After about a decade of waiting, and a last ditch attempt to get the US government or Supreme Court to block the case, the most significant terror finance case ever to go to trial in US history, against Arab Bank, is set to begin on Monday.
The Jordanian government implied that if the bank – essentially Jordan’s sovereign bank – loses, its economy and the entire counter-terror cooperation with the US could fall apart.
Whatever the result, the case could shine a light on the world of terror financing.
The case itself, which many high profile news outlets have regularly followed and CBS News’s Sunday Morning program featured, involves allegations that Arab Bank facilitated massive transfers of funds to Hamas leaders and institutions, as well as to the families of imprisoned Hamas members and suicide bombers, via Saudi Arabia and Hezbollah’s al-Shahid Foundation – mostly between 1998 and 2004 (though evidence may focus on 2001-2004.) The plaintiffs alleged that Arab Bank knew that the funds related to terrorists and terror groups, and is thus civilly liable for deaths resulting from terror attacks perpetrated using the transferred funds, and must thus pay damages for the killing of their family members.
Arab Bank said there is a lack of proof the funds went to terrorists, that the funds contributed directly and sufficiently to terror attacks or that the bank had any knowledge of a connection to terrorism.
A critical issue in the case – which brought the US State Department, Justice Department and Treasury Department to loggerheads over what official US policy should be – is an April 2013 sanctions order imposed by a New York federal court that penalized the bank for refusing to hand over key documents that the plaintiffs said they needed to prove their case.
The bank said it refused the plaintiffs’ requests because it could have incurred criminal sanctions from Jordan and Lebanon for violating bank secrecy laws. However, a lower US court rejected this rationale and ordered that a jury could infer that the bank’s refusal to release documents was tantamount to an admission of guilt.
In May, the US government said the Supreme Court should not intervene pretrial, but harshly criticized the lower court for not fully considering the foreign policy consequences of disregarding Jordanian sovereign interests in the case.
If Jordan’s interests are ignored, the US government reserved the right to intervene post-trial.
Gary Osen, one of the lead lawyers for the numerous plaintiffs remarked at the time: “Hopefully, we’ve cleared the last roadblock to a trial on the merits. Our clients have waited 10 years for this moment.”
Another question is what standard of proof would be applied to the bank. The answer to this could set precedents for massive banks in policing their wire transfers, heightening standards of responsibility.
This includes pass-through institutions for correspondent banks where the transfer funds originate.
Arab Bank bristled at the idea that it was connected to terrorism, or should be held responsible for fund transfers to persons whom the US might later have declared terrorists – and who, at the time of the funds’ transfer, were not on the US Office of Foreign Assets Control watch-list.
It asked how it can be held to a higher accountability standard than the US government, particularly when some of the funding sources in dispute had received transfers directly from parts of the US government and had been declared “terror free” by top US officials at the time. Over the years of numerous trials, some of this evidence had been thrown out as too general.
Prior to Monday’s trial, Arab Bank maintained its claim that the transfers were made with no knowledge of wrongdoing at the time – despite the terror-connected persons the transfers were made to, including Hamas leader Ismail Haniyeh, arch-terrorist commanders (now deceased) Salah Shehada and Ahmed Jabari, and Hamas founder Ibrahim al-Muqadama.
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