Beginning in 2004, civil lawsuits were filed in the U.S. District Court for the Eastern District of New York by both U.S. and non-U.S. citizens against Arab Bank. The litigation, brought under the Anti-Terrorism Act (ATA) and Alien Tort Statute (ATS), seeks to hold the Bank liable for injuries resulting from acts of terrorism that occurred in the Middle East. There is no allegation that the Bank engaged in acts of terrorism directly. Rather, the lawsuits claim that the Bank improperly provided banking services to individuals or organizations that it knew to be affiliated with terrorist groups. Arab Bank denies all wrongdoing; it maintains that its processing of automated, electronic fund transfer instructions was routine and lawful and that it did not knowingly or intentionally do business with individuals or organizations that were affiliated with terrorism.
On November 6, 2012, Senior Judge Jack B. Weinstein dismissed the first case to be decided on summary judgment in its entirety. In Mati Gill v. Arab Bank, a case brought under the ATA, Judge Weinstein evaluated the evidence and found that it does not support the claim “that the Bank acted with an improper state of mind or proximately caused plaintiff’s injury.” [Read the full opinion here.]
In separate cases, on August 23, 2013, Eastern District Court Judge Brian M. Cogan ordered the dismissal of claims filed by more than 6,000 plaintiffs against Arab Bank under the ATS. The decision dismissed more than 90 percent of the claims pending against the Bank. [Read the opinion here.]
Jury selection for trial in Linde v. Arab Bank, the lead case for the claims remaining against Arab Bank, is scheduled for August 11, 2014.
This section outlines the primary allegations that the plaintiffs assert in their complaints against the Bank.
The Saudi Committee
Plaintiffs allege the Bank provided material support to terrorists in violation of U.S. anti-terrorism laws by processing wire transfer instructions received from a bank located in Saudi Arabia for fund transfers that were initiated by an organization known as the Saudi Committee. The Bank maintains that it processed automated, electronic fund transfer instructions, initiated by the Saudi Committee, lawfully as a correspondent bank under a commercial agreement with a Saudi bank. Arab Bank processed the Saudi Committee transfers with the understanding that they were intended to alleviate a humanitarian crisis in the Palestinian Territories and not, as the lawsuits allege, to incentivize Palestinians to commit terrorist attacks.
The Saudi Committee was not a customer of Arab Bank, and the Bank did not have any role in choosing the recipients of wire transfers from the Saudi Committee. In processing these transactions, the Bank adhered to the anti-money laundering and anti-terrorism regulations promulgated by the regulators in the relevant jurisdictions. To this day, the Saudi Committee remains in good standing in the United States.
Plaintiffs also allege that the Bank provided material support to terrorists in violation of U.S. anti-terrorism laws by providing banking services to charities operating in the Palestinian Territories that were allegedly “front organizations” for, or “alter egos” of, terrorist groups such as Hamas. The Bank maintains that it followed routine banking procedures in providing services to these charities, and that it did not have any reason to believe that they were “front organizations,” as the plaintiffs allege.
During the time period at issue in the lawsuits, any charity wishing to open an account with the Bank in the Palestinian Territories was required to present an official license or certificate of registration authorizing its activities. Therefore the charities to which the Bank provided routine banking services were authorized and lawful in the jurisdictions in which they operated. Moreover, the United States government, and a number of U.S. non-governmental organizations, provided funding to many of these same charities, alleged by the plaintiffs to be “front organizations” for terrorist groups, during the time period at issue in the lawsuits. And none of these charities were designated by the United States as terrorist organizations or affiliates of terrorist organizations at the time the Bank provided the banking services at issue.
In granting the Bank’s motion for summary judgment in Gill, Judge Weinstein held that the plaintiff had “fail[ed] to provide sufficient information to establish… that the charities were alter egos of Hamas,” and noted that “[t]here is no proof that anything but routine financial services to the charities alleged to be front organizations were provided, and none of the charities were designated by the United States as front groups when the charities received services from the Bank.”
Finally, plaintiffs allege the Bank provided material support to terrorist groups in violation of U.S. anti-terrorism laws by processing automated, electronic fund transfers involving individuals allegedly affiliated with terrorist groups such as Hamas. Following up on its own counter terrorism actions from 2004, in 2009 the Israel Defense Forces stated that it had no “information that indicated that the Bank or any of its employees were involved in any way whatsoever in terrorist activities, or funded terrorism.” The IDF also stated that “… neither the IDF nor the Israeli Defense Authorities have any intention of taking steps against the Arab Bank for involvement in terrorist acts or in funding terrorism.”
In evaluating the evidentiary record with regard to these allegations, Judge Weinstein noted that the transfers at issue involved individuals that had not been blacklisted in the jurisdictions in which the financial transfers occurred, and, with few exceptions, involved individuals that had never been designated as terrorists by the United States. On this record, Judge Weinstein concluded that the plaintiff’s proof was “[i]nsufficient… to tie the personal bank accounts of individuals who may be affiliated with Hamas to Hamas itself.” Judge Weinstein also held that “[c]onsidering the large number of customers the Bank had, the evidence [adduced by the plaintiff] has less than a trace of probative value,” and that “[p]laintiff can point to no evidence that the Bank consciously disregarded a substantial risk that the services it provided would end up in the hands of Hamas.”