, as referenced at our meeting, it would be
in the interest of all stakeholders, including regulators, that the BPA situation be resolved in a
professional and responsible manner to preserve commercial value consistent with the relevant law
enforcement interests.
Indeed, we submit that the event chronology strongly supports the conclusion that one of FinCENs
primary concerns was the Andorran governments failure to respond and cooperate with FinCEN.
The Ciercos, on the other hand, want to cooperate (as evidenced by their request to provide FinCEN
the March 24, 2014 Letter). Nevertheless, the Ciercos are excluded from BPAs reorganization not
because of anything that they have done or not done, but apparently because the Andorran
government fears FinCENs reaction. This is a wholly unsatisfactory state of affairs that should
properly be resolved. We understand that it is not FinCENs role to interfere in internal Andorran
politics; we ask merely that FinCEN state that position with certainty, and confirm that it has no
objection to the Ciercos playing a rule in their resolution.
The Ciercos have the knowledge, financial sophistication and motivation to put together a viable
commercial plan to preserve BPAs value in a responsible manner. They can and should be part of
the solution. The Ciercos wish to work jointly with the relevant authorities to make sure that the
value in the bank is preserved and maximized without risk to the Andorran financial system or to
relevant law enforcement interests. In addition, the Ciercos are entitled to realize some of the value
in the bank through fair payment or passive shareholder participation in a new or restructured
institution. They are entitled to have their reputations cleared and their interests respected.
Proposals
As discussed in our July 15, 2015 meeting and outlined in our presentation provided to you, on
behalf of the Ciercos we put forth the following three proposals and ask for FinCENs public support
for, or private communication to the Andorran government that it has no objection to, one of these
proposals, and the Ciercos proposed role in its realization.
Proposal #1: Support the Ciercos participation in the resumption of operations of BPA under
previous ownership with strict conditions and supervision
We request that FinCEN support (or take no objection to), the return the bank to the control of the
Ciercos under strict conditions and supervision. The Ciercos will ensure that:
a. An Independent Monitor for all international wire transactions is hired for a proscribed
period of time. This is done routinely in U.S. and international institutions with far
larger problems (e.g. Wachovia, HSBC, BNPP).
b. Prohibition on cash deposits above de minimis threshold.
c. Monthly AML risk reports to FinCEN and regulators.

d. Install new senior management subject to pre-approval by monitor.
e. Annual KYC Review of all clients maintaining balances over $100,000.
f. Bank will employ international best practices for AML as dictated by US standards
and subject to active monitoring.
We submit that the above proposal would provide far more assurance of effective oversight and AML
prevention than is currently the case with respect to any other Andorran financial institution, while
allowing a solvent, dynamic institution to continue to serve its core depositor base, with its loyal
existing staff and new, professional management.
Proposal #2 Support for Commercial Sale of BPA to Another Financial Institution
Alternatively, we request that FinCEN support (or take no objection to) the Ciercos involvement in
the sale of BPA to another bank.
a. The Ciercos will participate in a transparent process that ensures that the assets of the
bank are sold to another financial institution in an orderly commercial manner and
reasonable timeframe with independent professional advisors charged with
maximizing value.
b. The Ciercos would be permitted to play a constructive part in the sale negotiations to
maximize value.
c. The Ciercos would be compensated for their interest in the bank when it is sold.
This option would enable the Ciercos to bring their knowledge of the relevant market to facilitate an
orderly, commercial sale at market value and to prevent either waste of assets in the sales process by
the Andorran authorities or a windfall to a prospective purchaser if the process is not transparent,
orderly and commercial.
Proposal #3 Support Restructuring of BPA into a New Venture
Alternatively, we request that FinCEN support (or take no objection to) the Cierocs constructive
participation in the restructuring of BPA into a new venture. That venture could take the form of a
cooperative or social bank where depositors and employees take ownership interests, a model which
has worked extremely well in similar markets. The Ciercos would take no active management role in
the new venture and would be shareholders in the new venture.
Follow up Questions
There are numerous questions that have arisen based upon the actions of the Andorran government
and the comments by representative from the US Embassy in Madrid regarding this matter. Below we
respectfully submit some of our outstanding questions.
1. Did the Andorran Government make FinCEN aware of BPAs March 24, 2014 letter and
active cooperation in the matters cited in the Section 311 Notice?
2. Was FinCEN aware of the ongoing legal proceedings with respect to these matters?
3. Were there other cases or matters that were not disclosed that would warrant a Section 311
Notice or does FinCEN rely principally on these previously disclosed cases as discussed in the
March 24, 2014 letter?
4. Why was BPA the subject of the Hammer when the Andorran government itself appears to
have acted with willful neglect and denial of systemic issues? By the Hammer we refer to
the statement made by Mr. Smith, Economic Counselor of the U.S. Embassy in Madrid, when
he stated at an AUSBANC conference on April 21, 2015, With respect to Andorra, last year
we signaled our discomfort with an official report identifying problems in the system there. I
will not say that they did not realize it but they did not react with the appropriate vigor and we
had to use the hammer. (See http://youtu.be/j2aPNwxlpw, minute 57)
5. It is our understanding that BPA does business under rules and in a manner that is similar to
other Andorran banks. Were there factors which distinguished BPA from other Andorran
banks that led to the Section 311 Notice against BPA? Was those factors reflected in the
notice? Were other measures considered?
6. Was the US Government concerned with the Andorran financial system as a whole? Or were
there separate discussions with Andorran officials specific to BPA before the Hammer was
used?
7. At what point and why did FinCENs attention turn from the Andorran financial system to
BPA?
8. The Andorran governments response did not seriously address the issues in the August 2014
communication and rejected the critical suggestions made by FinCEN regarding cash
transaction reporting. Did the U.S. government try to impress upon Andorra the need to
reform its system?
9. Were there other communications between August 2014 and March 2015 regarding BPA with
the Andorran government? Did FinCEN specifically discuss the possibility of a Section 311
Notice with the Andorran authorities? Was there a discussion about a Section 311 against
more than one Andorran Bank? Against all banks in Andorra?
5
10. What is the content of the January 6, 2015 communication to the Andorran government?
11. The Ciercos believe that there is strong prima facie evidence that BPA paid the price for the
Andorran governments failure to respond with due expedition and diligence to U.S. requests.
Are they right or wrong?
Our clients wish to be fully cooperative with FinCEN in this investigation and are prepared to offer
any additional information in their possession. We look forward to hearing from you and would be
pleased to meet with you again at your convenience.
Sincerely,
Eric L. Lewis
EXHIBIT 9
EXHIBIT 10
EXHIBIT 11
August 7, 2015
VIA USPS
Disclosure Office (FOIA)
P.O. Box 39
Vienna, VA 22183
Re: Freedom of Information Act Request
Dear FinCEN Disclosure Officer:
This is a request under the Freedom of Information Act (FOIA), 5 U.S.C. 552, for a copy of
documents containing the following information: Any and all forms of communication, including but
not limited to emails, letters, facsimiles, between FinCEN and any department or division of the
Government of Andorra and/or communications within FinCEN or with any other U.S. agency or with
any department of division of the Government of Spain, regarding: 1) information relating to the
Andorran financial system, money laundering, regulation, transparency and related issues, beginning in
January 2014 and continuing through July 2015; 2) communications regarding standards and guidelines
for issuing Notices pursuant to Section 311 of the USA Patriot Act 3) any communications regarding
statements made by Mr. Anton Smith on or about April 21, 2014 with respect to Andorran policies
regarding the Andorran financial system, money laundering and related issues; and 4) information
relating to Banco Privada dAndorra and/ or Banco Madrid and/or the controlling shareholders of the
BPA Group..
I am willing to pay fees for this request up to a maximum of $1,000. If you estimate that the fees will
exceed this limit, please inform me first.
If you deny any part of or this entire request, please cite each specific exemption you feel justifies the
refusal to release the information and notify me of appeal procedures available to me under the law.
If you have any questions about this request, you may contact me by telephone at 202-833-8900. I look
forward to your reply within 20 workdays (excluding Saturdays, Sundays, and legal holidays), as the
statute requires.
Thank you for your consideration of this request.
Sincerely,
Eric L. Lewis
EXHIBIT 12
September 14, 2015
Eric Lewis
Lewis Baach pllc
1899 Pennsylvania Ave, NW
Suite 600
Re: FinCEN 2016-040
Dear Mr. Lewis:

As you know, we at the Financial Crimes Enforcement Network received your Freedom
of Information Act request dated August 7, 2015.
We regret that we were not able to respond to your request within September 15, 2015
timeframe due to search and consultation with multiple offices, volume of identified records, .
and volume of FOIA requests received by FinCEN this summer. As you may know FOIA
works on a first in, first out process and the office is striving to reduce the backlog caused this
summer.
Our estimated response date is December 15, 2015 and every effort will be made to
respond to your request before that date. I may be able to make partial releases before
December 15, 2015.
Sincerely yours,
Gilbert L. Paist
Disclosure Officer
www.flncen.gov
EXHIBIT 13
CENTRAL BANK OF SPAIN

Eurosystem
Supervision Director General

INSPECTION DEPARTMENT
Mr. Joan Pau Miquel Prats

Chief Executive Officer
Banca Privada dAndorra, SA
Avenida Carlemany, 119
Escaldes Engordany
Principado de Andorra
Madrid, June 30th, 2011
Reference: Acquisition of Banco Madrid SA by Banca Privada dAndorra
In reference to your letter of May 12th, 2011, registered as received in this Bank
of Spain the same day in which, in compliance with the stated in the article
57.1 of the 26/1988 Law of July 29th on Discipline and Intervention of Credit
Entities, you informed about Banca Privada dAndorra interest in acquiring to
CAJA DE AHORROS Y MONTE DE PIEDAD DE GUIPUZKOA Y SAN SEBASTIAN and
associated subsidiaries the one hundred percent of the shares of the capital,
representing the totality of the voting rights of BANCO MADRID S.A.
In answering your letter, it is my pleasure to let you know that the Executive
Commission of the Bank of Spain, in todays session and in accordance with the
provisions of article 58 of the 26/1988 Law, has agreed to not opposing to the
acquisition of the totality of the capital and voting rights of Banco Madrid S.A.
in the terms reported in your letter and additional documents attached to it.
Jeronimo Martinez Tello

Supervision Director General
EXHIBIT 14

United States Government Accountability Office
GAO
Report to Congressional Requesters
September 2008
USA PATRIOT ACT

Better Interagency
Coordination and
Implementing
Guidance for Section
311 Could Improve
U.S. Anti-Money
Laundering Efforts
GAO-08-1058

September 2008
USA PATRIOT ACT

Accountability Integrity Reliability
Highlights
Highlights of GAO-08-1058, a report to
congressional requesters
Better Interagency Coordination and Implementing

Guidance for Section 311 Could Improve U.S. AntiMoney Laundering Efforts
Why GAO Did This Study
What GAO Found
Since September 11, 2001, the

United States has established tools
to address the threat to the U.S.
financial system of money
laundering and terrorist financing.
One such tool is Section 311 of the
USA PATRIOT Act of 2001, which
authorizes the Secretary of the
Treasury (Treasury) to prohibit
U.S. financial institutions from
maintaining certain accounts for
foreign banks if they involve
foreign jurisdictions or institutions
found to be of primary money
laundering concern. To make this
finding, Treasury examines several
factors and generally issues a
proposed rule announcing its intent
to apply Section 311 restrictions.
Treasurys informal process to implement Section 311 was consistent with

requirements in U.S. law. From 2002 to 2005, Treasury identified 11 cases--3
jurisdictions and 8 institutions--as being of primary money laundering concern
and issued proposed rules for 10 of these cases. As required, Treasury
consulted with the Departments of Justice and State prior to issuing the
proposed rules. However, Justice and State officials said that it was difficult
for them to effectively assess the evidence on some Section 311 cases because
Treasury provided them limited time. In 2006, Treasury changed its process by
forming an interagency working group to discuss potential threats to the U.S.
financial system. But it is unclear if the new process addressed the agencies
concerns since Treasury has issued no Section 311 findings since 2005.
GAO was asked to examine (1) the

process used to implement Section
311 restrictions, (2) the process
Treasury follows to finalize or
withdraw a proposed rule, and
(3) how Treasury assesses the
impact of Section 311.
GAO reviewed financial and
investigative U.S. government
documents and met with
government officials and
representatives of affected banks
What GAO Recommends

GAO recommends that Treasury
establish guidance to clarify
responsibility to implement and
finalize Section 311 actions.
Treasury said it will act in response
to this recommendation, although
the process has been improved.
Justice and State did not comment.
To view the full product, including the scope

and methodology, click on GAO-08-1058.
For more information, contact Loren Yager at
(202) 512-4347 or yagerl@gao.gov.
Treasury determines whether to finalize or withdraw a proposed Section 311

rule by reviewing written comments and sometimes meeting with interested
parties. The duration of a proposed rule is significant because U.S. financial
institutions act immediately in response to its announcement. However,
Treasury has taken years to complete this process in some cases. In April
2008, Treasury withdrew two of three notices--all open for between 3 and 5
years--after GAO discussed the cases with Treasury officials. Contributing to
this lag was the absence of required timeframes for completing the action and
of written guidance specifying a Treasury office to finalize the actions.
Duration of Section 311 Proposed Rules
Ukraine
Nauru
Burma
Asia Wealth Bank (Burma)
Myanmar Mayflower Bank (Burma)
Commercial Bank of Syria (Syria)
First Merchant Bank OSH Ltd. (Turkish Cyprus)
Infobank (Belarus)
Multibanka (Latvia)
VEF Banka (Latvia)
Banco Delta Asia (Macau, China)
2002
2003
2004
Finding of primary money laundering concern
Notice of proposed rule
Concurrent finding and notice
Source: GAO analysis of Department of Treasury data.
2005
2006
2007
2008
Time between proposed and final rule/withdrawal in months;
(black bar indicates cases referred to in text above)
Time between finding and finding withdrawal
Treasury views Section 311 as effective because it isolates target institutions

from the U.S. financial system and encourages some foreign governments to
strengthen their anti-money laundering authorities. However, some foreign
government officials said that Section 311s implementation precluded their
own enforcement or regulatory actions against targeted institutions as U.S.
action was unilateral or provided too little information for them to act. Justice
officials said that if Section 311s application is viewed as unsubstantiated,
some countries may be less likely to cooperate with the U.S. government on
other law enforcement matters or sanctions. Treasury officials recognized the
concerns, but did not believe they diminished Section 311s effectiveness.
Contents
Letter
1
Results in Brief
Background
Process to Implement USA PATRIOT Act Section 311 Was
Consistent with Legal Requirements, but Some Agencies
Expressed Concerns about Consultation
Treasurys Process for Implementing Section 311 Followed
Requirements of the Law but Took Years to Finalize Some
Proposed Rules
Treasury Views Section 311 as Effective, despite Concerns
Expressed by Others about the Process
Conclusion
Recommendation for Executive Action
Agency Comments and Our Evaluation
22
27
27
27
Appendix I
Scope and Methodology
30
Appendix II
Potentially Relevant Factors for Designating a

Jurisdiction or Institution as of Primary Money
Laundering Concern
32
Appendix III
Factors to Consider in Selecting Special Measures
33
Appendix IV
Additional Information on Section 311 Cases
34
Appendix V
Comments from the Department of the Treasury
36
Appendix VI
GAO Contact and Staff Acknowledgments
40
Page i
2
5
17
GAO-08-1058 USA Patriot Act
Tables
Table 1: Potentially Relevant Factors to Be Considered When
Designating a Jurisdiction or Institution to Be of Primary
Money Laundering Concern
Table 2: Issuance of Finding of Primary Money Laundering
Concern, Proposed Rule, and Final Rule for Section 311
Cases
32
34
Figures
Figure 1: Organization of the Terrorism and Financial Intelligence
Office
Figure 2: Length of Time to Finalize or Withdraw Proposed Section
311 Rules
7
18
Abbreviations
AFMLS
BSA
FATF
FBI
FinCEN
NCCT
OFAC
TFFC
TFI
USA PATRIOT
Asset Forfeiture & Money Laundering Section

Bank Secrecy Act
Financial Action Task Force
Federal Bureau of Investigation
Non-Cooperative Countries and Territories
Office of Foreign Assets Control
Terrorist Financing and Financial Crimes
Office of Terrorism and Financial Intelligence
Uniting and Protecting America by Providing
Appropriate Tools Required to Intercept and
Obstruct Terrorism
This is a work of the U.S. government and is not subject to copyright protection in the
United States. The published product may be reproduced and distributed in its entirety
without further permission from GAO. However, because this work may contain
copyrighted images or other material, permission from the copyright holder may be
necessary if you wish to reproduce this material separately.
Page ii

September 30, 2008

Congressional Requesters
Countries with lax anti-money laundering regulation and enforcement
pose a national security threat to the United States because they provide
financial safe havens for criminal enterprise.1 Money launderingthe
process of disguising or concealing illicit funds to make them appear
legitimateis an increasingly serious issue, with new payment and
communications technologies opening up the world to transnational crime
and creating new options for cross-border funds transfers. Since
September 11, 2001, the United States has established a number of tools to
address the threat of money laundering and terrorist financing to the U.S.
financial system. One of its new tools was enacted in Section 311 of the
Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of
2001.2 The goals of Section 311 include strengthening U.S. measures to
prevent, detect, and prosecute international money laundering and the
financing of terrorism. In particular, Section 311 provides a mechanism for
the U.S. government either to prohibit U.S. financial institutions from
maintaining correspondent accounts3 with a foreign financial institution if
the account involves jurisdictions or institutions found to be of primary
money laundering concern, or to require recordkeeping and reporting on
certain accounts. The Department of the Treasury (Treasury) has
implemented the Section 311 mechanism against eight targeted financial
institutions and three jurisdictions in eight countries since 2002. Under the
law, this mechanism was imposed in most cases by rule-makingincluding
notice of the proposed rule and a comment period before the rule is
finalized. However, particular applications of Section 311 restrictions
raised questions in Congress about how effectively Section 311 was being
used.
National Money Laundering Strategy for 2007 (U.S. Government, Washington, D.C.: 2007).
Pub. L. 107-56, 115 Stat 272 (Oct. 26, 2001).
A correspondent account is an account established by a banking institution to receive

deposits from, make payments on behalf of, or handle other financial transactions for
another financial institution.
Page 1
GAO-08-1058 USA
SA Patriot Act
In this report, we (1) examined the process U. S. agencies used to

implement the USA PATRIOT Act Section 311 restrictions against targeted
financial institutions and countries and the results of these actions; (2)
assessed the process Treasury follows to determine whether to finalize or
withdraw a proposed rule; and (3) described how Treasury assesses the
impact of Section 311 restrictions.
To meet these objectives, we reviewed program documentation and
interviewed knowledgeable officials from key U.S. agencies at the
Department of Justice (Justice), Department of State (State), Treasury,
and the Board of Governors of the Federal Reserve System (Federal
Reserve) in Washington, D.C. We focused this performance audit on all
locations where the U.S. government has targeted financial institutions or
jurisdictions for Section 311 actions. These were Belarus, Burma, Latvia,
Macau, Nauru, Syria, Turkish Republic of Northern Cyprus, and Ukraine.
We met with U.S. and foreign government officials, and representatives of
financial institutions and financial institution associations, and reviewed
documents in Kyiv, Ukraine; Macau and Hong Kong, China; and Riga,
Latvia. We visited Kyiv, Ukraine; Macau and Hong Kong, China; and Riga,
Latvia, because they provided examples of different applications of
Section 311, specifically a targeted jurisdiction and targeted financial
institutions where Section 311 restrictions were finalized and withdrawn.
Treasury provided us with key documents it identified to show how it
implemented its 311 process. A detailed description of our scope and
methodology is included in appendix I of this report. We conducted this
performance audit from September 2007 through September 2008 in
accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives. We believe that the evidence
obtained provides a reasonable basis for our findings and conclusions
based on our audit objectives.
Results in Brief
To implement USA PATRIOT Act Section 311, Treasury used an evolving

informal rule-making process that followed requirements set forth in U.S.
law and modified this process after 2005.4 However, while Treasurys
Throughout this report, implementation refers to all aspects of the Section 311 process,
including targeting, publishing findings of primary money laundering concern and notices
of proposed rule making, and publishing final rules and withdrawals.
Page 2
process from 2002 through 2005 considered statutory factors established

in Section 311,5 its process for consulting with two U.S. agencies on
findings of primary money laundering concern sometimes made it difficult
to provide meaningful consultation during certain key phases of the
process, according to relevant agency officials. For the purpose of using
the new Section 311 authority, Treasury independently developed a list of
targeted financial institutions derived from several sources. It next
researched evidence for each targeted institution on the list to consider
factors established in Section 311. As a result, Treasury issued a finding in
the Federal Register that each of the eight financial institutions6 were of
primary money laundering concern and a proposed rule announcing its
intent to apply restrictions on the institutions. Before the proposed rule
was issued for public comment, Treasury provided it to Justice and State,
agencies with expertise in money laundering and international affairs, for
consultation on the finding, as required by the act. However, in some
cases, these agencies had limited time available to review documentary
evidenceas little as 2 daysand in one case limited access to facilities
for discussing classified information within the short time frames,
according to Justice and State officials. In the absence of operational
guidance with set time frames for this consultation requirement, officials
of these agencies expressed concern over the amount of time and
procedures they had for consultation. Starting in 2006, Treasury changed
its targeting procedures and, with Justice, established an interagency
working group to discuss potential threats to the U.S. financial system at
an earlier stage in the process. However, it is unclear whether the new
procedures improved this aspect of consultation because Treasurys
current targeting process has not resulted in any new Section 311 findings
since 2005.
Treasury determines whether to finalize or withdraw a proposed rule
under Section 311 by reviewing written comments and other information it
receives from interested parties in a process consistent with rule-making
requirements in the Administrative Procedure Act. However, Treasury has
taken years to complete this process for some cases, in part because (1)
For example, one factor to consider is the substance and quality of the administration of
the bank supervisory and counter-money laundering laws of the jurisdiction.
6
In targeting the three jurisdictionsthe countries of Burma, Nauru, and Ukraine

Treasury cited recommendations from the Financial Action Task Force (FATF), an
international body whose purpose is the development and promotion of national and
international policies to combat money laundering and terrorist financing as well
as internal Treasury research and other sources, according to Treasury officials.
Page 3
there are no requirements for it to designate time frames for when to

complete the action and (2) agency officials were unclear about lines of
authority designating which office within Treasury is responsible for
finalizing or withdrawing proposed rules. The duration of a proposed rule
was significant because, in all the cases we reviewed, U.S. financial
institutions took immediate action on the basis of an announced finding
and proposed restrictions, effectively implementing them before they were
finalized.7 Once a finding and notice of proposed rule-making are
published in the Federal Register, interested parties have 30 days to
provide written comments on the proposed rule to Treasury. The agency
reviews the comments it receives, considers them in its decision to finalize
or withdraw the proposed rule, and may sometimes meet with
representatives of the targeted financial institution and foreign
government to discuss their written comments or to receive additional
information. However, Treasury has taken as long as 5 years to complete
these actions for 1 of 11 cases and as little as 4 to 5 months for 4 cases. As
of February 2008, it had not completed action on three cases, which had
remained open for between 44 and 60 months beyond a 30-day comment
period. By April 2008, Treasury withdrew two of the notices of proposed
rule-making and officials said they are actively considering completing the
third. Officials at one Treasury office, identified by its officials as being
involved in making the determination to complete the Section 311 process,
were not aware these cases were still open until we brought this to their
attention. Officials of a second Treasury office, which Treasury attorneys
identified as responsible for implementing Section 311, were aware that
these three cases were open, as their status was listed on the office Web
site, but these officials did not believe that they were responsible for
finalizing or withdrawing them. Treasury officials said that it has no
written guidance specifically on implementing Section 311 to clarify these
responsibilities pursuant to management control standards.8
Treasury views Section 311 restrictions as effective, despite
acknowledging concerns expressed by U.S. and foreign government
officials, and representatives of financial institutions about the process.
Section 311 restrictions are intended to achieve (1) the anti-money
Financial institutions typically act immediately to comply with these proposed rules.
Federal management control standards require that the agencys organizational structure
clearly define key areas of authority and responsibility and establish appropriate lines of
reporting. GAO, Standards for Internal Control in the Federal Government,
GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999).
Page 4
laundering goal of isolating target financial institutions from the U.S.

financial system and (2) a broader national security goal of encouraging
foreign governments to strengthen their anti-money laundering laws and
regulations, according to Treasury officials. Treasury views Section 311
actions as effective in achieving the anti-money laundering goal because
U.S. financial institutions responded immediately to notices that Treasury
intended to issue a rule prohibiting them from continuing business with a
targeted foreign institution. An immediate response makes good business
sense to protect banks from risks to their reputation and possible
government penalties. Treasury views Section 311 as effective in achieving
the broader national security goal because several foreign governments
have strengthened their anti-money laundering laws and regulations in
response to Section 311 actions targeted against financial institutions in
their jurisdictions. However, Treasury does not view concerns about
Section 311s implementation as having an impact on the achievements of
Section 311. For example, some foreign government officials we visited
expressed concern with the implementation of Section 311 as not
affording them an opportunity to bring their own law enforcement or
regulatory actions against targeted financial institutions and not being
given sufficient information to do so. Justice officials said that in cases
where application of Section 311 is perceived as unsubstantiated,
countries may be less likely to cooperate with the U.S. government on
other sanctions or law enforcement matters.
We are recommending that the Secretary of the Treasury establish
implementing guidance for Section 311 of the USA PATRIOT Act that
would specify the responsibilities and activities of offices within Treasury
for implementing and finalizing Section 311 actions.
Treasury said that it will take action to clarify its Section 311 processes in
response to this reports recommendation, even though it emphasized that
the current coordination and implementation of Section 311 within
Treasury components today has been significantly improved. Although
Treasury said that it has well-defined mechanisms in place to implement
Section 311, it nonetheless stated that the Under Secretary of the Office of
Terrorism and Financial Intelligence will ensure that mechanisms for
implementing Section 311 are clarified in response to this report and its
recommendation. Justice and State had no comments on this report.
Background
Section 311 is one of many legal and regulatory resources that the United
States uses to combat money laundering and financial crime. U.S. laws and
programs aimed at combating money laundering include the Bank Secrecy
Page 5
Act (BSA), which includes Section 311 and authorizes Treasury to

promulgate regulations on the reporting and recordkeeping of certain
financial transactions; economic and trade sanctions implemented by the
Office of Foreign Assets Control (OFAC); and several Justice programs
focused on anti-money laundering. The United States is also a member of
the Financial Action Task Force (FATF), an intergovernmental body that
has created a comprehensive global framework for anti-money laundering
efforts and has called for countermeasures against countries that are not
complying with this framework.
These laws and programs, including Section 311, are part of a broad U.S.
money laundering strategy. Issued most recently in 2007, this strategy
states that it reflects the U.S. governments ongoing commitment to attack
money laundering and terrorist financing on all fronts, including the
formal and informal components of both the domestic and international
financial systems.9 The strategy focuses on three major goals: (1) to more
effectively cut off access to the international financial system by money
launderers and terrorist financiers; (2) to enhance the federal
governments ability to target major money laundering organizations and
systems; and (3) strengthen and refine the anti-money laundering
regulatory regime for all financial institutions to improve the effectiveness
of compliance and enforcement efforts. The strategy includes, among
other items, a commitment to target countries and financial institutions
that facilitate money laundering and terrorist financing, including using
the full range of measures provided by Section 311 of the USA PATRIOT
Act.
USA PATRIOT Act Section 311 is currently implemented by Treasurys
Financial Crimes Enforcement Network (FinCEN). Until 2004, the Office
of Terrorist Financing and Financial Crime (TFFC) implemented Section
311, according to Treasury officials. Both offices report to Treasurys
Office of Terrorism and Financial Intelligence (TFI). This office contains
intelligence and enforcement functions and has the stated twin missions of
safeguarding the U.S. financial system against illicit use and combating
national security threats. Figure 1 shows the organization of TFI.
U.S. Department of the Treasury, U.S. Department of Justice, and U.S. Department of
Homeland Security. The 2003 National Money Laundering Strategy. This strategy was
updated in 2007 as outlined in the 2007 National Money Laundering Strategy
(Washington, D.C.).
Page 6
Figure 1: Organization of the Terrorism and Financial Intelligence Office

Under Secretary
Office of Terrorism and
Financial Intelligence (TFI)
Office of Foreign
Assets Control (OFAC)
Assistant Secretary for

Terrorist Financing
Financial Crimes Enforcement

Network (FinCEN)
Deputy Assistant Secretary

Office of Terrorist Financing and
Financial Crime (TFFC)
Treasury Executive Office

for Asset Forfeiture (TEOAF)
Assistant Secretary
Office of Intelligence and
Analysis (OIA)

Office of Intelligence and
Analysis (OIA)

Office of Security
Internal Revenue ServiceCriminal Investigation (IRS-CI)

Source: Department of the Treasury.
Section 311 allows Treasury to require domestic financial institutions and

agencies to take certain special measures outlined in the provision if it
finds reasonable grounds to conclude that a designated foreign
jurisdiction, financial institution, or class of transactions is of primary
money laundering concern.10 In making a finding that a jurisdiction is of
primary money laundering concernin addition to any information that
the Secretary of the Treasury might deem relevantthe Secretary is to
consider seven potentially relevant factors. These additional factors
include the extent to which the jurisdiction offers special bank secrecy or
regulatory advantages to nonresidents as well as the substance and quality
of the bank supervisory and anti-money laundering laws in the jurisdiction.
In making a finding that an institution, transaction, or type of account is of
primary money laundering concern, the Secretary is to considerin
addition to any information the Secretary determines is relevantthree
potentially relevant factors, including the extent to which the institution is
used to facilitate money laundering and the extent to which it is used to
facilitate legitimate business. For a list of all potentially relevant factors
10
All Section 311 actions applied as of the date of this report concerned jurisdictions or
institutions only.
Page 7
Treasury is required to consider, see appendix II. According to the law, the
Secretary of the Treasury must consult with State and Justice before
designating an institution, jurisdiction, or class of transactions is of
primary money laundering concern.11
Once an institution is designated as being of primary money laundering
concern, the Secretary of the Treasury is required to consult with a variety
of parties including the Secretary of State, the Chairman of the Board of
Governors of the Federal Reserve System, and other appropriate federal
agencies,12 to determine which of the five available special measures to
apply. The first four special measures relate to requirements put on U.S.
financial institutions or agencies for record keeping, reporting, and
collection of certain financial information.13 The fifth special measure
prohibits U.S. financial institutions or agencies from opening or
maintaining correspondent accounts or payable through accounts for or
on behalf of a foreign bank if the account involves a designated
jurisdiction or institution.14 This special measure may be imposed only by
regulation. In selecting which special measures to apply, the Secretary is
required to consider four factors. These factors are listed in appendix III.
11
Justice, State, and Treasury officials described this consultation role as reviewing and
commenting on the evidence and documentation used to support a finding of primary
money laundering concern.
12
In addition, under Section 311, the Secretary of the Treasury is required to consult with
the Securities and Exchange Commission, the Commodity Futures Trading Commission,
the National Credit Union Administration Board, as well as other agencies and interested
parties as the Secretary finds appropriate. Federal Reserve officials said that their agencys
consultation role, and that of these other agencies, is to comment on technical language in
the rule related to banking supervision, rather than to provide feedback on whether the
finding is justified. Officials said that when reviewing a draft rule, the Federal Reserve
considers (1) what the effect of the proposed rule will be on the banking industry and (2)
whether the language in the rule is clear enough that its banks can easily understand and
implement it.
13
The first four special measures cover record keeping and reporting of certain financial
transactions, collection of information relating to beneficial ownership, collection of
information relating to certain payable through accounts, and collection of information
relating to certain correspondent accounts.
14
A payable through account is an account, including a transaction account, opened at a

depository institution by a foreign financial institution by means of which the foreign
financial institution permits its customers to engage, either directly or through a sub
account, in banking activities usual in connection with the business of banking in the
United States.
Page 8
The Administrative Procedure Act, which governs federal rule-making,

generally requires that notice of proposed rule-making be published in the
Federal Register.15 It also requires that, after the notice is given, the agency
provide interested persons an opportunity to participate in the rule-making
through submission of written data, views, or arguments. After
consideration of these submissions, the agency is required to incorporate
in the rules adopted a concise general statement of their basis and
purpose.
Process to Implement
USA PATRIOT Act
Section 311 Was
Consistent with Legal
Requirements, but
Some Agencies
Expressed Concerns
about Consultation
To implement USA PATRIOT Act Section 311, Treasury used an evolving

informal rule-making process that was consistent with requirements in
Section 311 and resulted in 11 cases in eight countries from 2002 through
2005. However, Treasurys process for consulting with two U.S. agencies
on findings of primary money laundering concern sometimes made it
difficult to provide meaningful consultation during certain key phases of
the process, according to Justice and State officials. In the absence of
established time frames, officials of these agencies expressed concerns
about the amount of time they had for consultation about Section 311
findings. In addition, Treasury did not include these other agencies with
expertise in money laundering and international affairs in developing its
initial list of targeted financial institutions. Starting in 2006, Treasury
changed its targeting procedures and, with Justice, established an
interagency working group to discuss potential threats to the U.S. financial
system at an earlier stage in the process. However, it is unclear whether
the new procedures improved consultation because Treasurys current
process has not resulted in any new Section 311 findings since 2005.
Treasury Developed
Informal Rule-making
Process to Implement USA
PATRIOT Act Section 311
To implement USA PATRIOT Act Section 311, Treasury generally pursued

the following steps from 2002 through 2005 that evolved over time:
15
Regulatory proposals or proposed amendments to existing regulations are known as

proposed rules. Notices of public hearings or requests for comments on proposed rules
are published in the Federal Register, on the Web sites of the regulatory agencies, and in
newspapers and other publications. Once a regulation takes effect, it becomes a final rule
and is printed in the Federal Register, the Code of Federal Regulations, and usually is
posted on the Web site of the regulatory agency.
Page 9
1. Identified target jurisdictions (countries) and financial institutions that

presented a potential threat to the U.S. financial system because of
money laundering or terrorist financing where Section 311 might be
applied.
2. Conducted research to determine which of these jurisdictions or
financial institutions were of primary money laundering concern and
determined which special measures should be applied.
3. Drafted a finding and special measures, usually in a notice of proposed
rule-making.
4. Reviewed the proposed rule for legal sufficiency.
5. Consulted with relevant agencies (Justice, State, the Federal Reserve,
and other agencies) on a finding and the application of special
measures.
6. Obtained clearance to proceed from Treasurys management.
7. Published a finding or notice of proposed rule-making in the Federal
Register.
8. Received and reviewed comments.
9. Consulted, if applicable, with Justice, State, and the Federal Reserve,
on the application of special measure 5.
10. Finalized or withdrew the proposed rule, as appropriate.
Treasury officials said that they had no single established process to
implement Section 311, but developed informal rule-making processes that
evolved over time. Prior to 2004, all work on Section 311 cases was
conducted by the Office of Enforcement and was primarily the
responsibility of Treasurys Deputy Assistant Secretary for Terrorist
Financing and Financial Crime and his staff. At the beginning of 2004,
Treasury officials told us a decision was made to move the function of
building an administrative record of the supporting evidence associated
with each Section 311 case and proposed rule to FinCEN. However, TFFC
is still involved in making the determination of when a proposed rule
should be published, finalized, or withdrawn, according to Treasury
officials.
Page 10
To date, Treasury has issued findings of primary money laundering

concern against three jurisdictions and eight financial institutions in eight
countries. The first finding of primary money laundering concern was
issued in December 2002 and the most recent finding occurred in
September 2005. The three countries in these findings were: (1) Ukraine,
(2) Nauru, and (3) Burma. The eight financial institutions in these findings
were: (1) Asia Wealth Bank (Burma), (2) Myanmar Mayflower Bank
(Burma), (3) Commercial Bank of Syria (Syria), (4) First Merchant Bank
OSH Ltd. (Turkish Cyprus),16 (5) Belmetalnergo/Infobank (Belarus), (6)
Multibanka (Latvia), (7) VEF Banka (Latvia), and (8) Banco Delta Asia
(Macau, China).
In all of the cases above, Treasury issued a designation of primary money
laundering concern. In all cases but one,17 Treasury also issued proposed
rules regarding the institution or jurisdiction designated to be of primary
money laundering concern. These rules proposed that U.S. financial
institutions employ Special Measure 5, prohibiting U.S. financial
institutions covered by the rule from opening or maintaining
correspondent accounts with foreign banks if the account involved
designated institutions or jurisdictions. Of the 10 proposed rules it issued
under Section 311, Treasury later withdrew 3 and finalized 6, with one rule
still outstanding. For additional information on these countries and
financial institutions, see appendix IV.
Treasury Identified
Targeted Institutions
Where Section 311 Might
be Applied
To implement the key first step of targeting areas of primary money

laundering concern, according to Treasury officials, Treasury identified
jurisdictions and financial institutions from several sources. These were
multilateral organization recommendations, U.S. law enforcement
investigations, joint strategy with State, and broader national security
concerns.
For the jurisdictions it targeted from 2002 through 2005the countries of
Burma, Nauru, and UkraineTreasury officials said they relied largely on
16
Subsidiaries of this bank included First Merchant Finance Ltd., First Merchant
International Inc., First Merchant Trust Ltd., and FMB Finance Ltd.
17
For Ukraine, Treasury issued a finding and announced its intention to issue a proposed
rule applying special measures 1 through 4. However, Treasury did not issue a proposed
rule and withdrew the finding against Ukraine 4 months later, based on Ukraines passing
anti-money laundering legislation, its commitment to implement this legislation, and the
FATFs decision to rescind a call for countermeasures against Ukraine.
Page 11
recommendations from the FATF, an international body whose purpose is

the development and promotion of national and international policies to
combat money laundering and terrorist financing, as well as on internal
Treasury research and other sources. The first opportunity to use Section
311 arose out of the FATFs Non-Cooperative Countries and Territories
(NCCT) process, according to Treasury officials. Once a country was
placed on the NCCT list, FATF member states, including the United States,
had an obligation to advise financial institutions in their country to give
enhanced scrutiny to financial transactions with financial institutions on
the FATF NCCT list. If after a year, a country had not taken the
appropriate measures to be removed from the NCCT list, then FATF would
request that its member countries place additional countermeasures
against the country, according to Treasury officials. Treasury officials told
us that prior to the passage of Section 311, the United States had no real
countermeasures to impose on countries when FATF called for them.
After Section 311 was passed, Treasury decided to use the provision in
response to the FATFs call for additional country countermeasures. In
early 2000, FATF called for countermeasures against Ukraine and Nauru
and, in 2003, called for countermeasures against Burma. Subsequently,
Treasury responded by invoking Section 311 against all three countries,
according to Treasury officials.
For financial institutions it targeted, Treasury used a different approach
from that used for jurisdictions. It developed a list of possible targets for
the purpose of using the new Section 311 authority, according to U.S.
government officials. In 2002 and 2003, Treasury officials said, the Office
of Enforcement, which preceded TFFC, assigned each of its five to six
staff to review a region of the world in order to review intelligence reports
and identify potential targets in each region. Ultimately, the office
produced a list of over 20 banks of money laundering concern that were
potential targets for Section 311 action. Treasury officials told us that their
offices developed the list of targeted financial institutions internally. While
Treasury officials said that they did not consult other agency officials with
expertise in money laundering and international affairs in developing the
initial list of targets, Treasury developed the list from various sources,
based on material developed by other agencies.
Treasury officials identified several sources as the impetus for its findings
of primary money-laundering concern for various financial institutions.
The finding against one bank occurred because there was an ongoing FBI
investigation of the bank, according to Treasury officials. They said that
Page 12
this case was the first opportunity Treasury had to use Section 311 in
conjunction with law enforcement.
The findings against two other banks emerged from a concern that a
foreign government was not reforming its anti-money laundering laws,
according to Treasury officials. They said that the U.S. government had
been concerned for some time with lack of anti-money laundering controls
in the country, but had not pursued the issue until it became apparent that
anti-money laundering controls were not going to be addressed. At that
point, Treasury met with State to develop a strategy for dealing with the
countrys anti-money laundering control issues. Following the Section 311
finding, the foreign government passed legislation to improve its national
anti-money laundering controls.
The findings against two other targeted banks emerged from several
national security working groups and were part of a higher National
Security Council strategy for these particular countries, according to
Treasury officials.
After developing the target list, Treasury conducted research to support a
finding for each targeted institution on the list. If it determined that it had
enough evidence to support a Section 311 finding, it published a proposed
rule in the Federal Register identifying the institution as being of primary
money laundering concern.
Treasury Process for

Implementing Section 311
Was Consistent with Legal
Requirements
Treasurys process for implementing Section 311 was consistent with

requirements set forth in the USA PATRIOT Act. From 2002 through 2005,
in accordance with USA PATRIOT Act Section 311, Treasury generally
considered the seven factors outlined in Section 311 when determining
whether a jurisdiction is of primary money laundering concern, including
the quality of bank supervision and anti-money laundering laws in the
jurisdiction. For example, for the jurisdiction of Burma, Treasury found
that Burma lacked a basic set of anti-money laundering laws and that the
Burmese Central Bank had no anti-money laundering regulations for
financial institutions. For proposed rules determining whether an
institution was of primary money laundering concern, Treasury considered
the three factors outlined in Section 311 for financial institutions. For
example, Treasury determined that the Commercial Bank of Syria was
being used to facilitate or promote money laundering because numerous
transactions were indicative of money laundering passed through that
bank. Treasury also determined that any legitimate business activity at the
Page 13
bank was significantly outweighed by the apparent use of the bank to

promote money laundering.
When determining which special measures to apply under Section 311,
Treasury considered the four factors required by the law. For example,
Treasury considered whether similar action was being taken by other
nations or organizations, the burden of special measures for U.S. financial
institution compliance, the impact of special measures on the international
financial system, and the effect of special measures on U.S. national
security and foreign policy when it announced Section 311 special
measures for Banco Delta Asia. Appendix II provides a more detailed
description of these factors. In addition, consistent with Section 311 of the
USA Patriot Act, Treasurys process for instituting special measure 5 was
imposed only through rule-making.
Two Agencies Noted

Limited Opportunities to
Contribute Their Views
While Treasury met the statutory requirements of USA PATRIOT Act

Section 311 to consult with designated agencies, Justice and State officials
expressed concerns with the amount of time they had for consultation
about Section 311 findings in the absence of established time frames.
Officials of two U.S. agencies expressed concerns about the amount of
time they had for consulting with Treasury on Section 311 cases prior to
issuing proposed rules. Before a proposed rule was issued for public
comment, Treasury provided it to Justice and State for consultation, as
required by the act.18 Though the consultations fulfilled requirements
under Section 311, Justice and State officials said that consultations often
occurred under short time frames, affording them insufficient opportunity
to provide meaningful input to the Section 311 process. Treasury
established no operational guidance with set time frames for this
consultation requirement. For example, one Justice official stated that
Justice generally received an e-mail from Treasury asking Justice if it
wanted to comment on a proposed rule and setting very tight time
18
In making a finding that reasonable grounds exist for concluding that a jurisdiction,
financial institution, transaction, or type of account is of primary money laundering
concern the Secretary of the Treasury is required to consult with the Secretary of State and
the Attorney General. When selecting special measures, the Secretary of the Treasury is
required to consult with the Chairman of the Board of Governors of the Federal Reserve
System, any other appropriate federal banking agencies, the Secretary of State, the
Securities and Exchange Commission, the Commodity Futures Trading Commission, the
National Credit Union Administration Board, and in the sole discretion of the Secretary,
such other agencies and interested parties as the Secretary may find to be appropriate.
Page 14
framesin one case as little as 1 to 2 dayswith no explanation as to why

time frames were so tight. Other Justice officials said that the short time
frame required that most of the feedback from Justice to Treasury was
oral, but that in one case neither Justice nor Treasury had access to a
Sensitive Compartmented Information Facility to discuss classified
information during the time period provided. As a result, all conversations
between the two agencies needed to be general and could not be
classified. This was problematic because one Justice official said that most
of Justices comments regarded evidence that was highly classified. Also,
short time frames made consultation difficult because they did not allow
the relevant Justice official who had reviewed the classified evidence time
to collect comments or concerns from other officials in Justice.
Treasury officials disagreed with concerns expressed about their
consultation roles. They stated their belief that Treasury coordinates
extensively. Treasury worked with other agencies on various cases. For
example, in one case, Treasury worked for months with the intelligence
agencies in developing the case and with State, including the Secretary of
State, on the designation, according to the officials. Treasury officials said
that they also consulted with States Undersecretary for Economic and
Business Affairs as required. In addition, Treasury officials said that they
delayed one case because of law enforcement interests in the targeted
institution and that law enforcement equities are a primary concern for
Treasury. Moreover, Treasury said that it has accommodated other
agencies concerns and always ensured that it did not endanger the
operational interests of law enforcement and the intelligence community.
Treasury stated that it had never gone forward with Section 311 actions
without consultation or over the objections of other agencies.
Treasury Changed Its

Process for Implementing
Section 311
In early 2006, FinCEN changed Section 311 procedures in order to make

better use of the staffs time, according to a Treasury official. Targeted
assessments of financial institutions that may be of primary money
laundering concern are now prepared instead of complete Section 311
packages. This is because preparing a complete package took
considerable time, according to this official, and then had to be assessed
to determine if there was sufficient evidence to justify a finding and
proposed rule. The process now begins when a request for preparing an
assessment comes from either (1) within FinCEN, based on a daily
FinCEN review of intelligence and public materials looking for threats to
the U.S. financial system or (2) other parts of Treasury or other agencies
with suggestions for a targeted assessment. In deciding whether or not to
prepare a targeted assessment, FinCEN first considers whether an
Page 15
institution has access to the U.S. financial system. If not, FinCEN takes no
action to assess it. Once an assessment is prepared, it is presented either
to the Under Secretary for Terrorism and Financial Intelligence or to the
Director of FinCEN, or both, for a policy decision on whether further
action should be taken. None of the targeted assessments has resulted in
Section 311 actions, but Treasury said it has selected other options to
address these threats.
The second change in the implementation process was the formation of an
interagency working group to review suspect banks. This group developed
over time but formally began meeting in January 2008. According to the
Chief of Justices Asset Forfeiture & Money Laundering Section (AFMLS),
he developed an informal working relationship with Treasury, primarily
through meetings with the Deputy Assistant Secretary of TFFC, on a
monthly or bimonthly basis. This evolved into a working group to review
suspect banks for possible anti-money laundering efforts, including
Section 311 actions. This process was formalized in the first 6 months of
2008 and the working group has met about 6 times. The Deputy Assistant
Secretary for TFFC at Treasury noted that this group gives the Section 311
process a broader perspective on suspect banks. The Chief of Justices
AFMLS section also said that this working group is a significant
improvement over Treasurys previous process for identifying banks for
possible Section 311 action, which had not been clear to Justice officials.
The working group also allows Justice to learn about possible Section 311
actions early, thus alerting Justice to actions that could impact ongoing
covert operations. The Justice official noted that one of its goals for the
working group is to maintain anti-money laundering expertise and a law
enforcement perspective, since TFFC is not a law enforcement agency.
The Justice official emphasized that the group has good potential but that
it will take another 6 months to see how well it works.
Membership in the suspect banks working group consists of a wide
variety of organizations. The Chief of Justices AFMLS co-chairs the group
with Treasurys Deputy Assistant Secretary for TFFC. Other members of
the group are State (representatives from its division of International
Narcotics and Law Enforcement bureau); staff from TFFC and FinCEN,
and the international division at Treasury; and components of the
intelligence community. These agencies are the core group that now
attends all meetings, but other agencies may be also asked to attend
specific meetings. State was not initially at the first meetings of the
working group but had been invited after the first few meetings when it
became clear that its input was needed.
Page 16
Treasurys Process for

Implementing Section
311 Followed
Requirements of the
Law but Took Years to
Finalize Some
Proposed Rules
It has sometimes taken Treasury years to finalize or withdraw a proposed

Section 311 rule, though these delays are not inconsistent with
requirements under the law. This has occurred, in part because (1) there
are no requirements to designate time frames for completing actions and
(2) Treasury officials were unclear about which office in Treasury was
responsible for finalizing or withdrawing proposed rules. Nonetheless, the
Section 311 proposed rules had a significant impact because U.S. financial
institutions took immediate action on the basis of their being announced,
effectively implementing them before they were finalized.
Treasurys Timeline for

Issuing Proposed and Final
Rules Follows
Requirements in the
Administrative Procedure
Act
Though sometimes delayed, Treasurys process for issuing proposed and

final rules follows requirements in the Administrative Procedure Act.19 The
Administrative Procedure Act generally requires that agencies issue a
proposed rule in the Federal Register and that they give interested persons
an opportunity to participate in rule-making through the submission of
written data, views, or arguments. Treasury officials said they reviewed all
comments they received in response to proposed rules. Officials said that
in some cases, they also met with affected financial institutions at the
institutions request. Treasury then determines whether to finalize or
withdraw a proposed rule. This step is important because, in contrast to a
proposed rule, a final rule imposes legal requirements on U.S. financial
institutions. However, rule-making requirements of the Administrative
Procedure Act do not place any time frames on officials specifying by
when a proposed rule must be finalized or withdrawn.20
19
In the two earliest uses of Section 311 cases, Treasury first issued findings of money
laundering concern prior to making a determination as to whether to issue a proposed rule.
In one of these cases (Nauru) it followed this finding with a proposed rule. In the other
case (Ukraine), Treasury rescinded the finding of primary money laundering concern.
20
See 5 U.S.C. 553.
Page 17
Treasury Took Years to

Finalize Some Proposed
Rules
In some cases, Treasury took years to finalize proposed rules. For

example, as of February 2008, 3 of the 11 cases it had opened still had not
been finalized, with two open for more than 3 years (44 and 49 months,
respectively) and one open for 5 years (60 months). These cases contrast
sharply with other Section 311 cases where Treasury took as little as 4
months to follow up on a finding of primary money laundering concern or
a proposed rule. Figure 2 shows the length of time proposed rules were
open for all Section 311 actions. Additional information on the date of
issuance of findings of primary money laundering concern, proposed rules,
and final rules for all Section 311 actions is in appendix IV.
Figure 2: Length of Time to Finalize or Withdraw Proposed Section 311 Rules

Ukrainea
60 months W
Nauru
Burma
5 months F
Asia Wealth Bank (Burma)
5 months F
Myanmar Mayflower Bank (Burma)
5 months F
Commercial Bank of Syria (Syria)
22 months
First Merchant Bank OSH Ltd. (Turkish Cyprus)b
44 months
Infobank (Belarus)c
49 months
Multibanka (Latvia)
15 months
VEF Banka (Latvia)
15 months
Banco Delta Asia (Macau, China)

2002
2003
18 months
2004
2005
2006
W
I
2007
2008
Year
Finding of primary money laundering concern
F Finalized
Notice of proposed rule
W Withdrawn
Concurrent finding and notice
Incomplete
Time between finding proposed and final rule/withdrawal (months)

Time between finding and finding withdrawal
Source: GAO analysis of Department of Treasury data.
a
A finding of primary money laundering concern was issued against Ukraine but no proposed rule was
issued. The finding of primary money laundering concern was withdrawn approximately 4 months
after it was issued on April 17, 2003, based on Ukrainian passage of anti-money laundering
legislation, its commitment to implement this legislation, and the FATFs decision to rescind a call for
countermeasures against Ukraine.
Page 18
First Merchant Finance Ltd., First Merchant International Inc., First Merchant Trust Ltd., and FMB
Finance Ltd. are subsidiaries of First Merchant Bank OSH Ltd. The subsidiaries of First Merchant
Bank OSH were included in the proposed rule.
The finding against Infobank includes Belmetalnergo.
Treasury lacks operational guidance and clear lines of authority for

finalizing proposed rules, which may have contributed to the length of
time it took to do so. Federal government management control standards
require that agencies have policies and procedures for implementing
management directives and that agencies clearly define key areas of
responsibility throughout their organization.21 However, Treasury does not
have policies and procedures that provide operational guidance as to
when proposed rules should be finalized or other procedures that
Treasury staff should follow when implementing Section 311 actions. In
addition, we observed that there are not clear lines of responsibility as to
which office within Treasury should finalize these proposed rules.
Treasury officials said that they follow the law and rule-making
procedures outlined in the Administrative Procedure Act when
implementing proposed rules. However, as mentioned earlier, the law
provides no time frames to which officials are expected to adhere between
the issuance of a notice of proposed rule-making and a final rule. Instead,
Treasury officials told us that the events that occur in a case and the
priorities of the office implementing the rule affect the amount of time that
elapses between when a rule is proposed and when it is finalized. For
example, one FinCEN official said that his work on finalizing a proposed
rule was delayed when another Section 311 case became a higher priority.
The proposed rule in this case was eventually finalized after more than 3
years.
Several additional factors accounted for the interval of time between
issuing findings and proposed rules and finalizing or withdrawing them.
Staff at FinCEN said that often the decision to postpone a case is made
simply because there are not enough resources to concentrate on all of the
cases at hand. For example, one official said that he was working on
resolving the proposed rule-making for one bank when another case
began. Once the second case became a priority, work on the first was put
on hold so that all staff could work on the other case, since only a few
staff within FinCEN work on Section 311 cases, according to the official.
21
GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999).
Page 19
In addition, Treasury officials said, they extended a comment period for

two banks, while in another case, they postponed final action on an
institution for several months pending completion of a law enforcement
investigation. Also contributing to the interval between a proposed rule
and a final or withdrawn rule is that Treasury monitors financial
institutions on an ad hoc basis after a proposed rule is issued. For
example, in one case FinCEN required several months in 2007 to confirm
whether banks under Section 311 restrictions were still in business and an
additional 9 months to withdraw the proposed rule after receiving the
information.
Treasury officials uncertainty about clear lines of responsibility added to
delays in finalizing proposed rules. Both FinCEN and TFFC officials told
us Treasury has prepared no written guidance outlining the
responsibilities of each bureau for administering Section 311. In addition,
it appears that the bureaus have not determined their respective
responsibilities in finalizing proposed rules. For example, in February
2008, three proposed rules were open, with two having been open for
more than 4 years beyond the 30-day comment period. Senior TFFC
officials were not aware that these cases were still open until we brought
this fact to their attention. In contrast to TFFC, FinCEN officials were
aware that these cases were open, as their status was listed on FinCENs
website. In addition, a lack of clear lines of responsibility led to confusion
over the responsibility for closing these cases. FinCEN officials did not
believe that they were responsible for closing them. They stated that TFI is
responsible for deciding when to decide to finalize or withdraw a
proposed rule, although FinCEN staff may sometimes take the initiative to
suggest that a rule be finalized or postponed. TFFC officials, on the other
hand, said that FinCEN was responsible for finalizing proposed rules.
TFFC officials followed up on the proposed rules that were outstanding
after we discussed the rules with them.22 Although Treasury stated that it
had started action to withdraw two of the proposed rules prior to our
discussion with TFFC, Treasury documents showed that FinCEN
previously had started to draft a withdrawal notice for one case in 2005
but never completed it, and had started again in October 2007 to draft
withdrawal notices for this and a second case, before issuing them 6
months later.
22
Two of these proposed rules were subsequently withdrawn in April 2008. One proposed
rule is still incomplete, but Treasury officials said they are currently consulting with other
agencies about whether to issue a final rule.
Page 20
In response to our observation of unclear lines of authority, senior

FinCEN and TFFC officials said that, pursuant to law and a related
Treasury order, FinCEN is the administrator of the BSA, of which USA
PATRIOT Act amendments are a part. Therefore, FinCEN is technically
responsible for administering Section 311. The Treasury officials added
that FinCEN coordinates closely with TFFC on all aspects of Section 311
rule-making.
Proposed Rules Had an

Immediate Impact on
Targeted Countries and
Financial Institutions
Despite taking years to finalize in some cases, proposed rules under

Section 311 had an immediate impact on targeted institutions and
jurisdictions. Treasury, State, and Justice officials told us that once a
proposed rule is issued, almost all U.S. financial institutions immediately
implement it voluntarily, stopping financial transactions with designated
financial institutions or jurisdictions. Federal Reserve and Treasurys
Office of the Comptroller of the Currency officials also said that U.S.
banks often treat proposed Section 311 rules as final and generally cut off
all financial interactions with the targeted institution. Federal Reserve
officials noted that this response to a proposed rule is unusual and, within
the context of BSA requirements, appears to be unique to proposed rules
under Section 311. Officials explained that U.S. banks may be taking this
action because the proposed rule is associated with a finding of primary
money laundering concern and, in many instances, Treasury issued a
finding together with a notice of proposed rule-making. Because it makes
good business sense to protect banks from risks to their reputation and
possible government penalties, banks may discontinue business with other
banks labeled a primary money laundering concern to reduce their
reputational risk. Banks may be concerned that continuing business with a
bank labeled as of primary money laundering concern would negatively
impact their reputation. Moreover, U.S. financial institutions must take
publicly available information into account when implementing their antimoney laundering programs and assessing risks. In addition, banks are
generally given a short time frame to come into compliance with rules
under Section 311 once they are finalized, so they may cut off all financial
interaction with a targeted entity when the proposed rule is issued to
ensure that they have minimized their risk of non-compliance.
Foreign government officials and representatives from targeted financial
institutions in countries we visited also agreed that proposed rules have an
immediate impact on these institutions and jurisdictions. Foreign
government officials told us that, following the issuance of proposed rules,
U.S. correspondent accounts of targeted banks were immediately closed.
Bank representatives also told us that the proposed rules had a significant
Page 21
impact on their business. Bank managers from one targeted institution

stated that the banks deposits had decreased by one third of their original
amount 3 days after the proposed rule was issued. In another case, a bank
lost approximately 80 percent of its business as a result of a proposed rule,
according to a bank representative. Attorneys for targeted financial
institutions with whom we spoke emphasized that the amount of time
between the proposed and final rule is important to targeted institutions
since a long delay can weaken a bank financially. One legal representative
noted that long delays between the proposed and final rule can put a bank
in a financial position where it cannot afford to take legal action in U.S.
court opposing special measures if a rule is finalized against it.
Treasury Views
Section 311 as
Effective, despite
Concerns Expressed
by Others about the
Process
Treasury views Section 311 restrictions as effective, despite concerns

expressed by others about the process. Section 311 restrictions are
intended to achieve (1) the anti-money laundering goal of isolating target
financial institutions from the U.S. financial system and (2) a broader
national security goal of encouraging foreign governments to strengthen
their anti-money laundering laws and regulations, according to Treasury
officials. Treasury views Section 311 actions as effective in achieving both
goals because U.S. financial institutions respond immediately to proposed
rules, and several foreign governments have strengthened their laws and
regulations in response to proposed rules. However, Treasury does not
view the long-term impact of proposed and final rules, including negative
foreign perceptions of their implementation, as outweighing the
observable achievements of Section 311.
U.S. Agencies and Foreign

Governments View Section
311 as Effective
U.S. and foreign government officials with whom we spoke said that they
consider Section 311 to be an effective anti-money laundering tool and to
have had a significant impact on target financial institutions and countries.
According to Treasury officials, Section 311 restrictions are intended to
achieve (1) the anti-money laundering goal of isolating target financial
institutions from the U.S. financial system and (2) a broader national
security goal of encouraging foreign governments to strengthen their antimoney laundering laws and regulations.
Several U.S. government officials said that Section 311 was effective in
achieving the first goal of isolating targeted financial institutions or
jurisdictions from the U.S. financial system. For example, one State official
said that the imposition of Section 311 was very effective for the majority
of countries targeted because financial systems in other countries were so
closely tied to the U.S. financial system. Generally, the imposition of a
Page 22
Section 311 action, beginning with the issuance of a proposed rule, caused
U.S. banks to voluntarily cut off transactions with the targeted financial
institutions even when proposed rules were not finalized. In addition, the
action has a chilling effect on foreign investment through the bank or in
the country because the banking industry pays close attention to the
actions of U.S. financial institutions, according to the official.
Several U.S. and foreign government officials said that Section 311 was
effective in achieving the second goal because it influenced some foreign
governments to strengthen their anti-money laundering laws and
regulations. Officials specifically cited the Latvia, Macau, and Ukraine
cases as examples of this. For example, one Treasury official noted that,
after the Section 311 action occurred, the government of Latvia worked
closely with the U.S. Embassy and State to address problems related to
financial crime which had caused Treasury to issue the Section 311
findings. While foreign government officials in these countries did not
dispute the statement, some said either that their governments had already
started to strengthen their laws and regulations when the Section 311
action occurred, or that they had responded as much or more to other
actions, such as the FATF call for countermeasures, than to the U.S.
restrictions.
Concerns about Section

311 Exist Both in the
United States and Abroad
Despite the achievements observed from initial monitoring of Section 311

actions, we identified several concerns about the impact of Section 311s
implementation. U.S. embassy officials with whom we spoke and
representatives of one targeted institution indicated that the impact of the
proposed rule continued on the institution and the country even after the
rule had been withdrawn. A number of U.S. banks have avoided holding
correspondent bank accounts with any banks in the country since the
Section 311 restriction was issued, according to embassy officials. They
noted that the issuance of Section 311 creates a large stigma against
banking with both the targeted banks under the proposed rule and other
banks in the country where the proposed rule was targeted. Embassy
officials said that several U.S. businessmen in the country have been told
by U.S. bankers that they decided to withdraw from doing business in the
country because of the Section 311 action. Foreign banking officials stated
that the proposed rule continued to impact the country even though it was
not targeted at the country specifically, and the United States had
acknowledged the governments efforts in the anti-money laundering
arena. One representative of a foreign institution pointed out that the
consequences of Section 311 action against his country continue and may
not have been intended. For example, American banks continue to be
Page 23
hesitant to do business with his countrys banks and many have cut off
business altogether. The official said that he believes this is because
American banks do not believe that guidelines are clear as to what antimoney laundering standards they should be following. In order to
minimize the risk of noncompliance with their regulators, many banks
have stopped business with his countrys banks altogether, regardless of
whether they believe that a bank is following U.S. anti-money laundering
standards.
Foreign regulatory and law enforcement agencies in some countries we
visited said that how Section 311 actions were implemented did not
provide them sufficient opportunity or information from U.S. government
sources to prosecute crimes or regulate the targeted banks. For example,
foreign government officials in one country that we visited noted that
there were many steps that the governments monetary authority could
have undertaken to put pressure on the targeted institution to improve its
anti-money laundering controls. These actions might have solved the
problem to the extent that the U.S. government would not have had to take
action, according to the officials. The officials said that the monetary
authority has the ability to obtain information from financial institutions,
attach conditions to institutional operation, work with the Financial
Intelligence Unit23 to investigate financial crimes, and, in more drastic
situations, appoint an advisor or director to take over a private bank.
Treasury officials said that it discussed Section 311 actions with foreign
government representatives when appropriate and provided ample notice
that a Section 311 action was forthcoming in some cases. In some
instances, however, such communications would be inappropriate,
according to Treasury officials. Treasury officials noted that it is obligated
under the USA PATRIOT Act to consider the extent to which that
jurisdiction is characterized by high levels of official or institutional
corruption when making a finding that a jurisdiction is of primary money
laundering concern.
Justice officials said that in cases where application of Section 311 is
perceived as unsubstantiated, it harms the United States. Countries may be
less likely to cooperate with the U.S. government on other sanctions or
law enforcement matters if they feel that the United States is acting in an
unreasonable or unsubstantiated manner regarding Section 311 or that the
23
Financial Intelligence Units are special government agencies that were created in several
countries around the world to deal with the problem of money laundering.
Page 24
United States cannot articulate the standards used to reach such a

decision. In addition, when countries distrust actions the United States has
taken under Section 311, their trust in U.S. actions in other areas is
undermined. A Justice official noted that there are times when Justice
needs to request the assistance of others based on classified information
and sometimes it cannot immediately reveal this information or its source.
In these cases, Justice needs foreign governments to trust the United
States and act on its requests. If trust in the U.S. government has been
eroded due to actions that appear to be unsubstantiated, then foreign
governments may be less likely to cooperate with Justice investigations.
In addition, some U.S. government officials, foreign government officials,
and representatives of banks in countries we visited, characterized the
imposition of Section 311 special measures as a political tool and as
sanctions. They saw Section 311 actions to be more like unilateral U.S.
sanctions used for political purposes than law enforcement mechanisms
used for anti-money laundering purposes.24 Some similarities between
Section 311 actions and sanctionssuch as their being unilateral,
designation of targeted persons or institutions, announcement of these
designations in the Federal Register, prohibition of certain financial
transactions, and denial of access to the U.S. financial system for
designated partiesmay contribute to this perception. Also, an official of
Treasurys Office of the Comptroller of the Currency said that the only
other process in his view that was similar to the Section 311 process is
Treasurys OFAC sanctions process. Under such sanctions, according to
the official, banks also automatically stop doing business with an
institution once it is cited.
Treasury officials acknowledge that this perception exists but maintain
that Section 311 is an anti-money laundering mechanism, not a sanction. In
24
A U.S. sanction is any unilateral restriction or condition on economic activity with

respect to a foreign country or foreign entity that is imposed by the United States for
reasons of foreign policy or national security. For example, financial sanctions may be
targeted against persons designated as either weapons of mass destruction proliferators or
global terrorists, depending on which set of sanctions is employed, and any transactions
with them by U.S. persons are prohibited. According to Treasury, the goal of this action is
to deny sanctioned parties access to the U.S. financial and commercial systems. Treasury
or State can make designations under these financial sanctions, which are published in the
Federal Register.
Page 25
testimony in April 2008,25 the Under Secretary of the Treasury for

Terrorism and Financial Intelligence stated:
Treasury adopted a new strategy of using targeted, conduct-based
financial measures aimed at particular bad actors. I intentionally refer
to these targeted actions as financial measures rather than
sanctions because the word sanctions often evokes such a negative
reaction. These targeted financial measures are proving to be quite
effective, flying in the face of a widely-held historical view that
dismisses sanctions as ineffective, harmful to innocents, or both. In the
case of broad, country-wide sanctions that are often perceived as
political statements, it can be difficult to persuade other governments
and private businesses to join us in taking action.
Treasury reiterated its view that Section 311 actions are not sanctions
despite the perception that they are by some U.S. officials and foreign
governments. Senior Treasury officials regularly work to educate the
public and foreign governments that these actions are not sanctions,
according to Treasury officials. Treasurys OFAC administers the U.S.
sanctions programs, which operate under very different authorities.
Finally, some U.S. government officials and foreign government officials
we met with in countries where financial institutions had been targeted
felt that there were several financial institutions of greater money
laundering concern that had not been targeted and suggested that
Treasury targeted financial institutions that were politically expedient
rather than financial institutions that were of the greatest concern. For
example, officials we spoke with about two countries we visited where
financial institutions were identified for Section 311 actions told us that
other banks in those countries had anti-money laundering controls that
were as bad as, or worse than the banks that were targeted. They noted
that it was not clear why Treasury chose the banks it chose as targets for
Section 311 action. Treasury officials explained that it was important for
Treasury to have flexibility in implementing Section 311 and that Treasury
could have targeted other banks in one country, for example, that were
larger than those it targeted. However, Treasury did not want to
undermine the countrys financial system but that, by selecting the smaller
banks, it would still send the message to government authorities that they
needed to reform the countrys anti-money laundering systems.
25
Testimony before the Senate Committee on Finance, Under Secretary for Terrorism and
Financial Intelligence Stuart Levey (Washington, D.C.: Apr. 1, 2008).
Page 26
Conclusion
U.S. government officials consider Section 311 to be an effective tool in

restricting access to the U.S. financial markets for financial institutions or
jurisdictions that are of primary money laundering concern and in
encouraging foreign governments to strengthen their anti-money
laundering laws and regulations. While using Section 311 has helped
achieve success towards these goals in specific instances, shortcomings in
Treasurys implementation of the law may be preventing the law from
achieving a greater potential. Without written operational guidelines to
clarify when to complete the Section 311 actions or clear lines of authority
for which office is responsible for completing the action, Treasury has
taken years to complete the Section 311 process for certain cases. Because
a proposed rule applying Section 311 in practice has had the same effect as
a final rule, Treasury may lack incentive to finalize or withdraw such rules.
More expeditious completion of Section 311 cases could be an important
counterbalance to concerns about the Section 311 process by affected
jurisdictions, financial institutions, and other parties.
Recommendation for
Executive Action
In order to improve implementation of the Section 311 process, we

recommend that the Secretary of the Treasury establish implementing
guidance for Section 311 of the USA PATRIOT Act. This guidance should
specify the responsibilities and activities of offices within Treasury,
including the Office of Terrorist Financing and Financial Crime and the
Financial Crimes Enforcement Network, for implementing and finalizing
Section 311 actions.
Agency Comments
and Our Evaluation
We provided a draft of this report to Justice, State, and Treasury. Justice

and State had no comments on this report.
Treasury said that it will take action to clarify its Section 311 processes in
response to this reports recommendation, even though it emphasized that
the current coordination and implementation of Section 311 within
Treasury components today has been significantly improved. It noted that
some of the reports conclusions were based on actions that occurred
years ago and that current coordination and implementation of Section
311 within components of Treasurys Office of Terrorism and Financial
Intelligence have addressed those actions. Although Treasury said that it
has well-defined mechanisms in place to implement Section 311, it
nonetheless stated that the Under Secretary of the Office of Terrorism and
Financial Intelligence will ensure that mechanisms for implementing
Section 311 are clarified in response to this report and its
recommendation.
Page 27
We appreciate Treasurys commitment to continuously improve the

implementation of Section 311 as an important tool against money
laundering and believe this is responsive to our recommendation regarding
the need to specify the responsibilities and activities of offices within
Treasury for implementing and finalizing Section 311 actions. As our
report noted, Treasury has modified the Section 311 process since its
inception, and the current process for its use differs in some significant
ways from the process that Treasury used for previous Section 311 cases.
We have made some additional modifications in our report to reflect
technical comments that Treasury provided for clarification.
As agreed with your offices, unless you publicly announce the contents of
this report earlier, we plan no further distribution until 30 days from the
report date. At that time, we will send copies to interested congressional
committees, and the U.S. Attorney General, and the Secretaries of State
and Treasury. We will also make copies available to others upon request.
In addition, this report will be available at no charge on the GAO Web site
at http://www.gao.gov. If you or your staff has any questions concerning this
report, please contact me at (202) 512-4347 or at yagerl@gao.gov. Contact
points for our Office of Congressional Relations and Public Affairs may be
found on the last page of this report. Staff acknowledgments are listed in
appendix VI.
Loren Yager
Director, International Affairs and Trade
Page 28
List of Requesters
The Honorable Ileana Ros-Lehtinen
Ranking Member
Committee on Foreign Affairs
House of Representatives
The Honorable Christopher H. Smith
Ranking Member
Subcommittee on Africa and Global Health
The Honorable Mike Pence
Ranking Member
Subcommittee on the Middle East
and South Asia
The Honorable Edward R. Royce
Ranking Member
Subcommittee on Terrorism, Nonproliferation
and Trade
The Honorable Dan Burton
Ranking Member
Subcommittee on the Western Hemisphere
The Honorable Joseph R. Pitts
Page 29

Appendix I: Scope and Methodology
To examine the process U.S. agencies used to implement the USA

PATRIOT Act Section 311 restrictions against targeted financial
institutions and countries, we interviewed knowledgeable officials from
the Treasury offices of Terrorist Financing and Financial Crimes (TFFC)
and the Financial Crimes Enforcement Network (FinCEN), as well as
officials from State, Justice, and the U.S. Federal Reserve System who had
been involved in the Section 311 process. We reviewed Section 311 of the
USA PATRIOT Act and the Administrative Procedure Act in order to
identify mandated requirements in law that Treasury must follow when it
issues and finalizes a proposed rule. We focused this performance audit on
locations where the U.S. government has targeted financial institutions or
jurisdictions for Section 311 actions. These were Belarus, Burma, Latvia,
We also met with foreign government officials in Riga Latvia; Kyiv,
Ukraine; and Macau and Hong Kong, China; as well as with representatives
of financial institutions in these countries that had been targeted for
Section 311 actions. These countries provided examples of different
applications of Section 311, specifically a targeted jurisdiction and
targeted financial institutions where Section 311 restrictions were finalized
and withdrawn. We developed a data collection instrument for Treasury to
more quickly identify relevant documents, including memoranda and
emails. This helped us confirm that Treasury followed the steps in its
Section 311 process for each of the cases for Belarus, Burma, Latvia,
We also reviewed unclassified and classified documents, including
financial and investigative records, that Treasury compiled in its
evidentiary files for each case; State cable traffic and its annual
International Control Strategy Report on money laundering and financial
crimes; and reports and guidance issued by the multinational Financial
Action Task Force.
To assess the process Treasury used to determine whether to finalize or
withdraw a proposed rule, we interviewed knowledgeable officials from
TFFC and FinCEN, as well as officials from State, Justice, and the Federal
Reserve who were involved in the 311 process. We also discussed this
aspect of the Section 311 process with representatives of relevant financial
institutions in New York and Washington, D.C.; Riga, Latvia; Kyiv, Ukraine;
and Macau, China. We reviewed public comments on proposed rules that
were issued under USA PATRIOT Act, Section 311. We also met with
officials of Ernst and Young, and Deloitte Touche Tomatsu, two
independent audit organizations that were hired by targeted financial
institutions to help them reform their anti-money laundering controls. We
reviewed documents identified by Treasury through our document
Page 30

collection instrument as being key documents related to the

implementation of Section 311 in Belarus, Burma, Latvia, Macau, Nauru,
Syria, Turkish Republic of Northern Cyprus, and Ukraine.
To determine how Treasury assessed the impact of Section 311
restrictions, we spoke with knowledgeable officials from TFFC and
FinCEN as well as officials from State and Justice who had been involved
in the 311 process. We also met with foreign government officials in Riga,
Latvia; Kyiv, Ukraine; and Macau and Hong Kong, China; as well as with
representatives of financial institutions in Latvia, Ukraine, and Macau that
were impacted by 311 actions. Also, we reviewed documents identified by
Treasury through our document collection instrument as being key
documents related to the implementation of Section 311 in Belarus,
Burma, Latvia, Macau, Nauru, Syria, Turkish Republic of Northern Cyprus,
and Ukraine. We also reviewed documentation, including sensitive and
classified cable traffic, which State provided for several 311 cases. State
and Treasury provided us with a combination of classified and unclassified
documents related to the cases.
We conducted this performance audit from September 2007 through
September 2008 in accordance with generally accepted government
auditing standards. Those standards require that we plan and perform the
audit to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives. We
believe that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
Page 31

Appendix II: Potentially Relevant Factors for
Designating a Jurisdiction or Institution as of
Appendix II: Potentially Relevant Factors for

Designating a Jurisdiction or Institution as of
The following table lists information the Secretary of the Treasury is
required to consider, in addition to any information that the Secretary
determines is relevant, when designating a jurisdiction or institution to be
of primary money laundering concern under USA PATRIOT Act Section
311.
Table 1: Potentially Relevant Factors to Be Considered When Designating a Jurisdiction or Institution to Be of Primary Money
Laundering Concern
Factors to Be Considered When Designating a Jurisdiction
Factors to Be Considered When Designating an Institution
1. Evidence that organized criminal groups, international terrorists, 1. The extent to which such financial institutions, transactions, or
or entities involved in the proliferation of weapons of mass
types of accounts are used to facilitate or promote money
destruction or missiles have transacted business in the jurisdiction. laundering in or through the jurisdiction including any money
laundering activity by organized criminal groups, international
terrorists or entities involved in the proliferation of weapons of
mass destruction or missiles.
2. The extent to which the jurisdiction or financial institutions
2. The extent to which such institutions, transactions, or types of
operating in that jurisdiction offer bank secrecy or special
accounts are used for legitimate business purposes in the
regulatory advantages to non-residents or non-domiciliaries of that jurisdiction.
jurisdiction.
3. The substance and quality of the administration of the bank
3. The extent to which such action is sufficient to ensure, with
supervisory and counter-money laundering laws of the jurisdiction. respect to transactions involving the jurisdiction and institutions
operating in the jurisdiction, than the purposes of this subchapter
continue to be fulfilled and to guard against international money
laundering and other financial crimes.
4. The relationship between the volume of financial transactions
occurring in that jurisdiction and the size of the economy of the
jurisdiction.
5. The extent to which that jurisdiction is characterized as an
offshore banking or secrecy haven by credible international
organizations or multilateral expert groups.
6. Whether the United States has a mutual legal assistance treaty
with that jurisdiction, and the experience of United States law
enforcement officials and regulatory officials in obtaining
information about transactions originating in or routed through or to
such jurisdiction.
7. The extent to which that jurisdiction is characterized by high
levels of official or institutional corruption.
Source: USA PATRIOT Act.
Page 32

Appendix III: Factors to Consider in Selecting
Special Measures
Appendix III: Factors to Consider in Selecting

Special Measures
The following are the factors the Secretary of the Treasury is required to
consider when selecting special measures for jurisdictions, financial
institutions, international transactions, or types of accounts of primary
money laundering concern under USA PATRIOT Act Section 311.
1. Whether similar action has been or is being taken by other nations or
multilateral groups.
2. Whether the imposition of any particular special measure would create
a significant competitive disadvantage, including any undue cost or
burden associated with compliance for financial institutions organized
or licensed in the United States.
3. The extent to which the action or the timing of the action would have a
significant adverse systemic impact on the international payment,
clearance, and settlement system, or on legitimate business activities
involving the particular jurisdiction, institution, class of transactions,
or type of account.
4. The effect of the action on United States national security and foreign
policy.
Page 33

Appendix IV: Additional Information on
Section 311 Cases

Section 311 Cases
The following table shows the dates for each finding of money laundering
concern, proposed rule, and final rule issued in cases to-date where the
U.S. government has applied USA PATRIOT Act Section 311.
Table 2: Issuance of Finding of Primary Money Laundering Concern, Proposed Rule, and Final Rule for Section 311 Cases
Section 311 case
Date of finding
of primary
money
laundering
concern
Date proposed
rule finalized or
withdrawn
Time between
proposed rule
and finalization
or withdrawal
(months)
Date of notice
of proposed
rule
Status of rule
Country of Ukraine
12/26/02
N/Aa
N/Ab
N/Ac
N/Ad
Country of Nauru
12/26/02
04/17/03
4/18/08
60
Withdrawn
Country of Burma
11/25/03
11/25/03
4/12/04
Finalized
Asia Wealth Bank

(Burma)
11/25/03
11/25/03
4/12/04
Finalized
Myanmar Mayflower
Bank (Burma)
11/25/03
11/25/03
4/12/04
Finalized
Commercial Bank of
Syria (Syria)
5/18/04
05/18/04
3/09/06
22
Finalized
First Merchant Bank

g
OSH Ltd (Turkish
Republic of Northern
Cyprus)
8/24/04
08/24/04
4/10/08
44
Withdrawn
Infobank (includes
Belmetalnergo)
(Belarus)
8/24/04
08/24/04
Incomplete
N/Af
Incomplete
Multibanka (Latvia)
Special
measure
1 4e
4/21/05
04/21/05
7/12/06
15
Withdrawn
VEF Bank (Latvia)
4/21/05
04/21/05
7/12/06
15
Finalized
Banco Delta Asia

(Macau)
9/15/05
09/15/05
3/14/07
18
Finalized
Source: Treasury.
a
Treasury did not issue a proposed rule for Ukraine.
Treasury withdrew the finding of primary money laundering concern on April 17, 2003. However,
there was no proposed rule issued.
There was no proposed or final rule for Ukraine. However, there was 4 months between the time the
finding of primary money laundering concern was issued and withdrawn.
d
The finding of primary money laundering concern was withdrawn and no proposed rule was issued in
this case.
Treasury did not issue special measures for Ukraine. However, the finding of primary money
laundering concern stated that Treasury intended to issue a proposed rule with one or more of special
measures 1 through 4.
f
This proposed rule has been open for 49 months as of the date of this report. Treasury officials stated
that they are reviewing whether or not to finalize or withdraw this proposed rule.
Page 34

Section 311 Cases
First Merchant Finance Ltd., First Merchant International Inc., First Merchant Trust Ltd., and FMB
Finance Ltd. are subsidiaries of First Merchant Bank OSH Ltd. The subsidiaries of First Merchant
Bank OSH were included in the proposed rule.
Page 35

Appendix V: Comments from the Department
of the Treasury

of the Treasury
Page 36

of the Treasury
Page 37

of the Treasury
Page 38

of the Treasury
Page 39

Appendix VI: GAO Contact and Staff
Acknowledgments
Appendix VI: GAO Contact and Staff

Acknowledgments
GAO Contact
Loren Yager at (202) 512-4347 or yagerl@gao.gov.
Staff
Acknowledgments
Anthony P. Moran, Assistant Director; Jeffrey D. Phillips; Lucia DeMaio;

Karen A. Deans; Etana Finkler; Mary E. Moutsos; Mark C. Speight; and
David S. Dornish made key contributions to this report.
(320508)
Page 40
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PRINTED ON
RECYCLED PAPER
EXHIBIT 15
Case
Case1:15-cv-01641-JEB
1:15-cv-01270-CRCDocument
Document
15-17
20 Filed
Filed08/18/15
11/12/15 Page
Page12ofof15
16
IN THE UNITED STATES DISTRICT COURT

FBME Bank Ltd.,

FBME Ltd.,
Plaintiffs,
v.
JACOB LEW
in his official capacity as Secretary of the
Treasury,
U.S. DEPARTMENT OF THE
TREASURY,
JENNIFER SHASKY CALVERY in her
official capacity as Director of the Financial
Crimes Enforcement Network,
FINANCIAL CRIMES ENFORCEMENT
NETWORK,
Defendants.
)
)
)
)
)
)
)
)
)
)
)
)
)
) Civil Action No. 1:15-CV-1270 CRC
)
)
)
)
)
)
)
)
)
)
)
_______________________ )
DECLARATION OF JENNIFER SHASKY CALVERY
Case
Document
15-17
20 Filed
Filed08/18/15
11/12/15 Page
Page23ofof15
16
DECLARATION OF JENNIFER SHASKY CALVERY

I, Jennifer Shasky Calvery, declare the following under penalty of pe1jury:
1. I am the Director of the U.S. Department of the Treasury's Financial Crimes
Enforcement Network ("FinCEN") and have held this position since September 2012.
Prior to becoming the Director ofFinCEN, I spent 15 years at the U.S. Department of
Justice ("DOJ'') as a federal prosecutor focused on combating money laundering and
organized crime. My most recent position at the DOJ was Chief of the Asset Forfeiture
and Money Laundering Section of the Criminal Division. In that position, I was
responsible, among other things, for overseeing the money laundering- and sanctionsrelated prosecutions of financial institutions, and the development ofDOJ's anti-money
laundering policy.
2. I am familiar with the mission and operations of FinCEN. I am also familiar with
FinCEN's Final Rule regarding FBME Bank Ltd. ("FBME"), the Notice of Finding and
Notice of Proposed Rulemaking ("NPRM"), and the interactions between FinCEN and
FBME and its counsel. I make this declaration based on information within my personal
knowledge and information or provided to me in my official capacity.
3. I have been made aware of the Complaint and Plaintiffs' Motion for a Preliminary
Injunction filed in this action by FBME and FBME Ltd. This declaration is made in
connection with Defendants' Response to Plaintiffs' Motion for a Preliminary Injunction.
FinCEN's Mission and Authority
4. FinCEN is a bureau of the U.S. Depa11ment of the Treasury. The Director ofFinCEN is
appointed by the Secretary of the Treasury and reports to the Treasury Under Secretary
for Terrorism and Financial Intelligence. As described in its public mission statement,
FinCEN's mission is to safeguard the United States financial system from illicit use, as
well as to combat money laundering and promote national security through the collection,
analysis, and dissemination of financial intelligence and the strategic use of financial
authorities.
5. FinCEN is the administrator of the Bank Secrecy Act ("BSA"), a legislative framework
including provisions established by the Currency and Financial Transactions Rep01ting
Act of 1970, as amended by Title III of the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of2001
(the "USA PATRIOT Act") Pub. L. No. 107-56 (Oct. 26, 2001) and other legislation, and
codified at 12 U.S.C. 1829b, 12 U.S.C. 1951-59, and 31 U.S.C. 5311-5314 and
5316-5332. The BSA is the nation's first and most comprehensive Federal anti-money
laundering and counter-terrorism financing (AML/CTF) statute. In brief, the BSA
authorizes the Secretary of the Treasury to issue regulations requiring banks and other
financial institutions to take a number of precautions against money laundering and other
financial crime. This includes requiring banks and other financial institutions to establish
AML programs and to maintain ce~tain records and file ce11ain reports that have a high
1
Case
Document
15-17
20 Filed
Filed08/18/15
11/12/15 Page
Page34ofof15
16
degree of usefulness in criminal, tax, or regulatory investigations or proceedings, or in the

conduct of intelligence and counter-intelligence activities, including analysis, to protect
against international terrorism. See 31 U.S.C. 5311; 5318(h).
6. The Secretary of the Treasury has delegated to the Director ofFinCEN the authority to
implement, administer, and enforce compliance with the BSA and associated regulations.
See Treasury Order 180-01 (July I, 2014).
7. FinCEN carries out its mission by receiving and maintaining reported financial
transactions data; analyzing and disseminating those data for law enforcement and
regulatory purposes; issuing regulations interpreting the BSA and related guidance;
providing advisories and other analyses of financial data to regulated financial
institutions; enforcing compliance with the BSA and its implementing regulations; and
building global cooperation with counterpart organizations in other countries and with
international bodies.
8. FinCEN receives a variety of different types ofrepmis from U.S. financial institutions.
These include, for example, reports of currency transactions for amounts over $10,000
("CTRs"); reports of foreign bank and financial accounts ("FBARs"); registrations of
money services businesses ("RMSBs"); rep otis of cash payments of more than $10,000
received by a trade or business ("Form 8300s"); and suspicious activity repotis ("SARs").
9. The most sensitive of these reports are SARs. Under the SAR reporting requirement,
banks and other financial institutions are required to repmi transactions that the
institution "knows, suspects, or has reason to suspect" involve possible illegal activity
and which meet other specified threshold requirements. See, e.g., 31 C.F.R.
1020.320(a) (SAR reporting requirement for banks). Communicating information
about potential criminal activity is sensitive and carries the potential for significant risk to
the institution and to its employees if it is disclosed publicly that the institution or its
employees reported such information. Disclosure also has the potential to alert illicit
actors that their transactions are subject to repmiing, and to aid them in evading BSA
requirements and other methods to detect their activities. To protect repmiing financial
institutions and their employees, and to encourage honest and open reporting of
suspicious activity, the BSA and its implementing regulations prohibit financial
institutions and their employees from disclosing SARs, or any information that would
reveal the existence of a SAR, in response to subpoenas or otherwise. See, e.g., 31
U.S.C. 5318(g); 31 C.F.R. 1020.320(e)(l). Violations carry both civil and criminal
liability. See 31 U.S.C. 5321, 5322. The BSA and its implementing regulations also
require banks and other financial institutions to notifY FinCEN when they receive any
requests for such information. Limited exceptions exist for disclosures of SARs to law
enforcement agencies and financial regulators, provided that these do not result in
unauthorized SAR disclosures. Financial institutions are specifically exempted from
liability for repotiing in accordance with these requirements. See, e.g., 31 C.F.R.
1020.320(f).
10. In accordance with the BSA and with authorities granted to FinCEN under 31 U.S.C.
310, FinCEN maintains a central repository that incorporates the different types of
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reports described in paragraph 8, above. These data include more than 190 million
records and are a primary tool for law enforcement agencies in the detection and
prevention of money laundering, terrorist financing, and other criminal activity.
Section 311
11. Section 311 of the USA PATRIOT Act ("Section 311"), codified at 31 U.S. C. 5318A,
grants the Secretary of the Treasmy the authority, upon finding that reasonable grounds
exist for concluding that a foreign jurisdiction, financial institution operating outside of
the United States, class of transaction, or type of account is of "primary money
laundering concern," to require domestic financial institutions and financial agencies (for
example, banks) to take certain "special measures" with respect to the entity identified as
a primary money laundering concern.
12. Pursuant to Section 311, upon finding that a foreign jurisdiction, financial institution
operating outside of the United States, class of transaction, or type of account is of
primary money laundering concem, the Director may impose one or more of the
following special measures on domestic financial institutions and financial agencies with
respect to that concern: (i) requiring recordkeeping and reporting of ce1tain financial
transactions; (ii) requiring information relating to beneficial ownership; (iii) requiring
information relating to ce1tain payable through accounts; (iv) requiring correspondent
account customer information; and (v) imposing prohibitions or conditions on opening or
maintaining certain correspondent or payable through accounts.
13. In the title of the USA PATRIOT Act that established Section 311, Congress recognized
that "money launderers subve1t legitimate financial mechanisms and banking
relationships by using them as protective covering for the movement of criminal proceeds
and the financing of crime and terrorism, and, by doing so, can threaten the safety of
United States citizens and undermine the integrity of United States financial institutions
and of the global financial and trading systems upon which prosperity and growth
depend." Pub. L. No. 107-56, 302(a)(3). Congress also recognized that "correspondent
banking facilities are one of the banking mechanisms susceptible in some circumstances
to manipulation by foreign banks to permit the laundering offunds by hiding the identity
of real parties in interest to financial transactions." !d. 302(a)(4). Finally, Congress
recognized that "money laundering, and the defects in financial transparency on which
money launderers rely, are critical to the financing of global terrorism and the provision
of funds for ten'Ol'ist attacks." !d. 302(a)(2). Accordingly, Congress has said that a
purpose of the title including Section 311 is to provide the Secretary of the Treasury
"with broad discretion, subject to the safeguards of the Administrative Procedure Act, to
take measures tailored to the particular money laundering problems presented by specific
foreign jurisdictions, financial institutions operating outside of the United States, and
classes of international transactions or types of accounts." !d. 302(b )(2).
14. The Secretary has delegated implementation of Section 311 to the Director of FinCEN.
See Treasury Order 180-01 3.
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15. Section 311 does not provide a separate definition of a "primary money laundering
concern." 31 U.S.C. 5318A(a), (c). Rather, it directs FinCEN's Director to consider a
number of statutory factors in making such determinations. 31 U.S.C. 5318A(a)
(stating that special measures may be imposed ifFinCEN's Director finds a financial
institution operating outside of the United States is of "primary money laundering
concern, in accordance with subsection (c)" of the statute). Pursuant to subsection (c) of
5318A, in determining whether a financial institution operating outside of the United
States is a "primary money laundering concern," the statute requires the Director to
consult with the Secretary of State and the Attorney General, and to consider "such
information as the [Director) determines to be relevant, including the following
potentially relevant factors: ... (i) the extent to which such financial institutions,
transactions, or types of accounts are used to facilitate or promote money laundering in or
through the jurisdiction, including any money laundering activity by organized criminal
groups, international terrorists, or entities involved in the proliferation of weapons of
mass destruction or missiles; (ii) the extent to which such institutions, transactions, or
types of accounts are used for legitimate business purposes in the jurisdiction; and
(iii) the extent to which such action is sufficient to ensure, with respect to transactions
involving the jurisdiction and institutions operating in the jurisdiction, that the purposes
of this subchapter continue to be fulfilled, and to guard against international money
laundering and other financial crimes." !d. 5318A(c)(2).
16. Although the statute requires the Director to consider ceJiain prescribed factors in making
a finding that a financial institution outside of the United States is of primary money
laundering concern and imposing a special measure, it does not require any particular
outcome under these factors. The statute does not direct that any one factor be given
more weight than other information the Director might choose to consider, or preclude
consideration of other, additional factors at the Director's discretion. Nor does the statute
require any determination that the designated foreign financial institution be engaged in
money laundering, only that it be of primary money laundering "concern."
17. In accordance with (l) Congress's recognition that money launderers often use foreign
banks, and in particular foreign correspondent relationships with U.S. banks, as
protective camouflage for their activities, (2) its expressed intent to give the Director, by
authority delegated by the Secretary of the Treasury, broad discretion to address such
risks, and (3) the broad phrasing of the language of Section 311 itself, FinCEN applies a
plain language approach to the phrase "money laundering concem." FinCEN understands
this phrase in its colloquial sense to refer to a perceived risk or threat that justifies action
by the agency. In deciding whether a foreign financial institution is of "primary" money
laundering concem, FinCEN considers the specific factors mentioned in the statute,
including information suggesting that the institution is "used to facilitate or promote
money laundering in or through the jurisdiction," in particular by "organized criminal
groups, international terrorists, or entities involved in the proliferation of weapons of
mass destruction or missiles," as well as other relevant information as determined on a
case-by-case basis.
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18. In selecting which of the statute's five specified special measures to implement, the
Director consults with various federal regulators and the Department of State, and
considers: (i) whether similar action has been or is being taken by other nations or
multilateral groups; (ii) whether the imposition of any pa1ticular special measure would
create a significant competitive disadvantage, including any undue cost or burden
associated with compliance, for financial institutions organized or licensed in the United
States; (iii) the extent to which the action or the timing of the action would have a
significant adverse systemic impact on the international payment, clearance, and
settlement system, or on legitimate business activities involving the particular
jurisdiction, institution, class of transactions, or type of account; and (iv) the effect of the
action on United States national security and foreign policy. See 31 U.S.C.
5318(a)(4)(B). In deciding on whether to impose the fifth special measure, the Director
also consults with the Department of Justice. See 31 U.S. C. 5318(b)(5).
19. The first four special measures set f01th in Paragraph 12, above, by their terms are aimed
at gathering additional information, and may be imposed by regulation or immediately by
order. When imposed by order, they must be issued together with an NPRM, and the
order may not remain in effect beyond 120 days except pursuant to any rule promulgated
on or before the expiration of that 120-day period. The fifth special measure regarding
prohibitions on the opening or maintenance of correspondent accounts, may be imposed
only by regulation.
20. The fifth special measure allows the Director to impose prohibitions or conditions on the
opening or maintaining of correspondent or payable-through accounts by any domestic
financial institution or financial agency for or on behalf of a foreign banking institution,
if such correspondent account or payable-through account involves a foreign jurisdiction,
or financial institution operating outside of the United States, designated under Section
311.
21. A correspondent account is an account established by a U.S. financial institution for a
foreign financial institution to receive deposits from, or to make payments or other
disbursements on behalf of, the foreign financial institution, or to handle other financial
transactions related to such foreign financial institution. See 31 C.F.R. 10 I 0.605( c)(i).
Correspondent accounts enable banks to conduct business and provide services for their
customers in jurisdictions where the banks do not have a physical presence. A payablethrough account means a correspondent account maintained by certainfinancial
institutions for a foreign bank by means of which the foreign bank permits its customers
to engage, either directly or through a subaccount, in banking activities usual in
connection with the business of banking in the United States. See 31 C.F.R.
1010.61 O(b)(1 )(iii)(B).
22. The fifth special measure does not require that any domestic financial institution or
financial agency freeze funds in an account or accounts, nor does it take or vest any
property.
23. Special measures taken under Section 311 are prophylactic measures to guard against risk
to U.S. financial institutions. Section 311 does not impose civil or criminal liability
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against any foreign jurisdiction or foreign financial institution found to be of primary

money laundering concern. Among other things, it protects the U.S. financial system
from potential exposure to terrorists and other illicit actors. The fifth special measure
guards against such risk by imposing restrictions on domestic financial institutions or
financial agencies establishing or maintaining correspondent accounts and payablethrough accounts with the foreign financial institution that FinCEN determines to be of
primary money laundering concern. U.S. financial institutions use filtering software to
ensure that prohibited transactions are not processed through its correspondent accounts
and payable-through accounts as pmt of their compliance with these requirements.
24. Along with any finding of primary money laundering concern, FinCEN typically issues
an NPRM explaining which special measure is proposed. This is a regulatory process
subject to public notice and comment. Upon review of the comments received, and after
considering any other information available to FinCEN, the Director can proceed with a
final rule, withdraw the notice of finding and proposed rule, or keep the matter open for
fmther review.
25. Since 2002, Treasury has utilized its authority under Section 311 against four
jurisdictions and 15 financial institutions and, when applicable, their affiliates, based
upon the risks of money laundering associated with these entities, including that related
to various types of illicit conduct, such as terrorist financing, narcotics trafficking, and
organized crime. Depending on the information available to the agency, FinCEN has in
some cases decided not to finalize proposed rules imposing special measures. In other
cases, FinCEN has rescinded special measures imposed by final rule.
26. The four jurisdictions include: Ukraine (Notice of Finding issued in 2002 and withdrawn
in 2003); Naum (Notice of Finding issued in 2002, NPRM issued in 2003, and withdrawn
in 2008); Burma (rule finalized in 2004); and Iran (Notice of Finding and NPRM issued
in 20 II). The 15 financial institutions include: Myanmar Mayflower Bank (mle finalized
in 2004, and rescinded in 2012); Asia Wealth Bank (mle finalized in 2004, and rescinded
in 2012); Commercial Bank of Syria, including Syrian Lebanese Commercial Bank (rule
finalized in 2006); Info bank (now known as PJSC Trust bank) and its subsidiary,
Belmetalnergo (Belarus) (Notice of Finding and NPRM withdrawn in 2014); First
Merchant Bank OSH, Ltd. and subsidiaries (Northern Cyprus) (NPRM withdrawn in
2008); VEF Banka (Latvia) (rule finalized in 2006, and rescinded in 20 II); Multibanka
(Latvia) (Notice of Finding and NPRM withdrawn in 2006); Banco Delta Asia (Macau)
(mle finalized in 2007); The Lebanese Canadian Bank (Lebanon) (Notice of Finding and
NPRM issued in 2011); JSC CredexBank (Belarus) (Notice of Finding and NPRM issued
in 2012); Halawi Exchange Co. (Notice of Finding and NPRM issued in 2013); Kassem
Rrneiti & Co. For Exchange (Notice of Finding and NPRM issued in 2013); Liberty
Reserve S.A. (Notice of Finding and NPRM issued in 2013); Banca Privada d' Andorra
(BPA) (Notice of Finding and NPRM issued in 2015); and FBME (rule finalized 2015).
27. In all but two cases where FinCEN has proposed or imposed a special measure, it has
been the fifth special measure. In the two exceptions, Halawi Exchange Co. (78 Fed.
Reg. 24584 (Apr. 25, 2013)) and Kassem Rrneiti & Co. For Exchange (78 Fed. Reg.
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24576 (Apr. 25, 2013)), FinCEN imposed the first special measure immediately by order
and simultaneously proposed a rule to impose the fifth special measure.
FinCEN's Process for Taking Action under Section 311
28. FinCEN's process for determining whether to identify a financial institution operating
outside of the United States as a primary money laundering concern and to propose an
appropriate special measure begins with an investigation. Such investigations draw on a
broad range of information, including both publicly and non-publicly available
information. The non-publicly available information includes classified intelligence
information and privileged information, such as SAR reporting and law enforcement
information from U.S. and foreign law enforcement agencies. Once this information is
compiled into an administrative record by FinCEN, it is reviewed for legal sufficiency by
Treasury and Department of Justice attorneys. Based on that legal review, FinCEN may
engage in further investigation and review the administrative record to address any legal
concerns.
29. In accordance with Section 311, in deciding whether to make a finding of primary money
laundering concern, FinCEN consults with the Department of State and the Depatiment
of Justice. In deciding whether to impose a particular special measure, FinCEN consults
with the Chairman of the Board of Governors of the Federal Reserve System and any
other appropriate Federal banking agency, the Securities and Exchange Commission
("SEC"), the Conunodity Futures Trading Commission ("CFTC"), the National Credit
Union Administration Board ("NCUA"), and other agencies and interested parties as
FinCEN's Director may find appropriate. This interagency review helps to ensure that
FinCEN's proposed rulemakings and any final rules reflect a consideration of the
operational and policy interests of these other agencies as well as with the strategic
national security and foreign policy goals of the United States
30. Once the legal and interagency review mentioned above is complete, the final
administrative record, along with a recommendation as to whether to make a finding and
whether to impose a special measure, as well as proposed drafts of any related Notice of
Finding and NPRM, are presented to the Director of FinCEN for signature pursuant to
authority delegated from the Secretary.
31. Where possible, FinCEN seeks to provide public summaries, in its Notices of Finding
and Proposed Rulemaking, of classified and privileged information that supports the
imposition of special measures. This typically involves substantial interaction with the
agencies that provided such information to determine what may be approved for release
to the public.
32. Following the publication of a Notice of Finding and NPRM, FinCEN solicits
information from the public during a notice and comment period. FinCEN then reviews
submitted comments. After compiling public comments and other information obtained
by the agency following publication of the Notice of Finding and NPRM, FinCEN again
considers the totality of information available to it, engages in further legal review by
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Treasury and Department of Justice attorneys, and consults with other agencies as
appropriate, before making its final determination on whether to proceed with a finalmle
withdraw the notice of finding and proposed rule, or keep the matter open for further
review.
33. Section 311 of the USA PATRIOT Act explicitly contemplates the use of classified
information in FinCEN's determination that an entity is of primary money laundering
concern and to impose a special measure. See 31 U.S.C. 5318A(f) (providing that, "in
any judicial review of a finding of the existence of a primary money laundering concern
or the requirement for I or more special measures with respect to a primary money
laundering concern, made under this section, if the designation or imposition, or both,
were based on classified information ... such information may be submitted by the
Secretary to the reviewing comt ex parte and in camera.").
FinCEN's Notice of Finding and Notice of Proposed Rulemaking Regarding FBME
34. On July 22, 2014, FinCEN published a notice in the Federal Register explaining its
finding, on July 15, 2014, that reasonable grounds exist to conclude that FBME is of
primary money laundering concern, see 79 Fed. Reg. 42639 (July 22, 2014) (the "Notice
of Finding"), along with a related NPRM proposing to impose against FBME the fifth
special measure authorized by Section 311.
35. Following the July 22, 2014, Notice of Finding and NPRM, FinCEN reviewed:
(I) additional unclassified information obtained by FinCEN after publication of the
Notice of Finding and NPRM, including public comments on the Notice of Finding and
NPRM; and (2) additional classified or privileged information obtained by FinCEN after
publication of the Notice of Finding and NPRM, in determining whether to finalize the
rulemaking. Since the Notice of Finding and NPRM, FinCEN has been in regular
communication with FBME and its counsel regarding issues related to the Notice of
Finding and NPRM.
36. FinCEN conducted a phone call with FBME's U.S. counsel as early as the July 2014
weekend following the publication of the Notice of Finding and NPRM on FinCEN's
website on July 15,2014, and before they were published in the Federal Register.
FinCEN thereafter engaged in a series of phone calls, emails, and an in-person meeting to
respond to FBME's questions and to receive and discuss additional information provided
by the bank. That dialogue continued for a year. FinCEN repeatedly responded to phone
calls, emails, and letters from FBME and provided information in response to questions
from FBME where practicable consistent with the non-disclosure of classified and
statutorily privileged information.
37. FBME submitted 28 pages of comments on the Notice of Finding and Notice of Proposed
Rulemaking dated September 22, 2014, during the comment period. The comment
period closed September 22, 2014.
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38. Following the close of the comment period, FinCEN accepted six additional submissions
of information from FBME comprising hundreds of pages of additional documents dated
September 24, 2014; November 17, 2015; November 21,2015, two submissions on
December 1, 2015; and December 5, 2015. These submissions included audits by KPMG
and Ernst & Young from 2013 and 2014, respectively, that examined the effectiveness of
FBME's AML compliance controls, the latter of which purported to address the specific
factual findings in FinCEN' s Notice of Finding.
39. FinCEN also received comments from the American Bankers Association ("ABA"),
dated September 22, 2014; a joint comment from the Securities Industry and Financial
Markets Association ("SIFMA") and The Clearing House ("TCH"), dated September 22,
2014; and a separate comment from SIFMA, dated September 22,2014.
40. These comments- all from entities that represent U.S. financial institutions responsible
for implementing the Final Rule- did not dispute FinCEN's Notice of Finding but
requested that FinCEN consider adjusting the processes that financial institutions must
undertake in order to comply with the Final Rule.
41. FinCEN staff reviewed and considered all of the comments submitted during the
comment period, as well as information available to it subsequent to issuance of the
NPRM before deciding to issue a final rule imposing the fifth special measure.
42. FinCEN issued the Final Rule on July 29, 2015. It is to take effect on August 28, 2015.
See 80 Fed. Reg. 45057 (July 29, 2015).
FinCEN Responded to FBME's Multiple Submissions
43. FinCEN not only considered additional materials submitted by FBME months after the
close of the comment period. In response to FBME's requests, FinCEN also met in
person with the bank's representatives on January 21,2015, to provide FBME the
oppotiunity to present additional information, to answer its questions to the extent
possible, and to articulate its concerns.
44. Where FinCEN could, it confirmed when FBME correctly identified transactions with
which FinCEN was concerned. FBME submitted a letter to FinCEN on January 26,
2015, asking for confirmation as to whether Ernst & Young had correctly identified
accounts and customers in question in the Notice of Finding. Declaration ofM. Elizabeth
Peters Exh. 0. FinCEN responded to that letter on or about Febmary 24,2015 and
confirmed FBME's correct identification of one account. Declaration ofM. Elizabeth
Peters Exh. Q. FinCEN also noted in that response where it was unable to release any
information beyond the statements contained in the Notice of Finding for the other
transactions about which FBME had inquired. In those cases, FinCEN was unable to
release the additional information because it would reveal information that was classified
or otherwise protected from disclosure by statute.
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45. FinCEN considered FBME's suggestions and requests for clarifications and made
changes to the Final Rule based on information that FBME provided. In one instance,
FBME stated that it was not fined by the CBC in 2008, but that the CBC imposed an
administrative fine on FBME in 20 I 0. Exhibit I, pg. 20. FinCEN corrected the Notice of
Finding in the Final Rule to reflect that change. See 80 Fed. Reg. 45057 (July 29, 2015)
FBME also pointed out that FinCEN, in its Notice of Finding, had incorrectly attributed
the statement that FBME may be subject to a fine of up to 240 million euros. Exhibit 1,
pg. 21. FinCEN corrected the source of that statement in the Final Rule. See 80 Fed.
Reg. 45057 (July 29, 2015).
46. While FBME summarizes in its September 22, 2014 comment a 2011 Ernst & Young
audit that purpmiedly reviewed AML policies, procedures, and reports, FBME never
provided that audit to FinCEN.
47. As FinCEN noted in the Final Rule, both the 2013 KPMG audit and the 2014 Ernst &
Young audit identified several deficiencies in FBME's anti-money laundering
compliance program. ld. The 2013 KPMG audit, for example, recommended
"rethinking the overall approach [to FBME's risk management] to develop a
comprehensive AMLICTF risk analysis .... " Declaration ofM. Elizabeth Peters Exh. E,
pg. 12. As FinCEN set forth in its Final Rule, the KPMG audit also identified to FBME
several deficiencies of medium and high significance, including the bank's complex
group structure, the monitoring of accounts for politically exposed persons, requirements
surrounding proof of income for individuals, and processes establishing the business and
economic profile of the customer. See 80 Fed. Reg. 45057 (July 29, 2015).
48. The 2013 KPMG audit also made the following recommendations, among others:
performing comprehensive AML risk assessments, developing processes to document
AML investigations, integrating ultimate beneficial ownership information into the
banking system, acknowledging risks associated with the hold mail system (in other
words, risks associated with using the bank's address as the customer's address),
evidencing the source of funds, applying a risk based approach to approved third patties,
assessing the adequacy of an approved third party's AML compliance, and developing an
AML control plan. Declaration ofM. Elizabeth Peters Exh. E, pgs. 17-32, 51.
49. The use of shell companies (e.g., a legal entity that exists primarily on paper, but has no
place of business or significant operations or assets) is patiicularly problematic from a
money laundering perspective because they can be used to conceal the source, ownership,
and control of illegal proceeds. Exhibit 2, pg. 4. Organized criminals exploit this
weakness and establish bank accounts in the names of shell companies, and then send
money globally from one financial institution to the next, disguised as legitimate business
activity. Id. In its Notice of Finding, FinCEN explained that FBME customers, including
its many shell company customers, have frequently used FBME's Cyprus address to
conduct collectively tens of millions of dollars of transactions. Using FBME's address
rather than the customer's address obscures the customer's true location, which makes it
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difficult for other banks to determine whether the customer is located in a high risk or
sanctioned jurisdiction. Such a practice is highly unusual and indicative of a bank's
potential complicity in its customers' illicit activities. See 79 Fed. Reg. 42640 (July 22,
2014).
50. A cornerstone of a strong BSAJAML compliance program is the adoption and
implementation of comprehensive customer due diligence policies, procedures, and
processes for all customers, pmiicularly those customers that present a higher risk for
money laundering and terrorist financing. The objective of customer due diligence should
be to enable the bank to understand its customers and the nature of their transactions
including the types of transactions in which a customer is likely to engage. These
processes assist the bank in determining when transactions are potentially suspicious. The
concept of customer due diligence begins with verifYing the customer's identity and
assessing the risks associated with that customer. Processes should also include enhanced
customer due diligence for higher-risk customers and ongoing due diligence of the
customer base. Effective customer due diligence policies, procedures, and processes
provide a critical framework that enables a bank to comply with regulatory requirements
and to report suspicious activity. As FinCEN also noted in the Final Rule, the 2014 Ernst
& Young audit, which was completed following the issuance of FinCEN's Notice of
Finding and NPRM, identified significant weaknesses in FBME's anti-money laundering
program, including for example, its anti-money laundering training program for its
employees and its documentation procedures with respect to customer identification and
customer due diligence.
51. FinCEN obtained and considered classified and privileged information dating from 2013
and 2014, indicating that different types of illicit actors continued to use FBME to
facilitate apparent money laundering activities. FinCEN continued to conduct additional
research following the publication of the Notice of Finding and NPRM, and obtained
additional information to that which it considered in the Notice of Finding and NPRM.
The activity detailed in these reports parallels and in some cases post-dates the 2013
KPMG and 2014 EY audits. FinCEN also stated that the bank took active steps in 2013
to evade oversight by its Cypriot regulator, as noted in the Notice of Finding. The entire
administrative record shows a continued pattern of information, including classified and
privileged reporting, of the bank being used by a range of illicit actors to facilitate
apparent money laundering, and this pattern appears to have continued despite the banks'
assertion that it has conducted repeated audits in 2011,2013, and 2014.
52. Before the Final Rule and since issuance of it, FinCEN has reviewed information
available about FBME in commercial databases that include a variety of banking
information, , including Banker's Almanac, the Clearing House Interbank Payments
System ("CHIPS"), The Global Banking Resource ("TGBR"), and Dunn & Bradstreet.
These sources show that FBME does not have any U.S. dollar correspondent accounts.
Exhibit 3. FBME's Cyprus branches have no correspondent accounts (including U.S.
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dollar and non-U.S. dollar accounts). FBME's Tanzania branches currently have only
non-U.S. dollar correspondent accounts. Id.
FinCEN's Imposition of the Fifth Special Measure
53. FinCEN repeatedly has extended its investigation of the bank to consider additional
information provided by FBME and to ensure that it has considered all available
information.
54. However, as explained in the Final Rule, information available to FinCEN from its
completed investigation reflects terrorist financiers, persons engaged in fraud and
cybercrime, narcotics traffickers, cover companies for entities for supporting the
proliferation of weapons of mass destruction, and other illicit actors using the bank to
facilitate money laundering activity over a significant period of time, with some activity
as late as 20 14. This is despite repeated compliance reviews and alleged implementation
of additional AML measures as a result of these reviews by the bank.
55. These threats- terrorist financing, fraud, organized crime, and the proliferation ofWMD
-are exactly the type of threats for which Congress meant Treasury to undertake
"effective counter-measures." Pub. L. 107-56 at 302(a)(2), (4), (9). The first four
special measures impose information-gathering or record-keeping requirements upon
those domestic institutions or financial agencies that have direct dealings with the entity
found to be of primary money laundering concern. Such information collection, without
other measures to prevent FBME from accessing the U.S. correspondent banking
services, would not address the threats known to FinCEN. The fifth special measure is
the only special measure that provides this protection, and is the special measure
normally proposed in cases where significant money laundering risks to the U.S. financial
system are detected.
56. Orders and regulations proposing and implementing specific special measures taken
under Section 311 are not static; they can be issued or rescinded over time as the Director
of FinCEN determines that a foreign jurisdiction, financial institution operating outside of
the United States, class of transactions, or type of account is no longer of primary money
laundering concern, or that other special measures appropriately can be used to address
the risk. In addition, special measures imposed against one jurisdiction, institution, class
of transactions, or type of account may vary from those imposed in other actions under
Section 311.
57. Section 311 is used to protect U.S. banks and the U.S. financial system from the risks of
money laundering and terrorist financing. Particular remedial actions by foreign
jurisdictions or foreign financial institutions may or may not assist in reducing the risks
that a foreign jurisdiction or foreign financial institution will be at risk from teiTOrist
financing or money laundering. But such remedial measures are not the stated purpose of
the statute, nor does the statute require the agency to delay taking action to protect against
such risks in order to allow efforts to remediate.
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58. Furthermore, FinCEN typically is not the regulator of foreign financial institutions
subject to 311 actions. FinCEN therefore does not have the authority to closely supervise
the compliance regimes of foreign financial institutions found to be of primary money
laundering concern under Section 311. Where FinCEN determines that a risk exists to
domestic financial institutions, it must take action to guard against that risk.
59. At the meeting between FBME and FinCEN on January 2 I, 20 I 5 and in a letter dated
May I2, 2015, FBME asserted that the fifth special measure is dispropmiionate and
excessive, especially as compared to other recent enforcement actions involving far more
egregious circumstances in which FinCEN imposed only a fine or civil money penalty.
FBME cited as examples FinCEN's November 2014 civil money penalty action against
North Dade Community Development Federal Credit Union ("North Dade") in Miami
Gardens, Florida, as well as other civil money penalty actions, and special monitors.
Financial institutions located or doing business within the United States are required to
maintain effective anti-money laundering programs, file required reports under the BSA,
and adhere to BSA record-keeping requirements. FinCEN has authority to issue civil
money penalties against domestic financial institutions that violate their BSA obligations,
including banks, credit unions, casinos, money services businesses, among other
industries. FinCEN does not have the same authority to examine, assess civil money
penalties, or require special monitors against foreign banks like FBME.
Actions by The Central Bank of Cyprus and The Bank of Tanzania with Respect to FBME
60. Established in I963, the Central Bank of Cyprus ("CBC") is the central bank ofthe
Republic of Cyprus, located in Nicosia. The CBC is responsible for safeguarding the
stability of Cyprus' financial system, and does so through the prudential supervision of its
banks, as well as the oversight of payment and settlement systems. Exhibit 4.
61. Established in 1965, the Bank of Tanzania ("BoT") is the central bank of Tanzania,
located in Dar-es-Salaam. The BoT's primary responsibility is to formulate, define and
implement monetary policy, directed to the economic objective of maintaining domestic
price stability, conducive to a balanced and sustainable growth of the national economy
of Tanzania. In furtherance of this responsibility, the BoT is responsible for the
protection and development of sound and well-managed banking institutions. The BoT is
the body that issues currency, the lender of last resort, the banker and fiscal agent of the
Government of Tanzania ("GoT"), the advisor to the GoT, the guardian of Tanzania's
international reserves, the supervisor of banks and financial institutions. Exhibit 5.
62. As stated in the Final Rule, on July 21, 20 I 4, the CBC, under the authority ofthe Cyprus
Resolution Act, issued a decree announcing that it would formally place FBME's Cyprus
branch "under resolution," allowing the CBC to take numerous unilateral measures
regarding FBME, including selling off Cyprus based FBME branch locations, to protect
FBME's depositors. See 80 Fed. Reg. 45057 (July 29, 2015). On July 24, 20I4, the
Bank of Tanzania took over management ofFBME's headqumiers in Tanzania because
of the potential effects of the CBC's actions on the Tanzanian banking system. Exhibit 6.
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63. Nothing in FinCEN's Final Rule requires any action by the CBC nor the BoT with
respect to FBME. FinCEN has never indicated to FBME, the CBC, or the BoT that its
Final Rule necessitates any measures by those foreign regulators, including liquidation m
sale of the banlc
The Potential for Harm to the Govenunent from a Delay of The Effective Date
64. Delaying the effective date of the FBME Final Rule would affect the obligation, and as a
result may affect the willingness and ability of U.S. banks to take actions needed to
protect against the specific threats of terrorism finance, fraud, and WMD proliferation
identified in the Finding and Final Rule. This increases the chance that U.S. banks will
be exposed to this activity indirectly througll their relationships with foreign
correspondent banks.
I declare under penalty ofpe1:imy that the foregoing is true and correct to the best of my
knowledge.
Dated: August 18,2015
14
EXHIBIT 16
Press release
AGENCY FOR THE RESTRUCTURING OF FINANCIAL ENTITIES (AREB)
AREB expects to present the resolution plan for BPA in

mid-June
Andorra la Vella, 2nd June 2015.- The Agency for the Restructuring of Financial Entities (AREB,
by its acronym in Catalan) has completed its first month fully constituted and it considers this
milestone a suitable opportunity to publicly share information regarding the current situation
and next steps on the resolution of Banca Privada d'Andorra, SA ("BPA").
It is important to take into account what turned this matter into a unique crisis within the
range of the global banking crisis: the state of operational disability that followed FinCEN's
announcement last March 10th, in which the US agency considered Banca Privada dAndorra
as a Foreign Financial Institution of Primary Money Laundering Concern and stated its
intention to limit BPA's operational capacity in the near future, which was immediately done
by most correspondents, custodians, counterparties and operators, immediately and
dramatically limiting the operational capacity of BPA. The impact of this operational limitation
was so severe that it triggered a series of measures by the Andorran authorities that are well
known to the public.
Among these measures, in accordance with Act 8/2015 of April 2nd, of urgent measures to try
to implement mechanisms of restructuring and resolution of financial entities, it was the
constitution of AREB, which bears responsibility for designing and implementing the resolution
plan for BPA using the tools conferred by the legislation, in order to minimize losses and
maximize the preservation of its value, as well as prioritizing the anchorage and the
international significance of the Andorran financial sector.
Together with the competent authorities of the country and the professional teams of BPA,
AREB is working to unlock operations with domestic and foreign counterparts to carry out the
resolution process effectively; calculate the value of the assets and liabilities of the entity; be
able to identify which operations from the bank and its clients are viable in the long term, and
keep providing BPA with the necessary liquidity to continue serving its customers.
The next goal will be the presentation of the BPA resolution plan to the Board of Directors of
AREB for immediate approval and orderly implementation. The approval is expected in midJune. Then, the plan will be submitted to the Andorran Government and Parliament.
It is not feasible at present to exactly define the various scenarios of resolution for BPA until
completion of the internal works of analysis. AREB wants to make clear that the anticipation of
these possible scenarios is mere speculation.
AREB also appreciates the understanding and cooperation of all clients and suppliers of BPA
that are being affected by a process in which the protection of their interests is the main
priority. A process, however, that generates serious difficulties in their daily operations.
Besides, AREB wants to highlight the excellence, commitment and involvement of BPA
professionals.
EXHIBIT 17
Written Testimony of David S. Cohen

Under Secretary for Terrorism and Financial Intelligence
United States Department of the Treasury
United States Senate Committee on Foreign Relations
Iran Nuclear Negotiations: Status of Talks and the Role of Congress
January 21, 2015
Good morning. Chairman Corker, Ranking Member Menendez, and distinguished members of
the committee: Thank you for the invitation to appear before you to discuss the state of
sanctions on Iran, and whether our efforts to achieve a diplomatic solution to one of the most
difficult and enduring national security problems that we face Irans nuclear program would
be advanced if Congress were to enact new sanctions legislation at this time.
I will focus my testimony today on the robust international sanctions regime that helped bring
Iran to the negotiating table, the intense pressure that sanctions continue to place on the Iranian
economy, and our continued vigorous enforcement of those sanctions over the course of the Joint
Plan of Action (JPOA). And I will explain why new sanctions legislation now even if
implementation were delayed would more likely hinder, rather than advance, the prospects for
a diplomatic solution that verifiably prevents Iran from obtaining a nuclear weapon.
At the outset, let me reiterate that no issue is of greater concern or urgency to the United States,
and no issue occupies more of the time and attention of my team at the Department of the
Treasury, than ensuring that Iran does not acquire a nuclear weapon. Iran in possession of a
nuclear weapon would directly threaten U.S. and international security, increase the risk of
nuclear terrorism, undermine the global nonproliferation regime, and risk setting off an arms race
in the Middle East. From the outset of his administration, President Obama has made clear that
we will do everything in our power to prevent Iran from obtaining a nuclear weapon.
For us at Treasury, that has meant working within the Administration, with Congress, and with
partners around the world to impose the most effective set of financial and economic sanctions in
history. The sanctions have impeded Irans ability to acquire material for its nuclear program,
isolated it from the international financial system, drastically slashed its oil exports, deprived it
of access to a sizeable portion of its oil revenues and foreign reserves, and severely constrained
its overall economy.
In many respects, the global sanctions regime has achieved exactly what it was designed to do:
encourage Iran to come to the negotiating table, not to posture, pontificate, and procrastinate, but
to engage in serious diplomacy over its nuclear program. Iran is negotiating because it knows
that relief from the sanctions can come only in exchange for taking concrete and verifiable steps
that will guarantee that it cannot produce a nuclear weapon.
1
As this committee knows, those negotiations are ongoing. They began when we negotiated the
JPOA, which was reached on November 2013. In November 2014, the P5+1 and Iran decided to
extend the talks for another seven months. We agreed to the extension because our negotiators
have made meaningful progress, and because it takes time to conduct the highly technical
deliberations necessary to get a comprehensive solution that will cut off each of Irans possible
pathways to a nuclear weapon.
We may ultimately reach a comprehensive solution; we may not. The President last week
reiterated that the chances that we get a deal are probably less than 50 percent. But we, like you,
are committed to testing fully the diplomatic path.
That is why we have continued to maintain throughout the JPOA period the intense financial and
economic pressure that brought Iran to the table in the first place. And that is also why we must
give our negotiators the time and space they need to pursue the possibility of a comprehensive
solution, without undercutting their efforts, fracturing the coalition, or, with the best of
intentions, sending mixed signals about the interest of the United States in a diplomatic
resolution.
The International Sanctions Regime Remains Robust and Vigorously Enforced
When Iran and the P5+1 concluded the JPOA in November 2013, Iran committed to halt
progress on its nuclear program, roll it back in important respects, and provide unprecedented
access to and inspections of its enrichment facilities. In exchange, Iran received limited,
targeted, and reversible relief from some nuclear-related sanctions.
Importantly, the JPOA left in place the full architecture of our financial, banking, oil, and trade
sanctions; our sanctions focused on Irans support for terrorism and its violation of human rights;
and our own domestic embargo.
Id like briefly to review the breadth of that sanctions architecture painstakingly designed by
the Administration, Congress, and our international partners over many years because it
provides an important backdrop to any discussion of imposing additional sanctions.
First, Iran remains subject to sweeping sanctions by the United States and our allies on its
financial and banking sectors:
Iran continues to be almost completely isolated from the international financial system,
with its most significant private and state-owned banks, including its central bank, subject
to U.S. sanctions and cut off from international payment messaging systems.
Any foreign bank that transacts with designated Iranian banks or with most other
designated Iranian individuals or entities can lose access to the U.S. financial system.
That means losing the ability to facilitate transactions in the dollar, a death penalty for
any international bank.
2
It remains sanctionable to provide physical U.S. dollar banknotes to the Iranian

government.
Second, our sanctions have targeted Irans key economic engine, its energy sector:
Our sanctions have drastically driven down Irans oil exports. In 2012, Iran was
exporting approximately 2.5 million barrels of oil a day to some 20 countries; today, it
exports only around 1.1 million barrels, and only to six countries. Under the JPOA,
moreover, Irans six remaining oil customers may not exceed their current purchase
levels.
Additionally, payment for oil purchased from Iran by these six countries must be paid
into accounts that can be used only to facilitate humanitarian transactions or bilateral
trade between the importing country and Iran. With the exception of funds released
under the JPOA, this Iranian oil revenue can neither be brought back to Iran nor
transferred to third countries. And because the accounts into which Iran receives oil
revenue already hold more funds than Iran spends on bilateral or humanitarian trade, the
effective value of those oil sales to Iran is far less than 100 cents on the dollar.
We also have broad authorities targeting the provision of goods and services to the
Iranian energy sector or investment in that sector. Any entity that is itself part of Irans
energy sector is subject to sanctions.
Because Iran cannot access Western technology and services, and because it has been
forced to sharply cut its oil exports, we have also seen a significant decline in its
production of oil. Independent experts report that Iran produced fewer than 2.8 million
barrels a day in December, down from almost 3.6 million barrels a day in 2011.
Third, there are sanctions on other important sectors of the Iranian economy. We have broad
tools that target Irans petrochemical, insurance, ports, shipping, and shipbuilding sectors, as
well as its trade in certain crucial metals and industrial materials.
Fourth, beyond these sector-focused sanctions, we have a range of other sanctions authorities
that we use to intensify the pressure on the Iranian regime.
It is sanctionable to act on behalf of the Government of Iran, as well as to provide the

Government of Iran or the Iranian individuals and entities on OFACs sanctions list with
financial, material, or technological support.
Under our counter-terrorism, counter-proliferation, human rights, and other Iran-related
authorities, we have imposed sanctions on more than 700 Iran-related individuals and
entities, almost 15 percent of which have been designated since the signing of the JPOA.
And importantly, anyone who conducts business with these individuals or entities, or any
other designated Iranian entity, is at risk of being targeted for sanctions.
Last but not least, broad limitations on U.S. trade with Iran remain in place, meaning that Iran
continues to be shut out of the worlds largest and most vibrant economy and remains unable to
access the U.S. financial system.
These sanctions are not just words on the books we vigorously enforce them. Over the course
of the JPOA, we have repeatedly reaffirmed the point, in word and deed, that Iran is not open for
business.
Since the signing of the JPOA, the United States has sanctioned nearly 100 individuals and
entities that were helping Iran evade our sanctions, aiding Iranian nuclear and missile
proliferation, supporting Iranian-sponsored terrorism, or carrying out Iran-related human rights
abuses. Nine of those designations came less than a month ago, on December 30, including
sanctions on six individuals and one entity that were working with the Iranian government to
obtain U.S. dollars. We have also imposed more than $350 million in penalties on those who
have violated the sanctions. These targeting and enforcement efforts will continue throughout
the course of the JPOA extension.
We have also engaged extensively with foreign governments and companies to make clear the
limited scope of the JPOAs sanctions relief and our continued vigilance against any breaches of
our sanctions. These outreach efforts, while quieter than enforcement actions, are equally critical
to our efforts to pressure Iran.
And as we sit here, members of my staff are poring over reams of financial intelligence
searching for signs of sanctions evasion, working with banks and businesses to help them better
comply with sanctions, and engaging directly with foreign governments, foreign regulators,
foreign businesses, and individuals around the world to make certain that they understand the
consequences of violating our sanctions. And although I will depart the Treasury Department in
a few weeks, everyone should rest assured that vigorous enforcement of our sanctions will
continue unabated.
Through all of these efforts, we make it abundantly clear to Iran that its only hope for real relief
from sanctions is to enter into a comprehensive arrangement that guarantees that it cannot
produce a nuclear weapon.
The State of the Iranian Economy
In light of the extensive sanctions that remain firmly in place and are being vigorously enforced,
it should come as no surprise that the Iranian economy remains in a deep hole.
When I last appeared before this Committee in July, I suggested three metrics by which to judge
Irans economic distress its oil revenues, the value of its currency, and its foreign reserves. By
all three measures, Iran continues to be worse off today than it was when it entered into the
JPOA.
4
Revenues: The overall health of the Iranian economy and the Iranian governments balance
sheet depend heavily on oil revenues, and our sanctions have cut deeply into those revenues. As
I noted earlier, our sanctions have caused Irans oil exports to drop almost 60 percent, from
approximately 2.5 million barrels per day in 2012 to approximately 1.1 million today. Because
of this dramatic decline in sales, in 2014 alone our oil sanctions deprived Iran of over $40
billion, which is well over twice the total estimated value to Iran of the limited sanctions relief in
the JPOA and that is money Iran can never recover, because it represents sales that were not
made. Altogether, since 2012, our oil sanctions have denied Iran access to more than $200
billion in lost exports and funds it cannot freely use.
Furthermore, for the seven month period of the JPOA extension, from December 2014 to June
2015, we estimate that Iran will be forced to endure another $15 billion in lost sales. Moreover,
of the estimated $12 billion that Iran may continue to earn in oil revenue during this JPOA
extension, our sanctions mean that Iran will only be able to access a limited amount of this
revenue, since much of it will remain restricted in overseas accounts.
Meanwhile, the current sustained decline in oil prices is, in the words of Iranian officials,
imposing an additional set of sanctions on Iran. Over the past year, the average price of a barrel
of oil has dropped by more than 50 percent; it is trading today at slightly under $50 per barrel. If
oil prices remain at current levels, Iran will lose an additional $11 billion in oil revenue from
what it was expecting to take in during this most recent seven-month extension of the JPOA.
All of this is creating havoc with Irans budget. For its current fiscal year (March 2014 to March
2015), Iran assumed that oil would sell for $100 per barrel. It has not, which has cut into its
revenues for this year. And next year will be even bleaker.
In December, President Rouhani proposed a budget for the coming fiscal year that assumed oil
would sell for $72 per barrel and that included proposals to cancel subsidies, raise taxes, reduce
contributions to its sovereign wealth fund, and scrap projects. But that draft budget already has
proved overly optimistic, and just last week, the Iranian Finance and Economy Minister revealed
that Iran is revising downward its budget because it is now assuming a price of $40 per barrel.
This will likely result in more spending cuts, fewer services, and higher taxes.
Rial: Irans currency, the rial, has depreciated by about 56 percent since January 2012, including
a decline of about 16 percent just since November 2013, when the JPOA was signed. This makes
imported goods more expensive, disrupts plans for investment in Iran, causes the general
inflation rate to rise, and hurts the Iranian economy by causing significant uncertainty about
future prices.
Reserves: The vast majority of Irans approximately $100 billion in foreign currency reserves
remain inaccessible or restricted by sanctions. Iran can use most of this money only to pay for
permissible bilateral trade between the six remaining oil importing countries and Iran, as well as
for humanitarian purposes. Without hard currency reserves, Iran is limited in its ability to
5
intervene in its currency market to stabilize the rial, and it also becomes more difficult to conduct
foreign trade.
If you take a step back and look at Irans broader economy, the picture is no less dismal.
Despite some signs of an uptick in Irans GDP, Irans economy is performing far below its
potential. Irans GDP shrank by roughly 9 percent in the two years ending in March 2014, and
its economy today is 15 to 20 percent smaller than what it would be had it remained on its pre2012 growth trajectory. Moreover, at 17 percent, Irans inflation rate is one of the highest in the
world.
The dire predictions we heard that the limited sanctions relief in the JPOA would lead to a
collapse of the sanctions regime and reduce pressure on Iran clearly have not materialized. The
sanctions structure has held up just fine. We estimate that the total value to Iran of the JPOA
sanctions relief, which comes largely from enabling Iran to access some of its own restricted oil
revenues held overseas, will add up to approximately $14 to $15 billion by June 2015. This
relief pales in comparison to the significant revenues that Iran has forgone as a result of
sanctions, and it cannot make up for Irans systemic economic weaknesses and imbalances.
Put simply, Irans economy is significantly impaired, and it will remain that way as long as our
sanctions are in place and Irans leaders know this. Thanks to cooperation on the international
stage between the United States and its allies, and the joint work of Congress and this
Administration, Iran is negotiating with its back against the wall. So long as we continue to
maintain our current pressure on Iran and we are committed to doing just that its leaders have
every incentive to come to a comprehensive solution and resolve this issue peacefully.
Additional Sanctions Legislation Now Is Unnecessary and Potentially Harmful
Because of the scope and intensity of the sanctions Iran currently is subject to, and because of the
economic pressure those sanctions continue to apply, we believe that new sanctions are not
needed at this time. To the contrary, new sanctions at this time even with a delayed trigger
are more likely to undermine, rather than enhance, the chances of achieving a comprehensive
solution, and are more likely to reduce, rather than increase, the chances of sustaining and
increasing pressure on Iran if the negotiations fail.
In our efforts to prevent Iran from obtaining a nuclear weapon, sanctions were never an end in
themselves. Sanctions alone were never going to stop Iran from installing centrifuges or
enriching uranium. Instead, sanctions always were intended principally as a means to persuade
Iran to negotiate in earnest.
And that has worked. We now have a situation in which Iran is engaged in a serious negotiation
with the P5+1, while progress on its nuclear program is frozen, certain aspects of the program
have been rolled back, and we have unprecedented insight into its nuclear activities. And,
furthermore, its economy remains under enormous pressure, in large measure because we have
6
been able to hold together the international coalition that has joined us in imposing crippling
sanctions.
Enacting additional sanctions legislation at this point threatens to unravel this situation. In our
judgment a judgment that is shared by our international partners new sanctions legislation
now is substantially more likely to impede progress at the negotiating table than to induce Iran to
offer additional concessions.
Moreover, if Congress enacts new sanctions now and the negotiations ultimately prove
unsuccessful, our international partners may hold us, not Iran, responsible for the breakdown in
the talks. While it is difficult to predict exactly what would then unfold, it is quite possible that
some current members of the international sanctions coalition whose companies are eager to
resume business with Iran, but have been held off would reevaluate their cooperation with us
on pressuring Iran, making it more difficult to maintain existing pressure. If overall support for
the sanctions regime declined, it also would make it more difficult to intensify sanctions
pressure. Finally, if a breakdown in talks led to the demise of the JPOA, we would lose the
additional insight into Irans nuclear program and restrictions on development that the JPOA has
given us.
In our view, these risks make new sanctions legislation inadvisable at this moment. But even
putting aside the risks, we see no compelling reason to impose new sanctions now, considering
the extent to which Iran already faces substantial financial and economic pressure.
This conclusion is reinforced, moreover, by the fact that this Congress and this Administration
would move quickly to enact new sanctions if Iran were to walk away from the talks or if we
concluded that a comprehensive deal was no longer within reach. As the President said just last
Friday, if Iran ends up ultimately not being able to say yes, if they cannot provide us the kind of
assurances that would lead [us] to conclude that they are not obtaining a nuclear weapon, then
were going to have to explore other options, including new sanctions legislation. As has been
the case with prior sanctions legislation, that legislation could go into effect in a matter of days.
The Iranians know this, just as they know that the President has consistently said [that] we leave
all options on the table.
Make no mistake: This administration understands and embraces the power of sanctions.
Sanctions are a key component of many of our most important national security initiatives, from
our efforts to prevent Iran from obtaining a nuclear weapon to our efforts to degrade and
ultimately destroy the Islamic State in Iraq and Levant. We are not sanctions doubters.
But neither do we believe that layering on additional sanctions is always the right move.
Sanctions are one tool in our toolkit, as is diplomacy, as is military action, as are the myriad
other ways that we project U.S. power to advance our interests, protect our allies, and defend
ourselves. If diplomacy does not succeed, as the President said, he will be the first one to come
to Congress and say we need to tighten the screws. But in our view, now is the time to give
diplomacy every chance to succeed, not to create a new sanctions tool.
Conclusion
In closing, I want to assure this Committee that as we seek a comprehensive solution with Iran,
the Treasury Department, like the rest of this Administration, is fully committed to maintaining
intense financial and economic pressure on Iran. We have not, and we will not, let up one iota in
our sanctions enforcement efforts, and we will continue to take action against anyone, anywhere,
who violates or attempts to violate our sanctions.
Thank you.
EXHIBIT 18
Press Release
Last Monday 9 of March 2015, the Andorran Government informed the INAF that in
the same date, the Administrative Authority of the USA, the Financial Crimes
Enforcement Network (hereinafter, FinCEN) communicated to them that on 10 March
afternoon, they would publish a declaration in which Banca Privada dAndorra
(hereinafter, BPA) would be declared to be a financial institution of primary money
laundering concern pursuant to Section 311 of the USA PATRIOT Act. As a result of that
declaration, a period of 60 days begins, after which FinCEN will adopt the
corresponding measures.
In the exercise of its competences conferred by article 8 of the Law regulating the
disciplinary regime of the Financial System, of 27 November 1997 (hereinafter, LRRD)
modified by the Law 10/2013, of 23 May, of the Institut Nacional Andorr de Finances
(INAF) (hereinafter, Law 10/2013), yesterday the CEO of the INAF initiated a
sanctioning procedure against BPA that will be instructed in tight cooperation with the
Unitat dIntelligncia Financera dAndorra (UIFAND). Within the frame of this
procedure, as a precautionary measure and according to article 12 of the LRRD, the
Board of Directors of the INAF approved a preventive intervention of the bank and
appointed two comptrollers, employees of the INAF, which will jointly exercise the
intervention functions.
Attention must be drawn to the fact that the INAFs action is not motivated by a
situation of lack of liquidity nor solvency of BPA or its Group but with the objective to
clarify the facts that have motivated the action of the FinCEN.
Finally, the INAF, as the Financial System Authority will punctually and duly inform
about the measures that may be adopted.
Andorra la Vella, 11 March 2015
EXHIBIT 19
Official Press Release
Agency for the Restructuring of Financial Entities (AREB)
AREB assumes the tutelage of BPA

Andorra la Vella, 27th April 2015.- The Agency for the Restructuring of Financial Entities (AREB,
by its acronym in Catalan) assumes from today, April 27, 2015, the tutelage of Banca Privada
d'Andorra, SA (BPA), under the provisions of the 8/2015 Act of the Restructuring of Financial
Entities.
The President of the Board of Directors of the AREB, Mr. Albert Besol Hinojosa, signed today a
decree published in the Official Board of the Principality of Andorra (BOPA) that formalizes the
decision taken this morning by the Board of Directors of the AREB of assuming the tutelage of
BPA, the financial entity intervened by the Andorran National Finance Institute (INAF) on
March 11, 2015. This decision, a procedure provided by the 8/2015 Act of the Restructuring of
Financial Entities, article 11, establishes the start of the resolution process of the organization,
that includes solutions such as the transfer of assets, liabilities or any rights or obligations to a
bridge bank; total or partial sale of the business to other banks, or other instruments under
the 8/2015 Law, always with the aim of preserving the value of the institution.
The AREB considered the information and documents provided by the INAF, which are the
result of the work undertaken by the supervisory authority of the financial system during the
last weeks. The Agency maintains the precautionary measures taken to date by the provisional
administrator of BPA, appointed by the INAF on March, 11.
In the referred decree, the AREB also made public the appointment of a new administrator for
BPA, the Andorran economist David Betbes. Mr. Betbes, graduated in Economics and Social
Sciences by the Universit de Sciences Sociales de Toulouse, has an MBA by ESADE and a
Certificate of European Financial Analyst (CEFA) by Instituto de Estudios Financieros.
David Betbes has been during the last years Director of International Private Banking at Credit
Andorra Financial Group, and member of the Executive Committee of the bank, position that
left in May 2014 to start a personal project related to financial consulting.
In the coming days, the AREB will continue analyzing all the available information in order to
define the plan in the following weeks to find a solution about BPA. Finally, in this context, and
as established by 8/2015 Act, the Agency will proceed to the creation of the Andorran Fund
for the Resolution of Financial Entities (FAREB), intended to finance the measures agreed to for
BPA.
EXHIBIT 20
The Board of the AREB creates the new bank named

Vall Banc
The new financial institution was set up on July 17, 2015
The Board of the Agency for the Resolution of Financial Entities (AREB, by its acronym
in Catalan) created last Friday, July 17, the new bank to which lawful assets and
liabilities of BPA will be transferred, as set out in Article 17 of the Law 8/2015, of April
2nd on urgent measures to implement mechanisms of restructuring and resolution of
financial institutions, under the name Vall Banc, SAU (Vall Banc).
This is a new step to implement the Resolution Plan of BPA, approved by the AREB last
June 11, and whose main substance lies on the segregation of all assets and liabilities
of BPA considered legitimate after a strict review process to each client carried out by
independent experts on the prevention of money laundering and terrorist financing
and monitored by Andorran authorities. This review has also been applied to the
wealth management business of BPA. For this purpose, the AREB are currently working
hard in these review procedures so that it can proceed as soon as possible to such
transfer that make up the heritage of the new and limpid entity, accordance with the
provisions of Law 8/2015.
The creation of the new bank is essential to initiate the necessary procedures to
enable the opening of accounts with correspondents and custodians as newly created
entity, and to initiate the necessary procedures so that it has the technical and human
resources required for further transfer of customer assets and liabilities.
The Board of the AREB also approved the evaluation of BPA, following the assessment
criteria adopted at the May 22 board, all in accordance and mandate of Law 8/2015.
This step was necessary to create the new bank in order to proceed with the sale
before the end of the year.
This assessment was made by reference to the figures of May 31, 2015 and as
provided by law is carried out in two cases: the entity in resolution and the company in
liquidation; these valuations of assets and liabilities of BPA have been carried out
based on reports prepared by independent experts: PwC, Key Capital Partners and
Jones Lang LaSalle.
On resolution scenario, negative valuation adjustments are estimated at 313m,

leading, once consumed BPA equity, a patrimonial imbalance of 103M, this is a
negative economic value of 103M. The main negative adjustment comes from the
valuation of the investees by BPA, especially, the resulting from the situation led by
Banco de Madrid, in bankruptcy-liquidation, estimated can generate a loss of 181M
(58% of total losses), while other relevant adjustments come from the credit portfolio
evaluation on a resolution scenario and certain intangible assets.
Moreover, the valuation criteria of BPA in liquidation scenario have followed the
standard methodology of discounts depending on the assessment of the liquidity of
the different types of assets in case of accelerated sale. The result of this valuation
assumes negative adjustments amounting to 584m generating a 374m patrimonial
imbalance, this is, a negative net asset value of 374m.
The comparison of both assessments reaffirms the decision of the AREB on April 27 to
avoid the path of the judicial liquidation of BPA and open the process of administrative
resolution of such entity.
With the approval of these assessments, the AREB maintains expectations of not
having to apply any haircut on customer deposits of BPA.
The ultimate goal of the Andorran authorities is to normalize the status of eligible
customers within a framework of patrimonial stability that allows properly and
efficiently execute the Resolution Plan of BPA.
The board of the new bank has been appointed by the AREB, Vall Banc shareholder,
and is composed of the following members.
Csar Goyache, current member of the Board of the AREB, advised the Spanish
government in the design of SAREB, the so-called bad bank, and has developed his
career in investment banking both BBVA and Crdit Agricole. Later he continued
serving in restructuring operations with the signing of US consultancy Alvarez&Marsal,
a position from which advised the FROB, while in the last year was chairman of the
board of Asentia, former subsidiary of Inmobiliaria Colonial, in representation of his
company, Mainspring.
David Betbes is currently BPAP joint administrator. Betbes was for years head of
International Private Banking Crdit Andorr Financial Group and member of its
executive committee, positions he left in 2014 to start a personal project dedicated to
financial advice. He holds a degree in Economics and Social Sciences from the
University of Toulouse, an MBA from ESADE and European Certified Financial Analyst
(CEFA).
Llus Marimon is a founding partner and president of the Board of Marimon Abogados.
Law degree from the University of Barcelona, specializing in commercial and corporate
law, was counsel for the Commercial Bank Transatlantic and Director and Secretary of
the Board of Directors of Banco Madrid until sold.
Christian Merle is president and managing partner of Merle & Partners, specialized in
advising banking company private institutions, fund managers, commercial banks and
private equity funds, which provides strategic and financial advisory. His years of
experience with central banks and banking supervisory authorities in France and the
US have given him a good knowledge of the banking and financial sector in Europe.
Fernando Vazquez de Lapuerta is, since last July 8, BPA joint administrator with David
Betbes. It has a long history in wholesale banking business and risk management and
equipment. Degree in Law and in Management from ICADE with postgraduate training
at IESE, the new administrator of BPA has been NCG Banco CEO until March 2014 and
Corporate Director in several areas in BBVA between 1997 and 2010. Vazquez de
Lapuerta has also recently served as director of two Spanish listed companies, CLH
(2012-2014) and Sacyr (2012-2013).
EXHIBIT 21
The AREB will create a good bank with legitimate assets and
liabilities segregated from BPA
The agency wants to sell the new bank before the year ends
The Board of the Agency for the Resolution of Financial Entities (AREB, by its
acronym in Catalan), building on the objectives and principles of the articles 3 and 4 of
the Law 8/2015 of April 2nd of urgent measures to implement mechanisms of
restructuring and resolution of financial institutions, adopted the Resolution Plan for
Banca Privada dAndorra, SA (BPA) at the meeting held on June 11th, 2015. This
document follows the international standards for elaboration of resolution plans and
therefore consists of a public part and a confidential part.
The substance of this Resolution Plan lies on the segregation of all assets and liabilities
of BPA considered legitimate after a strict review process to each client carried out by
independent experts on the prevention of money laundering and terrorist financing
and monitored by Andorran authorities. This review has also been applied to the
wealth management business of BPA.
In this sense, it is necessary to inform that BPA is not the financial institution that will
retain the assets and liabilities considered suitable.
These assets and liabilities will be transferred to a suitable bridge institution, a new
bank, under the assessment referred to in Article 5 of Law 8/2015. This bank, isolated
and immunized from any deficiencies identified in the previous administration of BPA
as indicated by FinCEN on its note of finding published on March 10, 2015 , will not
inherit any of the risks associated with such deficiencies.
The Plan established by the AREB determines that customers assets and liabilities will
be transferred once the review process of each client reaches adequate level of
completion. Therefore, to all intents and purposes, the new banking entity will be a socalled good bank. This process will be accompanied by the implementation in the
good bank of a prevention of money laundering and terrorist financing policy in line
with the standards that are being applied to review current BPA customers.
This bank will be constituted by AREB and have a new banking license. In this sense,
AREB will begin the process of constitution of the new entity immediately.
The Resolution Plan provides that this entity, the good bank, remains capitalized by
using the instruments provided by Law 8/2015.
The new bank will be brought under the responsibility of AREB, being its operations
managed and controlled by this authority. The supervision of any Andorran banking
entity would remain INAFs responsibility. The main objectives of AREB are, in this
sense, working to protect the interests of clients of BPA and ensuring the stability and
value of the institution.
Completing this strict process will allow the new entity to establish all procedures
(including the transfer of BPAs staff in accordance with the provisions of Law 8/2015)
necessary to operate with counterparties and under standard industry conditions.
The ultimate goal of the Andorran authorities is to normalize the status of suitable and
legitimate clients within a framework of financial stability that should allow AREB to
properly and efficiently execute the BPA resolution plan.
AREB works with the aim of completing the implementation of the Resolution Plan
and proceed with the sale of the good bank before the end of the year.
The sale process of the new bank will be conducted through an auction to ensure the
best competition and competitiveness, in order to maximize the value of the entity.
Finally, BPAs Resolution Plan has been submitted to both the Minister of Finance and
the INAF. Besides, this morning the President of the AREB requested his presence
before the Andorran Parliament (Consell General) to present BPAs resolution plan as
established by Law 8/2015.
EXHIBIT 22
!
!
!
PRESS%RELEASE%
!
AREB!wishes!to!announce!that!the!sale!process!of!VALL!BANC,!S.A.U.!has!started!
today,!October!29th!2015.!
This! sale! process! will! be! carried! along! with! the! remaining! resolution! measures!
pursuant!the!Banca!Privada!dAndorra,!S.A!(BPA)!Resolution!Plan.!
Pursuant!to!the!terms!laid!down!in!Llei%8/2015,%de%2%dabril,%de%Mesures%Urgents%per%
Implantar% Mecanismes% de% Reestructuraci% i% % Resoluci% Dentitats% Bancries% ,! the!
purpose!of!the!Process!is!to!select!the!offer!providing!the!most!efficient!use!of!public!
resources,!subject!to!certain!conditions!and!criteria,!via!a!competitive,!transparent,!
objective! and! nonOdiscriminatory! process.! The! Sale! Process! may,! in! principle,!
comprise!three!phases:!!
1.! Indications!of!Interest!
With!the!support!of!Key!Capital!Partners,!AREB!is!to!gather!any!indication!of!interest!
by!writing!which!are!welcome.!
The! Indications! of! Interest! will! be! analysed! by! taking! into! account! some! defined!
criteria,!in!order!to!subsequently!propose!which!Potential!Purchasers!will!be!invited!
to! participate! in! the! second! phase! of! the! Process.! The! deadline! to! present! the!
Indications!of!Interest!will!be!November!9th!2015.!
2.! Binding!Offers!
Once!chosen!for!the!second!phase!of!the!Sale!Process,!the!Selected!Purchasers!will!
have!a!certain!period!of!time!to!carry!out!a!due!diligence!process!to!Vall!Banc,!S.A.U!
prior!to!the!submission!of!their!binding!offers.!
3.! Final!Phase!
In!the!final!phase,!AREB,!supported!by!key!Capital!Partners,!will!assess!the!binding!
offers!and!decide!who!will!be!the!purchaser.!The!purchasers!selection!will!be!made!
pursuant!to!certain!criteria,!the!weighting!of!which!will!be!fixed!and!communicated!to!
the!selected!purchasers!invited!to!participate!in!the!second!phase.!The!purchasers!
selection!will!be!subject!to!acceptance!of!the!sale!and!purchase!agreement.!
After! the! winning! bid! is! decided,! the! INAF! will! state! the! suitability! of! the! selected!
purchaser.!
Key!Capital!Partners!will!act!as!the!contact!point!for!the!Potential!Purchasers!during!
the! entire! Process.! Thus,! any! communications! related! to! the! Sale! Process! will! be!
exclusively!addressed!to!Key!Capital!Partners!due!to!said!party's!consideration!as!
the!sole!contact!for!the!purposes!of!this!Transaction.!
!
!
Key! Capital! Partners'! contact! information! for! notification! purposes! will! be! the!
following:!
!
Stphane!Vojetta!
Calle!Salustiano!Olzaga,!5!!3a!planta!!28001!Madrid!!
+34!607!788!376!
stephane.vojetta@keycapital.es!!
!
!
EXHIBIT 23
Banco Madrid presenta concurso de acreedores

Madrid, Lunes 16 de marzo de 2015. Los nuevos administradores de Banco
Madrid, designados por el Banco de Espaa, han decidido solicitar el concurso voluntario
de acreedores de la entidad financiera en la maana de hoy. Esta situacin viene
motivada por el fuerte deterioro sufrido en la situacin econmica-financiera de Banco
Madrid, S.A.U., durante los ltimos das, tras conocerse la decisin adoptada por la
Financial Crisis Enforcement Network (FinCEN) del Departamento del Tesoro de Estados
Unidos, de considerar a su matriz, Banca Privada d'Andorra (BPA), como una institucin
financiera extranjera sometida a preocupacin de primer orden en materia de blanqueo
de capitales (primary money laundering concern), de acuerdo con la Seccin 311 de la
USA Patriot Act. A esta decisin, se han unido otras informaciones aparecidas en medios
de comunicacin durante el pasado fin de semana, que ya son de dominio pblico.
Las importantes retiradas de fondos de clientes derivadas de las circunstancias

anteriores, que ha tenido que atender la entidad en los ltimos das, han afectado a su
capacidad para hacer frente al cumplimiento puntual de sus obligaciones.
En esta situacin, los nuevos administradores han decidido que "la nica forma de
asegurar un trato igual de los depositantes, y dems acreedores de Banco de Madrid,
S.A.U., pasa por solicitar el concurso de acreedores de la entidad y suspender su
operativa ordinaria, mientras se pronuncie el Juez que tenga que conocer el
procedimiento".
BANCO MADRID ANNOUNCES FILING FOR BANKRUPTCY

Madrid, Monday March 16th, 2015. The new administrators of Banco
Madrid, designated by the Central Bank of Spain, have decided to voluntarily
file this morning for bankruptcy. The situation has been motivated by the
quick degradation of Banco Madrids economic-financial situation during the
last few days, after FinCEN (the Financial Crisis Enforcement Network), a unit
of the U.S. Department of the Treasure, published a Notice considering BPA
headquarters a foreign financial institution of primary money laundering
concern, applying the article 311 of the US Patriot Act. In addition, last
weekend the media has published several related news about it being now
of public domain.
The above mentioned circumstances have prompted major withdrawing of
funds from clients in the last few days, effectively jeopardizing the banks
capability to fulfill its obligations with the depositors.
To face such situation, the new administrators have decided that the only
option to secure a nondiscriminatory treatment to all depositors and
creditors of Banco Madrid SAU is the filing for bankruptcy and the
interruption of its regular operation until the judge in charge of the case
makes public his decision about it.
EXHIBIT 24
LA SUPERINTENDENCIA DE BANCOS
COMUNICA:
Mediante Resolucin SBP-0053-2015 de 10 de marzo de 2015, la Superintendencia de
Bancos de Panam orden la Toma de Control Administrativo y Operativo de BANCA
PRIVADA DANDORRA (PANAM) S.A., efectiva a partir de las dos (2) pasado
meridiano, del da mircoles once (11) de marzo de 2015, con fundamento en lo
dispuesto en Artculo 16 numeral 4, Literal I; Artculo 131 y subsiguientes del Decreto
Ley No. 9 de 1998, modificado por el Decreto Ley No. 2 de 2008 y cuyo Texto nico
se adopt por medio del Decreto Ejecutivo No. 52 de 2008 (Ley Bancaria).
Esta decisin fue adoptada por la Superintendencia de Bancos ante la potencial
imposibilidad de BANCA PRIVADA DANDORRA (PANAM) S.A. a tener acceso
real a la mayora de los activos para hacer frente a sus depositantes, lo que pudiera
afectar las operaciones del Banco en esta jurisdiccin. La mayor parte de los activos
lquidos estn colocados en el Banco del Grupo en Andorra.
A juicio de la Superintendencia, los intereses de los depositantes corren peligro y se
hace necesario proceder con la Toma de Control Administrativo y Operativo inmediato
de BANCA PRIVADA DANDORRA (PANAM) S.A., como resultado de las acciones
tomadas por la Unidad de Inteligencia Financiera del Departamento del Tesoro de los
Estados Unidos (FINCEN), tras sealar que el Grupo Bancario BANCA PRIVADA
DANDORRA es considerado como una institucin financiera de preocupacin en
materia de blanqueo de capitales. Los sealamientos vinculan a la sede central en la
capital andorrana, facilitando transacciones con personas vinculadas con fondos
relacionados a actividades ilcitas incluyendo, transacciones para organizaciones en
Rusia, China y otras transacciones relacionadas con desviacin de millones de dlares
de la empresa petrolera de Venezuela a cambio de comisiones. Ante estos hechos, el
riesgo de reputacin del Grupo Bancario se incrementa de forma material.
Es de anotar que no se ha hecho sealamiento, ni se tienen evidencias de que la
subsidiaria BANCA PRIVADA DANDORRA (PANAM) S.A. est comprometida en
estos actos ilcitos.
Por lo que con el propsito de promover la confianza pblica en el Sistema Bancario,
esta Superintendencia toma la decisin de tomar control administrativo y operativo de
la subsidiaria BANCA PRIVADA DANDORRA (PANAM) S.A , y reitera la decisin
adoptada, no afecta al resto de los Bancos establecidos en nuestro Centro Bancario.
Panam, 11 de marzo de 2015
SUPERINTENDENCIA DE BANCOS DE PANAM

(Panamanian Regulator)
THE PANAMANIAN REGULATOR

STATES:
By the resolution SBP-0053-2015 of March 10th, 2015, the Superintendent of the
Panamanian banks ordered the administrative and operations takeover of BANCA
PRIVADA DANDORRA (PANAMA), S.A., effective since two (2) P.M. of
Wednesday, March 11th, 2015, based on Article 16, number 4, Literal I; Article 131
and subsequent of the Law Decree number 9 of 1998, modified by the Law Decree
number 2 of 2008 and which unified text was approved in the Executive Decree
number 52 of 2008 (Banking Law).
This decision was implemented by the banking Superintendent to face a potential
incapability of BANCA PRIVADA DANDORRA (PANAMA), S.A. to have real
access to the vast majority of assets to respond to its depositors, consequently
affecting the banks operations in this jurisdiction. Most of the banks assets are
deposited at the groups main bank in Andorra.
The Superintendent senses that the interests of the bank depositors are at risk at
this time making it necessary to take over the administration and operations of
BANCA PRIVADA DANDORRA (PANAMA), S.A., as a result of the Notice issued
by the Financial Crimes Enforcement Network (FinCEN) of the Department of the
Treasure of the United States, that pointed at the BANCA PRIVADA DANDORRA
group as subject of primary money laundering concern. The Notice points to the
headquarters, in the Andorran capital, channeling transactions with individuals
related to funds proceeding from illegal activities including transactions for
organizations in Russia, China and other transactions related with the misplacing
of millions of US Dollars from the Venezuelan oil company in exchange for
commissions. With such facts, the reputational risk of the banking group effectively
increases notably.
It ought to be noted that there is no evidence that the subsidiary BANCA PRIVADA
DANDORRA (PANAMA), S.A., may had been involved in such activities.
With the purpose of enhancing the public trust in the banking system, the
Superintendent makes the decision to take over the administration and operations
of the subsidiary BANCA PRIVADA DANDORRA (PANAMA), S.A., reiterating that
such decision does not involve any other bank in our Banking Centre.
Panama, March 11th, 2015
EXHIBIT 25
LA SUPERINTENDENCIA DE BANCOS
COMUNICA:
Mediante Resolucin SBP-0161-2015 de 23 de octubre de 2015, se ordena se prorrogue el

perodo de la Reorganizacin de BANCA PRIVADA DANDORRA (PANAM), S.A., por un
perodo adicional de noventa (90) das, que podr ser anticipado o prorrogado por el
Superintendente.
La decisin fue tomada, en base al Informe de Reorganizacin de fecha 22 de octubre de

2015, en el cual se sugiere conceder una ltima prrroga hasta por 90 das, a fin de
permitir a las Autoridades Andorranas culminar la reestructuracin del Banco en Andorra y
en el caso que ello resulte positivo, recomendar pasar a Reorganizar el Banco con objetivo
de venta, lo cual incluira al Banco en Panam.
La Resolucin dispone adems, que se mantiene en todo lo que aplique, el contenido de la

Resolucin SBP-0077-2015 de 8 de mayo de 2015 y la Resolucin SBP-0130-2015 de 7 de
agosto de 2015, que prorrog el periodo de Reorganizacin.
La presente Resolucin comenzar a regir a partir del da viernes seis (6) de noviembre del
2015.
Panam, 27 de octubre de 2015
SUPERINTENDENCIA DE BANCOS DE PANAM

(Panamanian Regulator)
THE PANAMANIAN REGULATOR

STATES:
By the resolution SBP-0161-2015 of October 23rd, 2015, we order the extension,
for an additional period of ninety (90) days, of the BANCA PRIVADA DANDORRA
(PANAMA), S.A. Reorganization. Such period could be shortened or extended by
the Superintendent.
The decision was made based on the Reorganization Report dated October 22,
2015, which suggests to grant the Andorran authorities a last extension of up to 90
days in order to allow them to conclude the restructuring of the bank in Andorra
and, should it reach a positive completion, recommend the reorganization of the
bank for its sale, including the bank in Panama.
In addition, the resolution states that the content of the decrees SBP-0077-2015 of
May 8th 2015 and SBP-0130-2015 of August 7th, 2015 that extended the
reorganization period remain in order.
This resolution will become effective from November 6th 2015.
Panama, October 27th, 2015


Situated,
Plaintiffs,
v.
Defendants.
[PROPOSED] ORDER GRANTING MOTION FOR PARTIAL SUMMARY

JUDGMENT AND REQUEST FOR EXPEDITED CONSIDERATION
Upon consideration of Plaintiffs Motion for Partial Summary Judgment and Request for
Expedited Consideration, as well as Plaintiffs Statement of Undisputed Material Facts and all
other papers submitted in support of and in opposition to the motion and for good cause shown, it
is hereby
ORDERED that the Motion is GRANTED; and it is further
ORDERED that the Notice of Finding (NOF) described in the Federal Register as
Notice of Finding that Banca Privada dAndorra is a Financial Institution of Money Laundering
Concern, 80 Fed. Reg. 13464 (Mar. 13, 2015), and the Notice of Proposed Rule Making
(NPRM) described in the Federal Register as Special Measure against Banca Privada
dAndorra as a Financial Institution of Primary Money Laundering Concern, 80 Fed. Reg.
13304 (Mar. 13, 2015), are hereby vacated; and it is further
ORDERED that defendant Financial Crimes Enforcement Network (FinCEN) shall

forthwith provide notice of the foregoing to all U.S. financial institutions through publication in
the Federal Register; and it is further
ORDERED that FinCEN shall forthwith provide notice to all U.S. banks previously
holding correspondent accounts for Banca Privada dAndorra S.A.s (BPA), advising them that
the NOF and NPRM aganst BPA have been vacated and that these banks are free to resume
correspondent banking relationships with BPA without regulatory consequence; and it is further
ORDERED that FinCEN shall forthwith
provide notice to BPAs regulator and
administrator in Andorra that the NOF and NPRM against BPA have been vacated and that
FinCEN withdraws its prior encouragement to take action against, expropriate, or liquidate BPA
based on the now vacated NOF and NPRN; and it is further
ORDERED that FinCEN shall promptly report to the Court, with copy to Plaintiffs, the
results of its compliance with the foregoing.
Date:
U.S. DISTRICT JUDGE

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Case 1:15-cv-01641-JEB Document 15 Filed 11/12/15 Page 1 of 3

UNITED STATES DISTRICT COURT

RAMON CIERCO, HIGINI CIERCO,

Civil No. 15-cv-1641(JEB)