Reuters , Dhaka/New York :Bangladesh’s central bank said it has reversed its plans to sue the Federal Reserve Bank of New York and the SWIFT money transfer network, and instead intends to seek their help recovering $81 million stolen by cyber thieves in February.”At the moment we have no plan to go for any legal action against the Fed bank or SWIFT; rather we will seek their assistance,” said Subhankar Saha, the spokesman for Bangladesh Bank. He declined to provide reasons for the turnabout. A source close to the Asian central bank last month said it was preparing litigation to seek compensation, claiming errors by the New York Fed and SWIFT had made Bangladesh Bank vulnerable. In the February heist, hackers issued false transfer orders on the SWIFT network to move funds out of Bangladesh Bank’s account at the Fed. Bangladesh’s finance minister had also said in March he was weighing legal action. “We only assessed different options, including the legal (option),” Saha said on Tuesday. “We look forward to cooperation both from the Fed and SWIFT.” Officials from the Fed and Bangladesh’s finance minister Abul Maal Abdul Muhith were not immediately available for comment.The shift came as meetings were to begin in New York on Tuesday between officials from Bangladesh Bank, the New York Fed and SWIFT. It also comes after the New York Fed last week published its standard contract with correspondent banks, which spells out that the burden of preventing and reporting breaches lies largely with the correspondent bank, in this case Bangladesh Bank.Saha said there was no link between the decision not to pursue a lawsuit and the contract. “We were assessing options, and we prefer cooperation,” he said. Deputy governor Abu Hena Mohammad Razee Hassan, who is heading the Bangladesh Bank team in the New York meetings, said the bank operates under the standard Fed contract. He did not comment on any possible lawsuit. The standard contract includes a requirement for the correspondent bank to “immediately” notify the US central bank when it learned it was hacked, and to give the Fed “a reasonable opportunity to act” on cancellation requests. The Fed was bound to then “make reasonable efforts” to halt any fraudulent payments it had made. The New York Fed is liable for acting on unauthorized payments only if it does not comply with agreed authentication messages, or fails to exercise good faith when filling a payment request, according to the contract. The published contract notes litigation must be heard in a US court. In the Feb. 4 heist, the hackers peppered the Fed with payment requests, four of which were filled. Much of the money disappeared into casinos in the Philippines.Reuters reported last month that Bangladesh Bank did not realize it had been hacked and d id not attempt to alert the New York Fed until two days after the money had been sent. By that time, a weekend in New York, the Fed took two more days to respond. Reuters also reported that the New York Fed attempted and failed to cancel the payments and did not immediately inform Bangladesh Bank of its efforts. A team from Bangladesh is scheduled to meet officials of the Federal Reserve Bank of New York, the Federal Bureau of Investigation and the US justice department this week in New York in connection with the cyber theft of $81 million from the South Asian country’s central bank in February, sources said. Two people close to the Bangladesh central bank said the goal of the meetings starting on Tuesday would be to discuss what led to the heist, carried out by unidentified hackers, and how such events can be prevented in future. A New York Fed official told Reuters the aim would be “to understand what happened, what remediation steps have been taken by Bangladesh Bank to meet its contractual obligations, and to begin a path to normalize operations.”In one of the largest cyber heists ever, hackers penetrated Bangladesh Bank’s systems and sent the New York branch of the US central bank dozens of payment requests from an account it maintained for Bangladesh. They sought nearly $1 billion, and $81 million was paid out and lost.The New York Fed in June wrote to the Philippines’ central bank, prodding it to help Bangladesh Bank recover the money that was transferred to beneficiary accounts at the Manila-based Rizal Commercial Banking Corp (RCBC) (RCB.PS) before most of that was laundered through casinos there.Bangladesh Bank officials believe the nudge from the New York Fed was one of the reasons the Philippines central bank last week slapped a record fine of 1 billion pesos ($21 million) on RCBC in connection with the heist, and that it was important to sustain the pressure. Bangladesh Bank holds RCBC accountable for letting most of the money out despite stop-payments requests from Dhaka.But Maria Celia Estavillo, RCBC’s legal and regulatory affairs head, told Reuters her bank should not be held accountable for the loss and that they were “victims too”.”The theft took place in Bangladesh and the money is not with RCBC,” she said in an interview last Tuesday. “They know where the money went. They should pursue them. We believe that people who received the funds should return the funds.”Bangladesh Bank hopes the meetings in New York will prompt the Philippines to work toward retrieving the money, said the sources with direct knowledge of the meetings. Bangladesh’s central bank already has said it had a commitment from Philippines President Rodrigo Duterte that the money would be returned.The meetings with the FBI and Justice Department will help to identify the hackers, who remain at large more than six months after the heists, said one of the sources.The New York Fed declined to comment. Bangladesh Bank spokesman Subhankar Saha could not immediately be reached for comment. The FBI and Justice Department, both of which are investigating, did not immediately respond to calls.Bangladesh police have been working with FBI officials but this would be a rare meeting between Bangladesh Bank officials and the US agency.The team from Dhaka will consist of Bangladesh Bank deputy governor Abu Hena Mohd. Razee Hassan, Abdul Rab from its financial intelligence unit, the bank’s lawyer Ajmalul Hossain, Debdulal Roy from its information systems development department and Zakir Hossain Chowdhury from its accounts department.
