International banks have become rather too familiar with the inside of US courtrooms recently. They are still digesting the implications of US creditor Lee Koehler's success in June 2009, when a New York appeal court ruled that Bank of Bermuda should hand over to him shares held in Bermuda as collateral on a loan to one of its clients, Mr Koehler's debtor, David Dodwell.
In December 2009, Credit Suisse agreed on a $536m fine as part of a deferred prosecution deal with the US Office for Foreign Assets Control (OFAC) for breaching US sanctions against Iran, Sudan, Burma, Cuba and North Korea. One month later, Saudi Arabia's Al Rajhi Bank filed an appeal against the US Treasury's subpoena under the 2001 Patriot Act. The Treasury has accused one of the bank's clients of smuggling travellers' cheques and demanded that Al Rajhi hand over the relevant bank account details or face the termination of its correspondent banking services at US banks.
