The United States District Court for the District of Puerto Rico dismissed the lawsuit against ItalBank International Inc. filed by International Global Bank NV, claiming the blockage of USD 4,359,746.92 related to Venezuela, which the plaintiff considered an unlawful action.
The blockage by ItalBank International Inc. occurred in compliance with sanctions imposed by the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury on the Venezuelan regime.
International Global Bank NV contends that neither they nor South American International Bank N.V. (SAI Bank), their former name, have ever been part of the individuals and entities sanctioned by the OFAC on the Specially Designated Nationals (SDN) List.
The decision by Judge Silvia Carreño-Coll was made with prejudice concerning all claims, causes of action, and parties. Each party will bear its own costs and attorney’s fees.
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Court Dismissal
Judge considered a motion for a preliminary injunction to suspend the lawsuit as irrelevant.
On January 29, 2025, Judge Silvia Carreño-Coll of the United States District Court for the District of Puerto Rico ordered the dismissal with prejudice concerning all claims, causes of action, and parties in the lawsuit filed by International Global Bank NV against ItalBank International Inc.
The ruling addressed a stipulation for dismissal in docket number 59 and pursuant to Fed. R. Civ. P. 41(a), thereby concluding the proceedings.
Previously, the judge had deemed a motion for a preliminary injunction to amend/correct or suspend the aforementioned lawsuit to be irrelevant, leading to the ordered dismissal.
The judge stipulated in the ruling that each party would bear its own costs and attorney’s fees.
The Lawsuit
On September 19, 2024, attorneys for International Global Bank N.V., incorporated in Curacao and formerly known as South American International Bank N.V. (SAI Bank), filed a lawsuit against ItalBank International Inc. of Puerto Rico in the United States District Court for the District of Puerto Rico.
The plaintiff IGB accused breach of contract by SAI Bank, fraud, breach of trust, negligence, invasion of privacy, and disclosure of confidential information.
IGB seeks reimbursement of the blocked USD 4,359,746.92; not less than USD 2,221,625.73 in damages corresponding to IGB’s actual damages; and an additional indemnity of no less than USD 2,221,625.73 for punitive damages.
Moreover, International Global Bank seeks to prohibit International Bank from initiating or continuing arbitration for the claims raised in the lawsuit, as well as any other relief that the court deems just and appropriate. They demanded a jury trial.
The Facts
On August 10, 2017, SAI Bank and ItalBank entered into an agreement when the latter was the correspondent bank for IGB in the U.S. and a bank account was opened to process transactions in U.S. dollars.
On July 9, 2019, ItalBank blocked USD 4,359,746.92 from SAI Bank’s bank account allegedly in compliance with OFAC regulations related to Venezuela. Due to this blockage, ItalBank made the mentioned amount available to the Treasury Department agency.
The plaintiff Global Bank N.V. claims that this blockage of funds was unlawful, as neither OFAC nor any other U.S. agency requested ItalBank to block them.
The lawsuit asserts that neither IGB nor SAI Bank has ever been included by OFAC in the Specially Designated Nationals (SDN) List or any other sanctions list.
IGB’s True Reasons for the Block
According to the plaintiff, International Global Bank, ItalBank retroactively blocked the funds improperly because the money had already been processed for Consulting and Services Associate, S.A. (CSA), a former client of IGB. This means that the funds were no longer under the custody of SAI Bank.
Consulting and Services Associate, S.A. was a limited liability company incorporated in Switzerland engaged in consultancy and other professional services related to the buying and selling of oil, which had a bank account in SAI Bank/IGB—not in ItalBank—active between 2018 and 2019.
CSA entered into a consultancy agreement with TIPCO, a Thai company involved in manufacturing and distributing asphalt and petroleum products. TIPCO had a contract with PDVSA. The plaintiff contends that CSA entered into consultancy agreements with TIPCO that are not related to PDVSA.
After OFAC designated PDVSA on January 28, 2019, SAI Bank requested that CSA certify its relationship, if any, with the Venezuelan oil company.
CSA submitted an “OFAC Certification” on February 19, 2019, stating that it was not conducting any direct or indirect business with Venezuela. SAI Bank processed seven wire transfers originating from TIPCO for final credit to CSA. In other words, the transfers were made by TIPCO, not by PDVSA, the plaintiff argues.
The plaintiff alleges that the improper blockage of the funds by ItalBank deprived them of their ability to use or control their property.
For more information on this case, visit: Consequences of sanctions on Venezuela: IGB demands OFAC release incorrectly blocked funds by ItalBank based on presumed operations with PDVSA
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