Argentina threatened Friday to revoke Citibank's operation license if it refuses to process payments to bondholders, a move ordered by a New York judge presiding over a long fight between the country and a U.S. investment group.

In a statement, the Ministry of Economy said failure to process the payments could lead to criminal charges against Citibank's employees in Argentina. The warning came a day after U.S. District Judge Thomas Griesa told Citibank that it cannot let its Argentine branch process payments to bondholders unless U.S. investors are paid as well.

In a statement sent to The Associated Press late Friday, Citibank said it planned to appeal the decision and would "pursue all legal measures available to comply both with this decision and Argentine legislation."

The dispute stems from Argentina's default in 2001 on $100 billion of debt. Most bondholders agreed to debt-swap deals in 2005 and 2010 that lowered Argentina's payments. A group of U.S. hedge funds, however, demanded full payment on Argentina's debt and Griesa ruled they must be paid roughly $1.5 billion if Argentina pays interest to other bondholders.

In arguments made last week, Argentina said payments processed through Citibank's local branches should not be subject to Griesa's rulings. The judge, however, disagreed, saying there was overwhelming evidence the bonds had been marketed outside Argentina despite being processed locally.

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"Judge Griesa's order violates, again, basic legal principles and makes clear that his decisions are not grounded in the law, but in his obvious bias against Argentina," the ministry statement said.

The judge urged Argentina to return to the bargaining table to negotiate a solution to the dispute. President Cristina Fernández, known for fiery, populist rhetoric, often derisively calls the holdout debtors "vultures" and has said her government won't be extorted by U.S. courts.

"Citibank is in a very tight spot," said Anna Gelpern, a law professor at Georgetown University who is a debt expert. "The judge basically said, 'Your regulatory troubles overseas are not my problem.'"

Citibank forms an important part of Argentina's financial landscape, being used by many multinational companies. According to Citibank's website, the bank opened in Argentine in 1914 and currently operates 74 branches in the country.

Gelpern said the latest ruling could have wide ramifications for domestic debt generation, in Argentina and other countries unable to access international financing. For years, Argentina has been unable to access credit overseas so its only way to finance projects has been through domestic debt issuances.

Griesa's ruling "is really expansive," said Gelpern. "Debt that people thought was domestic isn't domestic anymore."

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