The Wall Street Journal
November 5, 2010
A major Middle Eastern bank launched a final effort Thursday to avoid legal sanctions punishing it for not disclosing client records in a terror-finance case that could have repercussions for other international banks.
Citing bank-secrecy laws in several countries where it operates, Jordan-based Arab Bank PLC has defied U.S. federal court orders to turn over documents sought by American victims of terrorist attacks and their families in a long-running private case related to Palestinian terror attacks in Israel. The plaintiffs say the bank enabled the attacks by acting as a conduit for money from Saudi donors that went to families of suicide bombers and terror groups, a charge the bank denies.
The suit, which was filed in U.S. District Court for the Eastern District of New York in Brooklyn in 2004, alleges that Arab Bank financed Palestinian terrorism by, among other things, paying a “comprehensive insurance benefit” of around $5,300 to families of suicide bombers on behalf of the Saudi Committee, a government-run charity. The suit also alleges that the bank knowingly provided banking services to groups such as Hamas and the Palestinian Islamic Jihad, which are both considered terrorist groups by the U.S.
In an unusual legal move, Arab Bank on Thursday asked an appeals court in New York to intervene to overturn harsh sanctions imposed by the federal court after the bank declined to turn over customer records.
The outcome of Arab Bank’s fight to maintain the confidentiality of client records is being followed closely by other international banks facing similar claims in U.S. courts. In separate but similar cases contending that the banks acted as conduits for money used to finance terror groups and attacks, France’s Crédit Lyonnais, now part of Crédit Agricole SA, and NatWest of Britain, part of Royal Bank of Scotland Group PLC, both asserted they were bound by secrecy laws in their home countries, but acquiesced when the judge ruled against them…
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