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Bank of China Faces Daily Fine in US

source: bbc

The Bank of China will face a daily fine in the US unless it complies with a court request to give details of customers accused of selling fake goods.

The bank was held in contempt of court in Manhattan last week for refusing to turn over the records.

The state-owned lender is appealing the civil contempt order and fine of $50,000 a day starting on 8 December.

It said it would be violating China's privacy law if it gave the information.

The records stem from a 2010 lawsuit by a group of luxury retailers including Gucci and Yves Saint Laurent that sued a group of Chinese companies for allegedly selling counterfeits goods like handbags.

The luxury brands had asked US district judge Richard Sullivan to order the Bank of China (BOC) to pay $12m (£8m) to cover their losses from counterfeiting or impose a fine.

Ongoing dispute

The judge had initially ordered the bank to provide the customer information in 2011 and then renewed the order in September.

"BOC's refusal to comply with US law, while it continues to receive the benefits attendant to its banking activity in the US, has inflicted a significant harm on plaintiffs and the general public," Mr Sullivan said.

"Only a large fine will have a coercive effect on BOC at this stage."

The judge has also ordered the top-four Chinese lender to cover the retailers' legal costs.

But the bank said the judge lacked the jurisdiction to force its compliance.

The Bank of China is the country's fourth biggest lender by assets and made a profit of nearly $28bn in 2014.