Arab Bank ruling could have far-reaching implications for terrorists and their victims
But more tellingly, the case, which asserted violations by the Arab Bank of the U.S. Anti-Terrorism Act, could affect policies by banks worldwide.
“Congress adopted the Anti-Terrorism Act for the specific purpose of giving American victims and their families the opportunity to bring litigation against terrorists and their funders,” said one of the plaintiffs’ attorneys, Richard Heideman, an international human rights lawyer with the Washington, D.C.-based firm Heideman Nudelman and Kalik.
Now, “every terrorist group, every terrorist supporter, and every funder of terrorism is on notice that the U.S. judicial system will protect the right of the American victims to seek recovery, hold those [terrorists] fully accountable, and gain justice through our American courts,” Heideman told JNS.org.
After 10 years of back-and-forth litigation, a jury of eight women and four men in the Federal Court in the Eastern District of New York in Brooklyn unanimously agreed Sept. 22 that the Arab Bank knowingly provided material support and funding to individuals and organizations that led to 24 terrorist attacks by Hamas in Israel from 2001-2004.
Numerous cases were consolidated under the lead case, Linde et al. v. Arab Bank PLC, which was filed in 2004. Over the five-week trial, attorneys for the plaintiffs proved that the Arab Bank turned a blind eye to accounts of well-known Hamas members, such as the group’s founder, Sheikh Ahmed Yassin, and Lebanon-based spokesman Osama Hamdan, as well as Hamas-linked aid organizations like the Saudi Committee for the Support of the Intifada al Quds. According to court documents, the Saudi Committee, under the guise of a humanitarian organization, paid out amounts of around $5,300 to the families of suicide bombers. In total, the bank disbursed up to $100 million to the organization.
According to Heideman, a portion of the funding was provided through front organizations operating as “Zakat” (Islamic charity) entities—disbursing funds, including cash payments, through 22 branches in the West Bank and Gaza. Often, these cash payments were given to individuals who were not account holders.
The bank, which is seeking to reverse the verdict in the Second Circuit Court of Appeals, argued that its branch managers checked all individuals against appropriate blacklists, such as those produced by the U.S. Treasury’s Office of Foreign Assets Control (OFAC), and that the individuals and organizations provided with funds were cleared.
One of the plaintiffs’ witnesses was Matthew Levitt of the Washington Institute for Near East Policy, who told the jury that the OFAC list was just “one tool in the toolkit and that banks are responsible to know their own customers and know the nature of the terrorist organizations that exist.”
The plaintiffs argued that under the Know Your Customer (KYC) provisions of the U.S. Patriot Act of 2001, banks operating in the United States have the responsibility to conduct their own additional research into their clients.
Another one of the plaintiffs’ attorneys, Peter Raven-Hansen, a professor of law and co-director of the national security and U.S. foreign relations law program at George Washington University, said that the jury saw convincing evidence that the bank knew that its customers were terrorists despite passing the “OFAC list filter.”
“In 1999, the United States government designated al-Qaida as a foreign terrorist organization and put it on the OFAC list,” Raven-Hansen told JNS.org. “But suppose in November 2001, Osama bin Laden comes into your bank and seeks to withdraw $100,000 from his account. And the tellers say, ‘My God, that’s Osama bin Laden, I’d know him anywhere.’ And they run to their manager and they say, ‘Can we give this man $100,000?’ And the manager says, ‘Let me check the OFAC list. I don’t see Osama bin Laden’s name there so go right ahead.’”
On the other hand, according to Raven-Hansen, if bin-Laden’s driver came in and asked for the money, the bank could make a better case that they didn’t know, but the driver would have to be properly vetted under KYC rules.
“So the question here is, Are the people that the Arab Bank paid more like Osama bin Laden or more like his driver? And the answer is they’re clearly a bunch of bin Ladens,” he said. “It simply offends common sense, and obviously offended the jury, to think that the bank didn’t know who these people were, even though they weren’t listed by name on any list.”
Following the recent verdict, the Arab Bank released a statement slamming the trial and saying that it will pursue an appeal. The bank also claimed that the verdict sets a dangerous precedent for the international banking community.
“Today’s decision, if it stands, exposes the banking industry to enormous liability for nothing other than the processing of routine transactions,” said the statement. “This precedent would create vast uncertainty and risk in the international finance system and accelerate de-risking activities already underway that are reducing the availability of financial services in certain areas of the world and to certain populations.”
The defense also claimed that sanctions applied to certain parts of the bank’s evidence prevented it from conducting a proper defense. The sanctions were a result of a previous court ruling in which the bank declined to produce documents from 10 of 11 accounts of known terrorists which the court felt were highly relevant. The bank cited privacy laws in Jordan and Palestine as the reason not to disclose those documents.
To level the playing field, those records were made inadmissible for use as evidence by the defense. The bank then sought a hearing from the U.S. Supreme Court, which decided not to take the case and let the sanctions stand.
Nitsana Darshan-Leitner, founder and director of the Israel-based civil rights organization Shurat HaDin, said the decision will send “shock waves” throughout the global banking industry. Darshan-Leitner and her organization have actively pursued similar cases on behalf of terrorism victims in the U.S., Israel, and the world, but so far only against organizations and governments such as Iran and the Palestinian Authority.
Although this case took 10 years, Darshan-Leitner, whose clients include some plaintiffs in the Arab Bank case, said that in Israel, cases that were filed as far back as 2000 are still in different stages of litigation.
“[In Israel] it tends to be something to which both the courts and the Foreign Ministry are afraid to rule on or get involved,” Darshan-Leitner told JNS.org. “Our cases have been stalled for many years.”
*Article originally published in JNS.org/Washington Jewish Week on Wednesday October 1, 2014 by Dmitriy Shapiro.