Court Opinion

ID: 4468250
Source: CourtListenerOpinion
Date Created: 2019-12-30 20:01:49.063396+00
Date Added: 2024-06-11T08:48:40.647126
License: Public Domain

6OLS2S173

               81,7('67$7(6&28572),17(51$7,21$/75$'(

<$0$5,%%216$1'%2:6&2

                      3ODLQWLII

                Y

81,7('67$7(6                                 %HIRUH7LPRWK\&6WDQFHX&KLHI-XGJH
                      'HIHQGDQW               &RXUW1R
               DQG

%(5:,&.2))5$<//&

                      'HIHQGDQW,QWHUYHQRU

                                    23,1,21$1'25'(5

>2UGHULQJUHPDQGRIDILQDODJHQF\GHWHUPLQDWLRQLQDFRXQWHUYDLOLQJGXW\SURFHHGLQJRQ
QDUURZZRYHQULEERQVZLWKZRYHQVHOYHGJHIURPWKH3HRSOH¶V5HSXEOLFRI&KLQD@

                                                                'DWHG: December 30, 2019 

      John J. KenkelGH.LHIIHU +RUJDQ3//&RI:DVKLQJWRQ'&IRUSODLQWLIIid.
&RXUW1R                                                                        3DJH

  '7KH'HSDUWPHQW¶V'HFLVLRQWR,QFOXGHWKH(%&33URJUDPLQ'HWHUPLQLQJLHWKHJRYHUQPHQWRI&KLQD@ZLWKKHOGQHFHVVDU\LQIRUPDWLRQDQG

IDLOHGWRFRRSHUDWHE\QRWDFWLQJWRWKHEHVWRILWVDELOLW\WRFRPSO\ZLWKRXUUHTXHVWVIRU

LQIRUPDWLRQ&RPPHUFHDSSOLHG$)$WRWKH*2&E\ILQGLQJWKDWWKHH[SRUWEX\HU¶VFUHGLWV

SURJUDPFRQVWLWXWHVDILQDQFLDOFRQWULEXWLRQDQGLVVSHFLILF´)LQDO'HFLVLRQ0HP-$SS

DW

          &RPPHUFHSUHVHQWHGLWVUHDVRQLQJIRUUHVRUWLQJWR³IDFWVRWKHUZLVHDYDLODEOH´LQWKH

3UHOLPLQDU\DQGWKH)LQDO'HFLVLRQ0HPRUDQGD,QERWK&RPPHUFHGHFOLQHGWRGHFLGHZKHWKHU

WKHUHFRUGHYLGHQFHGLGRUGLGQRWVXSSRUWDILQGLQJWKDWD@VZHQRWHGLQWKHPreliminary

ResultsWKH*2&KDVQRWSURYLGHGWKHUHTXHVWHGLQIRUPDWLRQDQGGRFXPHQWDWLRQQHFHVVDU\IRU

&RPPHUFHWRGHYHORSDFRPSOHWHXQGHUVWDQGLQJRIWKLV>([SRUW%X\HU¶V&UHGLW@SURJUDP i.e.

WKH6WDQGDUG4XHVWLRQV$SSHQGL[LQIRUPDWLRQSHUWDLQLQJWRWKHUHYLVLRQWRWKHSURJUDP

DQGWKHXVHRIWKLUGSDUW\EDQNVWRGLVEXUVHVHWWOHH[SRUWEX\HU¶VFUHGLWV ´ Id.DW

&RPPHUFHDGGHGWKDW³>V@XFKLQIRUPDWLRQLVFULWLFDOWRXQGHUVWDQGLQJKRZH[SRUWEX\HU¶V

FUHGLWVIORZWRDQGIURPIRUHLJQEX\HUVDQGWKH(;,0%DQNRI&KLQD$EVHQWWKHUHTXHVWHG

LQIRUPDWLRQZHDUHXQDEOHWRUHO\RQWKH*2&¶VDQGLH&RPPHUFH@RUWKH&RPPLVVLRQXQGHUWKLVVXEWLWOH % IDLOVWR
SURYLGHVXFKLQIRUPDWLRQE\WKHGHDGOLQHVIRUVXEPLVVLRQRIWKHLQIRUPDWLRQRULQWKHIRUPDQG
PDQQHUUHTXHVWHG & VLJQLILFDQWO\LPSHGHVDSURFHHGLQJXQGHUWKLVVXEWLWOHRU ' SURYLGHV
VXFKLQIRUPDWLRQEXWWKHLQIRUPDWLRQFDQQRWEHYHULILHGDVSURYLGHGLQVHFWLRQP L RIWKLV
WLWOH>FRQFHUQLQJWKHYHULILFDWLRQSURFHVV@´86&H D  
&RXUW1R                                                                    3DJH

0HP-$SSDW&RPPHUFHDGGHGWKDW³>R@EYLRXVO\WKLVKDVDQHIIHFWRQWKHUHVSRQGHQW

FRPSDQ\>LHZDV@WKHUHE\FRQIHUUHG´86&

  % ,QVWHDGRIGRLQJWKDW&RPPHUFHSODFHGD@IWHU

FRQVXOWDWLRQZLWK(;,0%DQNDQGsic@86H[SRUWFXVWRPHUV>sic@ZKLFKWKHQ
        ZDVSURYLGH>sic@WR(;,0%DQN(;,0%DQNWKHQVHDUFKHGLQLWVRZQ
        V\VWHPVHDFKRIFXVWRPHUVLGHQWLILHGRQWKHOLVW7KHVHDUFKUHVXOWVLQGLFDWHWKDW
        QRQHRIWKHFXVWRPHUVKDGEDODQFHVIRUH[SRUWEX\HU¶VFUHGLWVGXULQJWKH325
        7KXV*2&FRQILUPVWKLVSURJUDPZDVQRWXVHGE\WKHVHFXVWRPHUVGXULQJWKH
        325
        
Id.DW2QWKLVUHFRUG&RPPHUFHZDVQRWIUHHWRLJQRUHUHFRUGHYLGHQFHWKDWsic@ QRPHDVXUDEOHEHQHILWV´ZKLFKVHWRXWVHYHQWHHQGLIIHUHQWSURJUDPVDQG

LQVWUXFWHGWKH*2&WR³SOHDVHDQVZHUDOOTXHVWLRQVLQWKHStandard Questions Appendix and

any other applicable appendicesRIWKLVVHFWLRQ´IRUHDFKSURJUDPXVHGE\DQ\FRPSDQ\GXULQJ

WKH325Id. DW HPSKDVLVLQRULJLQDO 7KHTXHVWLRQQDLUHLQVWUXFWHGIXUWKHUWKDW³>L@I

            
              ,QUHFHQWGHFLVLRQVWKLV&RXUWKDVUHMHFWHGRURWKHUZLVHGHFOLQHGWRVXVWDLQWKH
'HSDUWPHQW¶VDSSOLFDWLRQRIDPHWKRGRORJ\VLPLODUWRWKDWXVHGKHUH Guizhou Tyre Co. v.
United States&,7BB)6XSSG   ³Guizhou I´ Changzhou Trina Solar
Energy Co. v. United States&,7BB)6XSSG   ³Changzhou II´ 
Changzhou Trina Solar Energy Co. v. United States&,7BB)6XSSG 1RY
  ³Changzhou III´ Guizhou Tyre Co. v. United States&,7BB)6XSSG
 0D\  ³Guizhou II´ Guizhou Tyre Co. v. United States&,7BB)6XSSG
 $XJ  ³Guizhou III´ Changzhou Trina Solar Energy Co. v. United States
&,7BB:/ 1RY  ³Changzhou IV´ Changzhou Trina Solar Energy
Co. v. United States&,7BB:/ 1RY  ³Changzhou V´ Guizhou
Tyre Co. v. United States,&,7BB:/ 'HF  ³Guizhou IV´ 
&RXUW1R                                                                    3DJH

QRUHVSRQGHQWFRPSDQ\XVHGDSURJUDPGXULQJWKHVWDWHGWLPHSHULRGSOHDVHVRVWDWH\RXQHHG

QRWSURYLGHDUHVSRQVHWRWKHDSSHQGLFHVIRUWKHSURJUDP´Id.DW ,QDFFRUGDQFHZLWKWKH

LQVWUXFWLRQVFRQWDLQHGLQWKHTXHVWLRQQDLUHid. DWWKHJRYHUQPHQWRI&KLQDIRUZDUGHG

6HFWLRQ,,,RIWKHTXHVWLRQQDLUHWR7@KH'HSDUWPHQWKDVLQLWLDWHGDQ

LQYHVWLJDWLRQLQWRWKLVSURJUDP>LHWKH(%&3@DQGKDVIRXQGLWFRXQWHUYDLODEOHLQPDQ\FDVHV´

DQG³VKRXOGGRVRKHUH´ $FFRUGLQJWRWKLVVXEPLVVLRQWKH([SRUW,PSRUW%DQNRI&KLQD

SURYLGHG³H[SRUWFRQWLQJHQWORDQVDWSUHIHUHQWLDOUDWHV´GXULQJWKH325IRUFHUWDLQSURGXFWV

LQFOXGLQJWH[WLOHVId.DW
&RXUW1R                                                                3DJH

      &RPPHUFHSURFHHGHGWRLQYHVWLJDWHWKHQHZVXEVLG\DOOHJDWLRQLQFOXGLQJD@QVZHUDOOTXHVWLRQVLQWKHIROORZLQJDSSHQGLFHVIRUWKLVSURJUDPStandard

Questions Appendix.´'HS¶W&RPPHUFH/HWWHUWR*RY¶WRI&KLQDUH1HZ6XEVLG\$OOHJDWLRQV

0DU  35'RF-$SSDW  ³)LUVW16$4XHVWLRQQDLUH´ 7KH6WDQGDUG

4XHVWLRQV$SSHQGL[LVQRWVSHFLILFWRWKH(%&3RUDQ\RWKHUSURJUDP,WFRQWDLQVOHWWHU

GHVLJQDWHGTXHVWLRQV³$´WKURXJK³0´PDQ\RIZKLFKFRQWDLQHGVXESDUWVZLWKDGGLWLRQDO

TXHVWLRQVSee id.DW 6WDQGDUG4XHVWLRQV$SSHQGL[ 4XHVWLRQ$VRXJKW³D

GHVFULSWLRQRIWKHSURJUDPLQFOXGLQJWKHSXUSRVHRIWKHSURJUDPDQGWKHGDWHLWZDV

HVWDEOLVKHG´ Id. DW4XHVWLRQ%DVNHGIRUWKHQDPHVDQGDGGUHVVHVRIWKHJRYHUQPHQW

DJHQFLHVRUDXWKRULWLHVUHVSRQVLEOHIRUDGPLQLVWHULQJWKHSURJUDPId.,QIRUPDWLRQUHVSRQVLYH

WRERWKTXHVWLRQVLVRQWKHUHFRUGRIWKHUHYLHZSURYLGHGLQWKHJRYHUQPHQWRI&KLQD¶VUHVSRQVH

WRWKHVHFRQG16$TXHVWLRQQDLUHDVGLVFXVVHGEHORZ%HFDXVHWKHUHLVQRHYLGHQFHRQWKH

UHFRUGWKDWQ@RWDSSOLFDEOH´DV³G@HQW¶VFXVWRPHUV´Id. HPSKDVLVLQ

RULJLQDO 7KHUHIRUHWKHUHVSRQVHIURPWKHJRYHUQPHQWRI&KLQDWRWKHILUVW16$TXHVWLRQQDLUH

ZDVQRWDIDLOXUHWRFRRSHUDWHXQOHVVFRQWUDU\WRWKH&KLQHVHJRYHUQPHQW¶VUHVSRQVH

            
              7KHLQVWUXFWLRQVIRU4XHVWLRQ&RIWKH$SSHQGL[SURYLGHGDVIROORZV
            
            ,IQRQHRIWKHVHFRPSDQLHV>LHWKHFRPSDQLHVXQGHUUHYLHZ@DSSOLHGIRU
            UHFHLYHGFODLPHGDFFUXHGRUXVHGDVVLVWDQFHXQGHUWKLVSURJUDPGXULQJWKH
            SHULRGGHVLJQDWHG>LHWKHSHULRGRIUHYLHZ@you need not reply to all of the
            remaining questions in this Appendix
            
'HS¶W&RPPHUFH/HWWHUWR*RY¶WRI&KLQDUH1HZ6XEVLG\$OOHJDWLRQV 0DU  35
'RF-$SSDW HPSKDVLVDGGHG :KLOHWKH'HSDUWPHQW¶V16$4XHVWLRQQDLUHWR
&KLQDFRQWDLQHGDJHQHUDOGLUHFWLYHWR³DQVZHUDOOTXHVWLRQV´LQWKH6WDQGDUG4XHVWLRQV
$SSHQGL[WKHVSHFLILFH[FHSWLRQWRWKLVJHQHUDOGLUHFWLYHZKLFKDSSHDUHGLQ4XHVWLRQ&FDQEH
UHDGWRDSSO\LQWKLVLQVWDQFH
&RXUW1R                                                                3DJH

&RPPHUFHSHUPLVVLEO\FRXOGILQGWKDWDQ\(%&3FUHGLWVWRL@QIRUPDWLRQREWDLQHGLQDSULRU&9'SURFHHGLQJ´LQGLFDWLQJWKHHOLPLQDWLRQRIWKH

UHTXLUHPHQWId.

        ,QLWV0D\UHVSRQVHWRWKH'HSDUWPHQW¶VVXSSOHPHQWDO16$TXHVWLRQQDLUHWKH

&KLQHVHJRYHUQPHQWVWDWHGWKDWWKHFRQWUDFWDPRXQWPXVWEHPRUHWKDQPLOOLRQ86GROODUV

WKDWWKLVUHTXLUHPHQWFRXOGQRWEHVDWLVILHGE\FRPELQLQJLQYRLFHVRIOHVVHUDPRXQWVWKDWWKH

(;,0%DQNKDGFRQILUPHGWKLVUHTXLUHPHQWDQGWKDWLWKDGDWWDFKHGWRLWVUHVSRQVH³$UWLFOH

RIWKH$GPLQLVWUDWLYH0HDVXUHVRI([SRUW%X\HU¶V&UHGLWRI(,%& µ$GPLQLVWUDWLYH

0HDVXUHV¶ ´LQZKLFKWKHUHTXLUHPHQWLVVHWIRUWK&KLQD6XSSOHPHQWDO16$5HVSRQVH

-$SSDW

        &RPPHUFHDGGHGWRWKHUHFRUGWZRVXEPLVVLRQVIURPSULRUSURFHHGLQJV7KHILUVWZDVD

&RPPHUFHYHULILFDWLRQUHSRUWGDWHG2FWREHURIDTXHVWLRQQDLUHUHVSRQVHRIWKH

&KLQHVHJRYHUQPHQWLQDQDGPLQLVWUDWLYHUHYLHZRIDFRXQWHUYDLOLQJGXW\RUGHURQFLWULFDFLGV

DQGFLWUDWHVDOWVIURP&KLQD6DOWV9HULILFDWLRQ0HP-$SSDW7KHUHSRUWGHVFULEHVD
&RXUW1R                                                                   3DJH

PHHWLQJEHWZHHQ'HSDUWPHQWRIILFLDOVZLWK(;,0%DQNRIILFLDOVDQGVWDWHVDVIROORZV³2QH

RIWKHFRQGLWLRQV>RIWKH(%&3@SULRUWRDQGGXULQJWKH325ZDVWKDWVDOHVFRQWUDFWVKDYHWREH

DPLQLPXPRI86PLOOLRQ(;,0RIILFLDOVLQGLFDWHGWKHAdministrative MeasuresZDV

UHYLVHGLQDQGHOLPLQDWHGWKHFRQWUDFWPLQLPXP´Id.DW

        7KHVHFRQGVXEPLVVLRQDGGHGWRWKHUHFRUGLVWKH³*RYHUQPHQWRI&KLQDWK

6XSSOHPHQWDO5HVSRQVH´LQDQDGPLQLVWUDWLYHUHYLHZRIDFRXQWHUYDLOLQJGXW\RUGHURQFHUWDLQ

DPRUSKRXVVLOLFDIDEULFIURP&KLQDGDWHG6HSWHPEHU/HWWHUIURP3HUNLQV&RLH

³*RYHUQPHQWRI&KLQDWK6XSSOHPHQWDO5HVSRQVH´ 6HSW  35'RF-$SS

DW  ³&KLQD6LOLFD)DEULF5HVSRQVH´ 7KHRQO\UHIHUHQFHLQWKLVGRFXPHQWVXJJHVWLQJ

WKDWWKHPLOOLRQFRQWUDFWWKUHVKROGZDVHOLPLQDWHGLQLVLQWKH'HSDUWPHQW¶VILUVW

TXHVWLRQ7KDWTXHVWLRQUHIHUVWRDQHDUOLHUTXHVWLRQQDLUHUHVSRQVHLQWKDWSURFHHGLQJLQZKLFK

WKH&KLQHVHJRYHUQPHQWPHQWLRQHGWKDWWKHPLOOLRQUHTXLUHPHQWZDVLQHIIHFW&RPPHUFH

DVNHGIRUDFODULILFDWLRQRIWKH³GLVFUHSDQF\´ZLWKRWKHULQIRUPDWLRQLQWKH'HSDUWPHQW¶V

SRVVHVVLRQZKLFKSRVVLEO\LVDUHIHUHQFHWRWKHYHULILFDWLRQUHSRUWGLVFXVVHGDERYH7KH

JRYHUQPHQWRI&KLQD¶VUHVSRQVHUHIHUV&RPPHUFHWRWKH³2000 Rules Governing Export

Buyers’ Credit DOVRUHIHUUHGWRDVµAdministrative Measures¶ LQZKLFKWKH86PLOOLRQ

WKUHVKROGUHTXLUHPHQWDSSHDUHGIRUWKHILUVWWLPH´Id.DW7KHUHVSRQVHDOVRVWDWHVWKDW

Administrative Measures³UHPDLQLQHIIHFW´DQG³ZHUHQRWUHSHDOHGRUUHSODFHGLQ´E\

JXLGHOLQHVLVVXHGLQZKLFKWKH&KLQHVHJRYHUQPHQWGHVFULEHGDV³LQWHUQDOWRWKHEDQN

QRQSXEOLFDQGQRWDYDLODEOHIRUUHOHDVH´Id.DW

        7KHRQO\UHFRUGHYLGHQFHWKDWWKHPLOOLRQWKUHVKROGZDVGLVFRQWLQXHGLQLVWKH

'HSDUWPHQW¶VVWDWHPHQWLQLWVYHULILFDWLRQUHSRUWRQWKHUHYLHZRQFLWULFDFLGDQGFLWULFVDOWVDQG
&RXUW1R                                                                        3DJH

WKHDSSDUHQWO\UHODWHGUHIHUHQFHWRLWLQWKHTXHVWLRQQDLUHPHQWLRQHGDERYH$OORWKHUUHFRUG

HYLGHQFHLQFOXGLQJERWKRIWKH&KLQHVHJRYHUQPHQW¶VUHVSRQVHVLQWKHDPRUSKRXVVLOLFDIDEULF

UHYLHZDQGLQWKLVUHYLHZLQGLFDWHVWKDWWKHUHTXLUHPHQWUHPDLQHGLQHIIHFW%XWHYHQLILWLV

SUHVXPHGWKDWWKHHOLPLQDWLRQRIWKHUHTXLUHPHQWDFWXDOO\RFFXUUHGLQ IRUZKLFKWKHUHLV

OHVVWKDQVXEVWDQWLDOHYLGHQFHRQWKLVUHFRUG VXFKDSUHVXPSWLRQZRXOGQRWHVWDEOLVKWKDWW@KLVVDPH$)$GHWHUPLQDWLRQ
IROORZLQJWKHFKDQJHVWRWKH(%&3URJUDPZDVXSKHOGE\WKH&RXUWLQRZBC Grp.
Shareholding Co. v. United States)6XSSG &W,QW¶O7UDGH ´
'HI,QW%HUZLFN2IIUD\¶V5HVSLQ2SS¶QWR3O¶V0RWIRU-RQWKH$JHQF\5 1RY 
(&)1R7KHFRXUWGLVDJUHHVWKDWLWLV³WKHVDPH$)$GHWHUPLQDWLRQ´RBZC Grp.
LQYROYHGIDFWVQRWSUHVHQWRQWKLVUHFRUGKHUHLQFOXGLQJUHMHFWLRQRIDSURIIHUHGWUDQVODWLRQRI
Administrative Measures DVXQWLPHO\QHZLQIRUPDWLRQ,QVXSSRUWRIWKHVDPHDUJXPHQW
GHIHQGDQWLQWHUYHQRUUHOLHVXSRQChangzhou Trina Solar Energy Co. v. United States&,7
BBBB)6XSSG   ³Changzhou I´ 7KLVGHFLVLRQDOVRLV
LQDSSRVLWHDVLWLQYROYHGDUHIXVDOE\WKHJRYHUQPHQWRI&KLQDWRDOORZDFFHVVWRUHFRUGVGXULQJ
WKHYHULILFDWLRQSURFHGXUHWKDWUHODWHGWRWKHTXHVWLRQRIDFXVWRPHU¶VSRVVLEOHXVHRIWKH(%&3
&RXUW1R                                                                    3DJH

 &RPPHUFH1HYHU5HTXHVWHG,QIRUPDWLRQRQ7KLUG3DUW\%DQNV,QYROYHGLQWKH³6HWWOHPHQW´
RI([SRUW%X\HU¶V&UHGLWVDQGWKH)LQGLQJRI1RQFRRSHUDWLRQDVWRWKLV5HTXHVWLV8QVXSSRUWHG

       7KHWKLUGFDWHJRU\RILQIRUPDWLRQ&RPPHUFHFODLPHGWRQHHGDQGFODLPHGWKH&KLQHVH

JRYHUQPHQWIDLOHGWRSURYLGHZDVLQIRUPDWLRQRQ³WKHXVHRIWKLUGSDUW\EDQNVWRGLVSHUVHVHWWOH

H[SRUWEX\HU¶VFUHGLWV´)LQDO'HFLVLRQ0HP-$SSDW7KHUHFRUGGRHVQRWVXSSRUWD

ILQGLQJWKDWWKH&KLQHVHJRYHUQPHQWIDLOHGWRDQVZHUWKHLQTXLU\UHJDUGLQJGLVEXUVHPHQWRI

FUHGLWV7KHJRYHUQPHQWRI&KLQDFODULILHGWKDWQREDQNRWKHUWKDQWKH(;,0%DQNGLVEXUVHG

FUHGLWVXQGHUWKH(%&3DQGSURYLGHGDGHWDLOHGGLVFXVVLRQRIWKHSURFHVV7KHUHFRUGDOVR

UHYHDOVWKDW&RPPHUFHFRQWUDU\WRLWVILQGLQJRIQRQFRRSHUDWLRQQHYHUUHTXHVWHGIURPWKH

JRYHUQPHQWRI&KLQDLQIRUPDWLRQRQWKHVHWWOHPHQWRI(%&3FUHGLWV

       ,QLWVILUVW16$TXHVWLRQQDLUH&RPPHUFHDVNHGWKHJRYHUQPHQWRI&KLQDWR³>S@URYLGHD

OLVWRIDOOSDUWQHUFRUUHVSRQGHQWEDQNVLQYROYHGLQGLVEXUVHPHQWRIIXQGVXQGHUWKH([SRUW

%X\HU¶V&UHGLW3URJUDP´)LUVW16$4XHVWLRQQDLUH-$SSDW+RZHYHUDVWKHFRXUW

GLVFXVVHGDERYHWKLVUHTXHVWIRULQIRUPDWLRQZDVOLPLWHGE\WKHLQVWUXFWLRQVRQWKHSUHYLRXV

SDJHRIWKDWTXHVWLRQQDLUHZKLFKVSHFLILHGWKDWWKHJRYHUQPHQWPXVWDQVZHUWKLV DQGVL[RWKHU 

TXHVWLRQV³UHJDUGLQJ([SRUW%X\HU¶V&UHGLWVSURYLGHGWRDOO86FXVWRPHUVRIWKHUHVSRQGHQW

LQFOXGLQJDOOUHVSRQGLQJFURVVRZQHGDIILOLDWHGFRPSDQLHV GXULQJWKH325´Id. DW

HPSKDVLVLQRULJLQDO 7KHLQVWUXFWLRQVUHSHDWHGWKLVOLPLWDWLRQUHTXHVWLQJWKHLQIRUPDWLRQ

³UHJDUGLQJDOOEX\HUFUHGLWVSURYLGHGWRWKHUHVSRQ>G@HQW¶VFXVWRPHUV´Id. HPSKDVLVLQ

RULJLQDO 7KH&KLQHVHJRYHUQPHQWUHVSRQGHG³1RWDSSOLFDEOHS@URYLGHDOLVWRIDOOSDUWQHUFRUUHVSRQGHQWEDQNVLQYROYHGLQGLVEXUVHPHQWRI

IXQGVXQGHUWKH([SRUW%X\HU¶V&UHGLW3URJUDP´6XSSOHPHQWDO16$4XHVWLRQQDLUHWR&KLQD

-$SSDW7KH&KLQHVHJRYHUQPHQW¶VUHVSRQVHZDVWKDW³([SRUW,PSRUW (;,0 %DQNRI

WKH35&LVWKHRQO\EDQNZKLFKLVLQYROYHGLQWKH([SRUW%X\HU¶V&UHGLWV3URJUDP´&KLQD

6XSSOHPHQWDO16$5HVSRQVH-$SSDW7KLVUHVSRQVHUHDVRQDEO\FDQEHUHDGDV

UHVSRQGLQJVSHFLILFDOO\WRWKHTXHVWLRQWKDW&RPPHUFHDVNHGLHZKDWEDQNVZHUHLQYROYHGLQ

GLVEXUVHPHQW RI(%&3IXQGVDQGUHIHUULQJWRWKHJRYHUQPHQWHQWLW\WKDWDGPLQLVWHUVWKH

SURJUDP,WZDVLPSHUPLVVLEOHRQWKLVUHFRUGIRU&RPPHUFHWRVWDWHDILQGLQJWKDWWKH

JRYHUQPHQWRI&KLQDKDGIDLOHGWRSURYLGHUHTXHVWHGLQIRUPDWLRQUHJDUGLQJ³WKHXVHRIWKLUG

SDUW\EDQNVWRsettle H[SRUWEX\HU¶VFUHGLWV´)LQDO'HFLVLRQ0HP-$SSDW HPSKDVLV

DGGHG &RPPHUFHQHYHUDVNHGWKHJRYHUQPHQWRI&KLQDIRULQIRUPDWLRQRQWKHSDUWLFLSDWLRQRI

WKLUGSDUW\EDQNVLQWKH³VHWWOHPHQW´RI(%&3FUHGLWV+DYLQJFKRVHQQRWWRPDNHWKLVLQTXLU\

&RPPHUFHFRXOGQRWSHUPLVVLEO\EDVHDQ\ILQGLQJVLQWKH)LQDO5HVXOWVRQWKHIDOVHSUHPLVHWKDW

LWKDG

         :KDWLVPRUHWKHUHFRUGFRQWDLQHGLQIRUPDWLRQRQWKHSURFHGXUHVIROORZHGE\WKH

(;,0%DQN7KHUHVSRQVHRIWKH&KLQHVHJRYHUQPHQWWRWKHVXSSOHPHQWDO16$TXHVWLRQQDLUH

SURYLGHGVXFKLQIRUPDWLRQDQGDGGLWLRQDOLQIRUPDWLRQRQWKHSURFHVVLVFRQWDLQHGLQWKH

TXHVWLRQQDLUHUHVSRQVHRIWKHJRYHUQPHQWRI&KLQDLQWKHSURFHHGLQJRQFHUWDLQDPRUSKRXV
&RXUW1R                                                                   3DJH

VLOLFDIDEULFZKLFK&RPPHUFHLWVHOISODFHGRQWKHUHFRUGSee &KLQD6XSSOHPHQWDO16$

5HVSRQVH-$SSDW&KLQD6LOLFD)DEULF5HVSRQVH-$SSDW7KHODWWHU

GLVFXVVHVWKHSRVVLEOHUROHRIEDQNVRWKHUWKDQWKH(;,0%DQNLQWKHRYHUDOOSURFHVVRI

VHWWOHPHQWRIIXQGVEXWLWLVFRQVLVWHQWZLWKWKHUHVSRQVHWKDWWKH(;,0%DQNLVWKHRQO\HQWLW\

WKDWSHUIRUPVWKHGLVEXUVHPHQW

       2QWKHUHFRUGFRQVLGHUHGRQWKHZKROH&RPPHUFHZDVQRWIUHHWRLJQRUHWKHHYLGHQFH

WKHJRYHUQPHQWRI&KLQDDIWHUREWDLQLQJIURPWKH(;,0%DQNWKHVHDUFKUHVXOWVRQ