FBME Declaration with public exhibits

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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
FBME BANK LTD.; and
FBME LTD.,
Plaintiffs,
Case No. 1:15-cv-01270
v.
JACOB LEW, in his official capacity as
Secretary of the Treasury;
U.S. DEPARTMENT OF THE
TREASURY;
JENNIFER SHASKY CALVERY, in her
official capacity as Director of the Financial
Crimes Enforcement Network; and
FINANCIAL CRIMES ENFORCEMENT
NETWORK,
Defendants.
DECLARATION OF DEREK L. SHAFFER
I, Derek L. Shaffer, declare as follows:
1.
I am a partner of the law firm of Quinn Emanuel Urquhart & Sullivan, LLP,
counsel to Plaintiffs FBME Bank Ltd. and FBME Ltd. (together, “FBME”), and a member in
good standing of this Court. I respectfully submit this declaration in support of Plaintiffs’
Opposition to Defendants’ Motion for a Voluntary Remand.
2.
On August 28, 2015, the day after this Court issued its opinion and order granting
FBME’s motion for a preliminary injunction, counsel for FBME contacted counsel for
Defendants to discuss an expedited briefing schedule for resolution of this case. Over the
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subsequent days, counsel for FBME and counsel for Defendants communicated by telephone and
email regarding an appropriate path forward in this case.
3.
On September 1, 2015, counsel for Defendants informed counsel for FBME that
Defendants would seek a voluntary remand to conduct proceedings before FinCEN, rather than
continue toward summary judgment.
4.
Counsel for FBME was not necessarily opposed to further proceedings before
FinCEN, provided that Defendants would commit to certain conditions designed to ensure that
FBME’s rights would be protected. I summarized the conditions initially proposed by FBME in
an email to counsel for Defendants, a copy of which is attached to this declaration as Exhibit A.
5.
In subsequent telephone conversations, counsel for Defendants informed counsel
for FBME that Defendants would not agree to certain of the conditions. Among other things,
Defendants (1) would not provide a privilege log or other information regarding unclassified
materials Defendants are withholding and will continue to withhold as privileged; (2) would
withhold, on grounds of privilege, all communications with, and information received from, third
parties, including the Central Bank of Cyprus; (3) would not represent that classified or other
material presently withheld is not dispositive of FinCEN’s decision to impose the fifth special
measure.
6.
Over the course of these phone calls, counsel for FBME inquired about certain
material and information FBME believes FinCEN had received from the Central Bank of
Cyprus, including certain reports purportedly produced by PricewaterhouseCoopers. Counsel for
Defendants later represented that it was “now able to say . . . to the best of our knowledge
FinCEN does not have [the PricewaterhouseCoopers reports] in its possession and therefore does
not plan to rely on them.” But counsel for Defendants would not represent, in response to a
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follow-up inquiry, that “FinCEN never previously received, reviewed, or relied upon the
[reports], inclusive of any information, reports, or summaries specifically associated with those.”
A copy of the email exchange in which these representations were made is attached as Exhibit B.
7.
On October 28, 2014, the shareholders and ultimate beneficial owners of FBME,
Ayoub-Farid M. Saab, and Fadi M. Saab, commenced an arbitration before a tribunal of the
International Chamber of Commerce in Paris, France against the Republic of Cyprus pursuant to
the Agreement on the Reciprocal Promotion and Protection of Investments Between the
Lebanese Republic and the Republic of Cyprus. The case is captioned Saab v. Republic of
Cyprus, ICC Case No. 20588/ZF.
8.
On August 31, 2015, the Republic of Cyprus sent a letter to the arbitral tribunal in
Saab v. Republic of Cyprus (the “Arbitral Tribunal”), a copy of which is attached as Exhibit C.
9.
On September 3, 2015, the Republic of Cyprus sent a letter to the Arbitral
Tribunal, a copy of which is attached as Exhibit D.
10.
On September 15, 2015, the Republic of Cyprus sent a letter to the Arbitral
Tribunal, a copy of which is attached as Exhibit E.
11.
On September 18, 2015, the Central Bank of Cyprus sent a letter to the special
administrator of FBME’s Cyprus branch, a copy of which is attached as Exhibit F.
12.
On September 24, 2015, FBME’s statutory manager appointed by the Bank of
Tanzania sent an email to, among others, representatives of the Central Bank of Cyprus, a copy
of which is attached as Exhibit G.
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I declare under penalty of perjury that the foregoing is true and correct to the best of my
knowledge.
Executed in Washington, D.C. on October 5, 2015
Derek L. Shaffer
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EXHIBIT A
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EXHIBIT B
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EXHIBIT C THROUGH G
FILED UNDER SEAL