MOSCOW, September 15 (RIA Novosti) - The Bank of New York Mellon is near a deal to settle a $22.5 billion money laundering suit brought by Russia after the bank offered to restart trade-finance lending once the suit is resolved, The Wall Street Journal said on Tuesday citing people close to the talks.
A settlement could come before the next hearing, set for October 20, the paper said, citing a person close to the talks.
But the paper said a deal still needed final approval from the Russian government. Russian officials declined to comment on when a decision might come or what it might be, the paper said.
Russia's Federal Customs Service filed the lawsuit in Moscow in May 2007 after accusing the bank of channeling funds received for exports to Russia in the late 1990s through accounts held at the bank.
The suit sought damages from the bank related to a U.S. Justice Department investigation in which a Bank of New York vice president allegedly helped to transfer $7 billion out of Russia in the late 1990s.
A Bank of New York spokesman declined to comment on Monday, as did the customs service, the paper said.
The bank has been in settlement discussions on and off since the spring. The judge in the case encouraged the two sides to settle and has repeatedly delayed hearings to allow talks to continue, the paper said.
The discussions seemed to stall in the late spring and early summer, according to people close to the talks. Progress resumed after a U.S.-Russian summit in July, they said, the paper reported.
The paper reported that Russian Finance Minister Alexei Kudrin said on Monday he was aware of a new offer from the bank, adding he supported compromise efforts by the customs service.
Under discussion is a $400 million trade-finance facility to be available to Russian state banks to help fund imports and exports. It would run for five years, the paper said. The proposed lending would begin after settlement, resuming business the bank suspended during the litigation.
In addition, the lawsuit would be settled with an out-of-court agreement under which the bank would pay court costs, up to about $14 million, the newspaper said citing the people close to the discussions.
Russian business daily Kommersant said in March citing a Russian government source the Russian customs authorities were ready to drop the lawsuit in exchange for an $800 million compensation settlement.
"Although Bank of New York has rejected the lawsuit as meritless, the uncertainty of its outcome has hung over the bank since it was filed. Investors and analysts have sporadically expressed concern about a potential adverse judgment in the case even though the bank had said that any ruling against the company would be unenforceable," the WSJ reported.
