Hamas Bank Case Settled

A major terrorism- financing lawsuit was settled before a court appearance, reports Stephanie Clifford:

Last year, a jury in Federal District Court in Brooklyn found Arab Bank liable for financing terrorism by processing transactions for members of the militant Islamic group Hamas.

The second phase of the trial, assessing the damages Arab Bank would have to pay to some victims of attacks by Hamas, was scheduled to start on Monday…

The first part of the Hamas trial, which was about liability, occurred last year. Arab Bank argued that it never knowingly held accounts for terrorists. It said that it screened all of the accounts and transactions it handled against terrorist blacklists, and that the few transactions that got through were attributable to clerical errors, such as a different spelling of a name in Arabic and in English…

Banking executives said the case set a worrisome precedent, since Arab Bank seemed to follow standard screening procedures to check that its customers were not listed as terrorists. The verdict, they said, could mean banks would pull back from doing work in unstable countries, given the risk that they would later be held liable for financing terrorism.

The Obama administration had intervened in the case on the Bank’s behalf. The Solicitor General argued that Arab Bank had cooperated in anti-terrorism activities and deserved some deference.

As I wrote at the time, the whole case raised some questions about whether the US legal system was biased against financial entities from the Middle East.

With this settlement, the immediate issue seems moot. The broader question – about the consistency of punitive and unpredictable treatment of global financial services players by US courts – remains open for another day.

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