May 10, 2021

Terror aid claims reinstated against U.K. bank

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natwestBy Mark Hamblett, From New York Law Journal

U.S. nationals who were victims of terrorist attacks in Israel have another chance to pursue claims that the National Westminster Bank supported Hamas by handling money for the Palestine Relief & Development Fund.

The U.S. Court of Appeals for the Second Circuit Monday reinstated a case brought in Brooklyn federal court by more than 200 U.S. nationals, or their surviving family members, who were victims of Hamas attacks.

In Weiss v. National Westminster Bank, 13-1618-cv, the Second Circuit said a lower court erred in applying the mental state required for liability under the Antiterrorism Act, 18 U.S.C. §§2333(a) and 2339B(a)(1).

The Weiss ruling was issued the same day an Eastern District jury found Arab Bank liable for violating civil provisions of the Anti-Terrorism Act in Linde v. Arab Bank, 04-CV-2799 (See related story).

The plaintiffs in Weiss claimed that the bank, known as NatWest, violated the Antiterrorism Act by providing material support and resources to a terrorist organization when it processed funds for the Palestine Relief & Development Fund (Interpal), a United Kingdom-based, self-described charitable organization that was labeled a Specially Designated Global Terrorist organization by the U.S. Treasury Department Office of Foreign Assets in 2003.

Interpal is registered with the Charity Commission for England & Wales, which froze its accounts and began an investigation when Interpal received the designation.

The probe quickly cleared Interpal, with the commission finding U.S. authorities were unable to support allegations against the group or show any evidence of it having clear links with Hamas.

But in 2005, NatWest reported its own suspicions that Interpal had made a payment to an organization supporting terrorism—and that some other organizations receiving funds from Interpal were suspected of having connections with Hamas. The bank ultimately closed its Interpal accounts in 2007.

NatWest moved before Eastern District Judge Dora Irizarry (See Profile) for summary judgment, arguing that it lacked the scienter required for an award of civil remedies under the Antiterrorism Act. It also said the plaintiffs lacked standing, and that the terrorist acts were committed by Hamas in Israel, and those acts were the proximate cause of plaintiffs’ injuries.

Irizarry granted the bank’s motion for summary judgment. The plaintiffs appealed, arguing that the judge applied the wrong standard under the Antiterrorism Act.

Judges Dennis Jacobs (See Profile), Pierre Leval (See Profile) and Rosemary Pooler (See Profile) heard oral argument on March 11 before vacating Irizarry’s ruling Monday and remanding for further proceedings.

Writing for the circuit, Leval said §2339(a) incorporates the knowledge requirement from §2339(B)(a)(1), which “prohibits the knowing provision of any material support to terrorist organizations without regard to the types of activities supported.”

He cited Holder v. Humanitarian Law Project, 561 U.S.1 (2010), where the U.S. Supreme Court upheld §2339B against First Amendment challenges, saying “Congress plainly spoke to the necessary mental state for a violation of §2339B, and it chose knowledge about the organization’s connection to terrorism, not specific intent to further the organization’s terrorist activities.”

Leval said that under the plaintiffs’ theory of liability, “they must present evidence showing that NatWest provided material support to Interpal while having knowledge that, or exhibiting deliberate indifference to whether Interpal, ‘solicit[ed] funds or things of other value’ for Hamas, regardless of whether those funds were used for terrorist or non-terrorist activities.”

The lower court, he said, placed a more “onerous burden” on the plaintiffs by focusing on NatWest employees’ knowledge of Interpal’s “terror financing.”

“This focus on ‘terror financing,’ as opposed to the financing of a terrorist organization, regardless of the character of the activities being financed, is not consistent with the text of §2339(B),” he said.

“Moreover, the district court found that NatWest did not exhibit deliberate indifference to whether Interpal was a terrorist organization” after it was labeled a Specially Designated Global Terrorist organization “in part, because British authorities—the Charity Commission, the Special Branch, and the Bank of England—condoned NatWest’s relationship with Interpal,” Leval said. “In this regard, the court gave inappropriate weight to the British authorities’ decisions.”

While the views of foreign governments might be presented to a trial jury to support NatWest’s defense that it did not believe Interpal was supporting terrorism, “in the face of contrary findings—in this case by the United States Treasury Department—such views of foreign governments cannot support summary judgment,” Leval said.

Peter Raven-Hansen argued for the plaintiffs. Gary Osen of Osen LLC in Hackensack, one of several firms representing plaintiffs, said Monday the decision “is a major victory for American terror victims.”

“We believe that no person or corporation choosing to conduct business in the United States should be allowed to knowingly provide material support to U.S.-designated terrorists or do so with deliberate indifference to the facts that they are assisting terrorist organizations,” Osen said.

Jonathan Blackman, partner at Cleary Gottlieb Steen & Hamilton argued for the bank.


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