And here is the difficulty - the plaintiff informs the bank that he will receive funds from Raiffeisen Bank; the bank explains that it cannot give prior approval, but apparently the money received from that bank was transferred to the plaintiff's account. At the same time, funds from other banks were transferred to the plaintiff's account, about which he did not inform the bank at all, even though he was aware of the difficulties that existed in light of the fighting situation. Despite this, and even though he did not announce, did not update, and even though he did not even ask anything about those banks, he complained that the bank did not transfer the funds in light of sanctions.
- I will also note that in the plaintiff's letter to the bank (through his representative, Mr. Rotem, dated April 17, 2022), it was inadvertently claimed that: " The transfers were made from various banks that were not under sanctions." In other words, the plaintiff knew that if there were sanctions, he would not be able to receive the funds. However, the plaintiff does not specify what tests he did for the said purpose, and why he claimed that the transfers were made from banks that were not under sanctions. To teach you that the plaintiff was aware of the issue of sanctions, and if he made a mistake in his tests or assessments, he can only blame himself in this regard.
D.7. Additional issues that must be addressed; The plaintiff is entitled to compensation for mental anguish:
US or UK sanctions?
- The first transfer of Svetlana from SBERBANK took place on March 15, 2022, when this bank entered the UK sanctions list on March 1, 2022 (Appendix "4" to the statement of defense). Gregory's transfer was sent to the plaintiff from ALFA BANK on March 25, when this bank entered the UK sanctions list published on March 24, 2022 (Appendix "4" to the statement of defense).
- However, in the first response letter sent by the bank through Ms. Naomi Eldar of the Public Inquiries Unit on April 25, 2022, the bank claimed that the two transfers came from banks abroad that are on the US Department of the Treasury's (OFAC) sanctions list, while the British sanctions were not mentioned at all in that letter. The witness on behalf of the bank, Mr. Avraham Shalom, noted in his testimony (p. 37, paras. 25-26 and p. 38, paras. 20-21), that this was an error when there was no reference to the British sanctions.
- The plaintiff, for his part, pointed out that the list of sanctions on the aforementioned banks was published at the end of February 2022 in the United States, with the clarification that it would take effect in March 2022, after the transfer of the funds.
- In the statement of defense, the bank does not deny that the sanctions in the United States came into effect during March 2022 (i.e., after the transfer of the funds) and it holds the claim that at the time of the transfer of the funds, the banks from which the two transfers were made were already sanctioned by the United Kingdom (a claim that the plaintiff did not dispute). In other words, he does not deny this, because the sanctions in the United States came into effect at a later date.
- The question therefore arises as to whether, in view of the initial representation made by the Bank regarding sanctions by the U.S. Department of the Treasury as the reason for the non-transfer of the funds, renders the Bank's refusal invalid or unreasonable, in a manner that entitles the plaintiff to return the funds.
- In my opinion, the answer to this is no. As of the end of February 2022, the bank began to deal with a new situation, in which various entities around the world began to impose sanctions on various banks in Russia. The funds received from Russia in the two transfers that are the subject of the proceeding, through Correspondent Bank from the United States, were withheld and examined at the bank and examined by the Compliance Department. Even if the bank's public inquiries section first erred when it referred to the sanctions in the U.S. and later corrected that the sanctions were imposed by Britain before the transfer of the funds (and only later in the U.S.), the sanctions are substantively binding as part of the cross-border sanctions policy.
- Alongside the aforesaid, I will mention that it was the plaintiff who originally presented the bank with various representations regarding the source of the transfer of funds, so that his grievance against the bank in this context is in any case difficult.
Without derogating from all of the above, the bank's conduct establishes, in my opinion, a cause for compensation for the plaintiff for mental anguish
- Although at the end of the day it can be determined that the bank acted in accordance with the binding procedures and was lawfully withholding the funds, the bank's conduct was confused, inconsistent and problematic.
- During the month of April 2022, the bank's representatives contacted the plaintiff and demanded various references regarding the source of the funds; Questions were raised about the occupation of the plaintiff's son and more. These are impossible questions. After all, if the reason for the non-transfer of the funds was a policy of sanctions adopted by the bank, then all of those questions were irrelevant.
- The bank's further responses to the fact that "approval of the credit of the funds has not yet been received" in April 2022 were also difficult, since instead of providing a clear answer regarding the existence of sanctions that prevent the transfer of funds to the account, the bank presented confused representations regarding alleged "handling" and demanded answers to questions that were not feasible in the circumstances.
- On April 25, 2022, the bank continued with the same confused conduct, when it sent the plaintiff's representative, Mr. Rotem, a reply letter full of errors. It was argued that the sanctions were in general from the US Treasury Department (a claim from which the bank retracted a few months later when it claimed that it was British sanctions) and that the transfer of Svetlana back to the sender (a claim that turned out to be incorrect).
- I am aware that this was a period with many changes in view of the sanctions policy, but the bank must reflect the matter to the customer in the most accurate and correct manner, and the improbable questions, as well as a factually incorrect letter sent by the Bank's Ombudsman, give rise to an uncomfortable feeling regarding the service provided to the plaintiff.
- In my opinion, this misconduct establishes the plaintiff's entitlement to compensation for mental anguish in the sum of ILS 5,500.
D.8. The result of the matter - the plaintiff is not entitled to most of the remedies claimed by him, except for compensation for mental anguish:
- The result, therefore, is that the claim should be dismissed and the plaintiff is not entitled to the remedies claimed by him:
- The plaintiff is not entitled to an injunction instructing the bank to credit his account in the sum of $10,000. The bank lawfully holds a designated transition account and the plaintiff is not entitled to them at this time. In other words, after the crisis is resolved, the plaintiff will be able to receive his money.
- Accordingly, the plaintiff is also not entitled to an injunction instructing the bank to return to the plaintiff the sum of the two transfers.
- I also do not believe that the bank was negligent or caused the plaintiff damage. In my opinion, the plaintiff acted "with his eyes open", tried to transfer funds from a number of sources from Russia to Israel, knowing that some of the funds might not be transferred due to the sanctions, and therefore he has no cause of action in this regard against the bank.
- As for the bank's procedures, the demand to accept them is not suitable for a speedy legal proceeding, and this is sufficient to reject the request. At the same time, and as I explained above, there is no reason to order the disclosure of the bank's procedures dealing with money laundering. This is likely to harm and thwart the fighting on the issue. This is a public interest that outweighs the individual interest of the plaintiff.
- As stated above, I am of the opinion that the bank's conduct vis-à-vis the plaintiff was difficult, burdensome and confused, and therefore the plaintiff is entitled to compensation for mental anguish in the sum of ILS 5,500.
- Conclusion:
- The plaintiff finds himself in a situation in which his funds are withheld in light of sanctions imposed by international bodies. The funds are not transferred tohis account, and given that they were received from Russia through a correspondent bank from the United States (which is also subject to sanctions), the funds cannot be returned. Therefore, they are in a bank transfer account.
- I hope that this situation will be resolved soon, as it means that the funds are "stuck" and do not reach their destination. At the same time, the rationale for this is to enforce international sanctions as part of an international enforcement mechanism that the Bank must respect.
- As stated above, the lion's share of the claim is to be dismissed. The bank did not breach its debts; The bank was not negligent and there is no reason to instruct the bank to return the withheld funds or to compensate the plaintiff for negligence.
- At the same time, and as I noted above, the plaintiff is entitled to compensation for mental anguish in the sum of ILS 5,500. Accordingly, the defendant must bear legal expenses and attorney's fees on the very low side (in view of the rejection of the bulk of the claim) in the sum of ILS 1,500. The amounts will be paid within 30 days.
The secretariat will report to the parties.