A US-led coalition just launched a major salvo against the Islamic State and various Syrian al-Qaeda affiliates, unleashing the largest single-day amount of American ordnance since the 2011 NATO strikes on Libya.
But this week’s biggest hit to international terrorism might have taken place far closer to home: in a courtroom in Brooklyn.
Yesterday, a federal jury found the Amman-based Arab Bank liable for terrorist attacks during the Second Intifada, the anti-Israel terrorism campaign in which over 850 civilians were killed, including several Americans. According to the New York Times, this ruling in favour of 297 American victims or family members of victims of the Palestinian Islamist group Hamas marked “the first time a bank has ever been held liable in a civil suit under a broad antiterrorism statute.”
The plaintiffs claimed that the Arab Bank, which according to the Times sas holds $US46 billion in assets, had hosted the finances of organisations and individuals that furthered Hamas’s terrorist activities. Hamas is a US and EU-designated terrorist organisation that launched numerous attacks on civilian targets during the Second Intifada. And as American citizens suing a bank with a large US presence, the plaintiffs had the legal standing to pursue their case in US court.
The decision sets a significant precedent. The US Treasury Department emerged as a perhaps-surprising contributor to the fight against terrorism and nuclear proliferation in the 13 years since the September 11th attacks, and learned how to hone its sanctions-designation authorities in a way that’s manage to convince much of the world’s formal financial sector to reassess its business practices, for fear of US legal exposure.
Now that foreign banks can be held liable in civil court for terrorist attacks, there’s an added layer of legal incentive for banks to rid themselves of any potential ties to US-listed terror groups.
As Jonathan Schanzer, a former Treasury Department official and current vice president of the Foundation for Defence of Democracies, explained to Business Insider, that US listing might now carry more of a legal bite than it did before yesterday’s ruling. After all, it didn’t matter in the Arab Bank’s case that Hamas isn’t considered a terror organisation in Jordan, where the bank is headquartered.
“From their perspective it’s legal,” Schanzer says of Jordanian financial institutions hosting Hamas accounts. “But US persons can still prosecute and the bank can still pay a very heavy price.”
That has implications for any country that hosts Hamas members — a group that includes important regional US allies. Turkey is home to Saleh Arouri, the head of Hamas’s militant operations in the West Bank and a suspected source of funding and organisation for the Hamas cell that abducted and murdered three Israeli teens in June — one of whom was reportedly a US citizen.
Much of the Hamas politburo is based in Qatar, a Gulf kingdom whose military is assisting in airstrikes in Syria; several Hamas members are based in Beirut, Lebanon as well.
Yesterday’s ruling shows that if those Hamas figures hold bank accounts or use banks for any form of fundraising, those financial institutions can be successfully sued in US court. The same goes for banks hosting accounts for members of any other US terrorist group that has killed American citizens, like ISIS, the Taliban, or Hezbollah.
This ruling has the potential to choke off terrorist groups’ access to the legitimate economy. But it could have a few problematic short-term consequences as well.
“Arab Bank is still kind of the only bank that has really good access to Gaza,” Schanzer notes.
Aid organisations and foreign contractors will have to park their money somewhere during the multi-year, multi-billion-dollar post-conflict reconstruction effort in the coastal strip. This ruling will likely force the Arab Bank to ratchet up its compliance and be far more careful about whose business it is willing to accept — possibly slowing down its operations in Gaza and hampering the rebuilding program.
And the Arab Bank is effectively the state bank of Jordan, which is home to over 600,000 Syrian refugees.
In all, yesterday’s ruling may force several foreign banks to change their practices. And it will keep groups like Hamas out of the financial system — while leading to a period of potential friction during a time when much of the Middle East is in turmoil.
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