Why did HY Energy Group sue JPMorgan and Citibank, and what were the amounts involved?

HY Energy Group sued Citibank in a Shanghai court in February over a $27 million payment initiated in July 2023 that was never received by the intended recipient, China Oil and Petroleum Co., and was later confirmed by Citibank in May 2024 to have been released to the U.S. Treasury’s Office of Foreign Assets Control (OFAC); separately, HY Energy sued JPMorgan in Beijing in March over a failed $13.5 million transfer to the same recipient, with JPMorgan citing a May 31, 2024 SWIFT message stating the funds were frozen pursuant to OFAC guidance.

What is HY Energy’s core legal argument regarding the timing of the payment freezes?

HY Energy’s core legal argument rests on the timing discrepancy: although Hong Kong-based China Oil and Petroleum Co. was added to OFAC’s Specially Designated Nationals list in February 2024, the transfers were blocked as early as mid-2023—before any official designation—leading HY Energy to contend the early freeze lacked legal basis and caused direct financial losses for which the banks should be held liable.

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