prepared by the Central Bank of Uruguay, dated September 15, 2006. This information has been transmitted to the petitioners. III. POSITIONS OF THE PARTIES A. The Petitioners 5. The petitioners alleged violation of the right to property of 686 Uruguayan depositors over their deposits, as a result of the “passive complicity” of the Uruguayan authorities in the “fraud” committed by the shareholders and the management of the Banco de Montevideo.1 The petition states that on June 21, 2002, the Central Bank of Uruguay intervened in the administration of the Banco de Montevideo and the Banco La Caja Obrera, which both belonged to the Velox group. According to the petition, on June 24 that year, it came to the attention of around 1,200 Banco de Montevideo depositors that their savings had been transferred offshore without their consent and that they had been the victims of a “huge fraud” carried out by the Peirano family, the majority shareholder in the Velox Group, with the complicity and passiveness of the Central Bank of Uruguay and the Ministry of Economy and Finance. 6. The petitioners alleged that the fraud was perpetrated as follows. The company known as the Trade & Commerce Bank (TCB) had a representation office in Montevideo and its domicile was in the same office building as the Banco de Montevideo. TCB was authorized to offer technical assistance and advisory services in order to prepare, promote, or facilitate the business affairs of its clients. TCB was not allowed, either on its own behalf or that of its clients, to engage in financial intermediation activities, or credit and exchange operations, or to receive sums of money, securities, or precious metals from third parties in any capacity. However, acting without the approval or supervision of the Central Bank of Uruguay, TCB, through its intermediary, Banco de Montevideo, was receiving deposits from the public and falsifying the consent of depositors. The deposits were then transferred to the Cayman Islands, the domicile of the Velox Economic Group, which owned both the Banco de Montevideo and the TCB. 7. Thus, the petitioners allege, the customers were deceived into believing that their savings were deposited in the Banco de Montevideo when, in fact, they were transferred to accounts offshore. According to the petitioners, in order to induce the error of the depositors, the company organized a series of data and tools to falsify the consent of the victims such as using the same logo for the Banco de Montevideo S.A and the Trade & Commerce Bank. The petitioners say that when the Central Bank of Uruguay intervened in the administration of the Banco de Montevideo, the situation was revealed and approximately 1,200 people in Uruguay, Argentina, and Paraguay were affected. 8. The petitioners say that these events occurred in the context of the financial crisis that struck Uruguay as a result of the crisis in Argentina.2 To deal with the crisis, on December 27, 2002, the Uruguayan Parliament passed Law 17.613 (Law on Restructuring the Financial System).3 The petitioners argue that while the purpose of the aforesaid law was to mitigate the devastating effects of the crisis on users of the financial system, it was ineffective and failed to provide the depositors with adequate access to an effective remedy to recover their savings, in violation of their right to judicial protection provided in Article 25 of the American Convention. According to the petitioners, Article 31 of the aforementioned law empowered the Central Bank 1 The fraud, according to the petitioners, involved approximately US$800 million of the depositors’ money and US$97 million in TCB funds. 2 On December 1, 2001, Argentine Economy Minister Cavallo and President De la Rúa of Argentina signed the decree preventing the public from withdrawing more than US$150 a week of their bank deposits. The freeze (known as “el corralito”) prompted Argentines to withdraw their deposits from Uruguayan banks. There were US$16 billion in the Uruguayan banking system and more than 45% of foreign currency deposits (US $ 6.2 billion out of US $ 13.6 billion) belonged to non-residents, nearly all of them Argentines. 3 Law 17.613 on “Strengthening the Banking System, Financial Intermediation, Protection of Bank Savings and Unemployment Allowance for Account Holders in the Caja de Jubilaciones y Pensiones Bancarias.” 2

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