A recent decision by a US federal court has upheld the dismissal of claims from US service members and civilians against three major global banks, accused of indirectly funding terrorism in Afghanistan. The US Court of Appeals for the Second Circuit based its ruling on the plaintiffs’ inability to substantiate allegations under the Justice Against Sponsors of Terrorism Act (JASTA). This act demands evidence of “conscious and culpable participation” in terrorist activities, a standard established in the Supreme Court’s recent ruling in Twitter, Inc. v. Taamneh.
The lawsuit targeted Deutsche Bank, Standard Chartered Bank, and Danske Bank, alleging they facilitated payments that eventually funded terrorist entities like Al-Qaeda and the Taliban. Plaintiffs, comprising victims and families of attacks between 2011 and 2016, invoked the Anti-Terrorism Act (ATA), which allows US nationals harmed by international terrorism to seek civil action. Despite claims of the banks’ involvement in activities, such as money laundering and providing financial services to companies linked to terrorist activities, the court emphasized the alleged negligence did not meet the threshold for actionable intent under JASTA.
This ruling echoes a trend within the judiciary to avoid extending secondary liability to financial institutions without concrete proof of intent to aid terrorism. The Second Circuit has consistently dismissed similar claims, including those against the Hongkong and Shanghai Banking Corporation (HSBC) for alleged sanction violations benefiting terrorist groups. In related cases, tribunals have focused on the necessity for clear evidence that banks had intent or awareness in assisting such activities.
This legal development reflects broader judicial caution in attributing liability to banks for the indirect facilitation of terrorism. Such cautious interpretation upholds the principle that negligence or routine banking services, however harmful, do not equate to complicity in terrorism without substantive evidence of intent.