A clear warning to the banks: Stop providing banking services to the terrorists

The Almog v. Arab Bank case was brought by victims or family members of victims of suicide and other bombings carried out by various terrorist organizations who allege that Arab Bank had “knowingly provided banking and administrative services to various organizations identified by the US government as terrorist organizations that sponsored suicide bombings and other numerous attacks on innocent civilians in Israel”.

Arab Bank filed a motion to dismiss on the basis, among others, (1) that a heightened pleading standard should apply to terrorist financing cases, and (2) that providing banking services to, and allowing its bank to be used for the transfer of funds to, terrorists and organizations affiliated with terrorists constitutes nothing more than “ordinary banking transactions”.

On January 29, 2007 (almog_v. Arab Bank Opinion and Order 29012007.pdf), the US District Court for the Eastern District of New York partially denied Arab Bank’s motion to dismiss in ruling on two critical issues often arising in terrorism financing cases:

Pleading standards in TF cases

The Court ruled that “None of provisions of the Anti-Terrorism Act imposes a heightened pleading standard, nor do any require that Arab Bank have had the specific intent to cause the specific acts which injured plaintiffs… It is sufficient that Arab Bank played a role in a well-publicized plan to reward terrorists killed and injured in suicide bombings and other attacks in Israel; knew that the groups to which it provided services were engaged in terrorist activities; and knew that the funds it received as deposits and transmitted to various organizations were to be used for conducting acts of international terrorism”.

Bank liability standard for business transactions

To escape liability, banks usually argue in terrorism financing cases that they’ve “merely provided routine banking services”. The Court rejected that argument by ruling that “Arab Bank ignores that acts which in themselves may be benign, if done for a benign purpose, may be actionable if done with the knowledge that they are supporting unlawful acts … Given plaintiffs’ allegations regarding the knowing and intentional nature of the Bank’s activities, there is nothing “routine” about the services the Bank is alleged to have provided”. The Court here confirmed a previous ruling in Linde v. Arab Bank in 2005 providing that where “the Bank knows that the groups to which it provides services are engaged in terrorist activities” even the provision of basic banking services may qualify as material support”.

 

Posted in Banks Tagged with: , , ,

About JC Brisard

Jean-Charles Brisard

Jean-Charles Brisard is an international consultant, specialized in the financing of terrorist organizations.
His biography

Twitter Jean-Charles BrisardLinkedIn Jean-Charles BrisardYoutube Jean-Charles BrisardFacebook Jean-Charles Brisard