They claim that some of their counterfeiters have accounts with Bank of China and have issued subpoenas for information about their financial transactions. The bank has responded that to provide the information would violate Chinese law and that China has a vital national interest in protecting the account security of its citizens in order to develop its banking system.

Secrecy laws and immunity

A hearing next Tuesday will determine whether the lender should be held in contempt of court and be fined millions of dollars for defying the court’s order. The outcome of the case could set the tone for US lawyers who are attempting to pierce China’s secrecy laws, which a congressional commission wrote are used by Chinese businesses to keep themselves ‘largely immune from the jurisdiction of US courts.’   

The price to pay

Bank of China is among four state-owned banks that have targeted overseas expansion to offset slowing profit growth. This has brought them into conflict with the US legal system, which generally sees abiding by US law as the price a company must pay for doing business there. Sources: The Wall Street Journal; AP