The Cierco family, former majority-owners of Banca Privada d’Andorra, announced on July 23 that they plan to sue Andorra for the “indiscriminate and unilateral expropriation” of the bank, according to a report from The New York Times.
The family’s statement did not reveal how much they seek in compensation, but they owned 75% of the bank’s equity.
The lawsuit is a result of the Andorra government seizing the bank in March, after suspicions of money-laundering were raised by the U.S. Treasury Department. No detailed accusations have been made yet; however, the Treasury stated that they believed hundreds of millions of dollars were being laundered through the bank by corrupt Venezuelan officials, Russian and Chinese gangs, and the Mexican Sinaloa cartel.
After taking control of the bank, Andorra’s government regulators imposed capital controls (including a 2,500-euro weekly withdrawal limit), dismissed the bank’s board of directors, and arrested Chief Executive Joan Pau Miquel Prats, who remains in detention, awaiting trial on charges that have yet to be released as the investigation continues.
Now, the newly minted board of directors are in the process of determining which accounts are clear of any link to criminal activities. It was announced the day before the Cierco’s lawsuit announcement that the bank’s cleared assets would be sold off to Vall Banc, created by the board of directors, according to Europa Press.
The bank’s total assets are more than 1.79 billion euros, according to the U.S. Treasury Department. If the bank were to have a major run on deposits, a bailout from Andorra would be neither likely nor possible, as the government of Andorra’s budget in 2014 was only 400 million euros.
BPA is one of five privately owned banks in tiny Andorra, a principality of 180 square miles and less than 100,000 people along the Spain-France border.