In a landmark court verdict whose ramifications may be of seminal importance in the battle against terrorism, a federal jury in New York City has concluded that a major financial institution in the Middle East, Arab Bank, supported terrorism.
The judgment, handed down on Sept. 22, is significant. It’s said to be the first civil case against a bank to reach trial under the United States’ Anti-Terrorism Act.
Arab Bank, founded in Mandatory Palestine in 1930 and based in Jordan, is no minor company. It has $46 billion in assets, branches in 30 countries and employs 6,000 workers.
The 297 plaintiffs, all American citizens, accused Arab Bank of knowingly supporting 24 acts of terrorism during the second Palestinian uprising, which erupted in September 2000. This intifada claimed the lives of hundreds of Israeli civilians, many of whom were killed in suicide bombings by Hamas operatives.
The plaintiffs charged that Arab Bank had handled transactions — transfers and payments — for well-known figures in Hamas, classified as a terrorist group by many countries, and should have been aware that it was engaging in wrongdoing.
Hopefully, the case will have a chilling effect on banks that have been tempted to consort with terrorists.
As one of the plaintiffs’ lawyers, Gary Olsen, said, “Terrorist organizations are dependent on the financial system to operate. They’ve been able to thrive largely because … Arab Bank and others have turned a blind eye.”
Arab Bank has challenged the verdict, claiming it had followed standard compliance procedures and properly checked the backgrounds of its clients.
As The New York Times reported, the case now turns to a crucial phase, the cost of Arab Bank’s liability. This matter will be decided in a separate trial, whose date has yet to be scheduled. The plaintiffs have not asked for a specific sum in compensation, but judging by several precedents in which plaintiffs were awarded tens of millions of dollars each, experts think it will exceed $1 billion.
Let this precedent-setting case serve as a deterrent to those who play with fire.