Arab Bank held liable for lending support to terrorists
23 Sep 2014
A federal jury yesterday found Arab Bank liable for lending support to terrorists in over a dozen attacks in the Middle East, the first time a bank had been held liable in a civil suit under a broad anti-terrorism statute, The New York Times reported.
Arab Bank, a major Middle Eastern bank holding $46 billion in assets, faced accusations of lending support to specific terrorist acts knowingly, in and around Israel during the second Palestinian uprising of the early 2000s.
The verdict would strongly impact similar legal efforts to hold financial institutions responsible for wrongdoing by their clients, even if the institutions followed banking rules. The ruling, according to commentators could be seen as a deterrent for banks that conducted business in violent areas.
According to the plaintiffs in the case, around 300 victims of 24 terrorist attacks, said the acts had been carried out by Hamas, and accused Arab Bank of supporting the organisation by handling transfers and payments for Hamas members.
Mark Sokolow, his wife, Rena Sokolow, and their daughter Jamie Sokolow Fenster sustained injuries in a 2002 bombing in Jerusalem.
According to Gary Osen, a lawyer for the plaintiffs, terrorist organisations depended on the financial system to operate, adding they had been able to thrive largely because folks like Arab Bank and others had turned a blind eye.
The Amman-based lender was found liable for doing business with over 150 Hamas leaders and operatives in the early 2000s, helping finance about two dozen deadly suicide bombings, including attacks on crowded restaurants and buses in Tel Aviv and Jerusalem, jurors decided yesterday in federal court in Brooklyn, New York, Bloomberg reported.
According to Michael Elsner, one of the plaintiffs' lawyers who spoke over the phone, the verdict was an incredible message that needed to be understood and heard by the entire financial community, and if one did business with terrorists, one could be held responsible in the US.
According to commentators, the case highlighted the ways banks could play a role in funding terrorist groups and the extent to which they could be held responsible for monitoring their customers, even those who were not on government lists of terrorists.
Credit Lyonnais SA and Bank of China Ltd were facing similar cases in the US, alleging they served as conduits for terrorism financing.