On Thursday, Pakistan’s largest bank, Habib Bank Limited (HBL), faced secondary liabilities in a terror funding case in the United States in which the complainants alleged that it helped and encouraged Al Qaeda terrorism and participated in a conspiracy to carry out attacks that killed or injured around 370 people.
According to the local report, Judge Lorna G Schofield stated that the bank needed to face liability under the Justice Against Sponsors of Terrorism Act as a party that ‘aids and abets, by knowingly providing substantial assistance, or conspires with the person who committed such an act of international terrorism’.
The judge stated that the complainants in three unified cases adequately alleged that the attacks were scheduled or approved by a Foreign Terrorist Organization such as Al Qaeda or syndicates Lashkar-e-Taiba, Jaish-e-Mohammad, Afghan Taliban, including the Haqqani Network, and Tehreek-i-Taliban Pakistan.
“The complaints also show that the bank knowingly and substantially helped al-Qaeda and its proxies evade sanctions and engage in terrorist acts, which satisfies the knowing assistance requirement”, the Judge stated adding that the bank placed terrorists or those linked to terrorists on a ‘good guy list’ of people ostensibly pre-cleared for reduced scrutiny of their transactions.
Judge Schofield further ruled that the claims were adequate to establish that HBL participated in a conspiracy to perpetrate the assaults. She denied the plaintiffs’ allegations of the principal involvement, however, because none of the claimed financial services supplied by HBL was acts of international terrorism.
The HBL issuing the statement in the matter, however, said the charges against it were baseless, adding that the bank was fiercely disputing them. “The public record is clear that HBL is unwavering in its commitment to combating the financing of terrorism, and as has been well documented its extensive global implementation of anti-money laundering compliance controls has been highly successful and lauded by regulators around the world”, the statement read.
HBL stated in its statement added that its motion was successful in two ways- the court rejected the major responsibility claim and significantly restricted the case. “The court also stated secondary liabilities will be evaluated following due legal proceedings and no judgment was passed by the court on this matter”, HBL added.
The news comes as the Financial Action Task Force (FATF) has increased pressure on Islamabad to take action against terror funding flowing from its territory. The Paris-based watchdog has also suggested that Pakistan might be removed from the grey list if it works effectively against terror organizations.
However, this is not the first time that the bank has come under the lens of transactions relating to terror funding. Earlier in 2017, the bank had been fined $225 million for various violations of New York’s regulatory provisions. In addition, the bank agreed to surrender its license to operate a branch in New York and wind down its activities there. The branch had been operational since 1978.