Multibillion-dollar lawsuit in Israel against Arab Bank

Israeli casualties of terrorism sue the Jordan-based Arab Bank over its alleged assistance to terror groups.

al-monitor The Arab Bank office in the Old City of Amman, Jordan, Jan. 30, 2019. Photo by Artur Widak/NurPhoto via Getty Images.

Jan 7, 2020

The Jordan-based Arab Bank was served with a precedent-setting, 20-billion-shekel ($5.75 billion) lawsuit Dec. 29 in Jerusalem’s District Court. Behind the suit were 1,132 victims and casualties of terrorism and their families, who are accusing the bank of cooperating, supporting, abetting, funding and encouraging terrorist activities, which resulted in thousands of casualties. The plaintiffs claim that the bank was involved in funding terrorist attacks in Israel carried out by Hamas, Islamic Jihad, Fatah and other terrorist organizations.

Among other things, this lawsuit is based on a similar, successful lawsuit against the Arab Bank in the United States in 2004. Initially, Israeli and American citizens filed the suit together, but the court decided to separate the American and the Israeli plaintiffs. The final compromise ruling covered victims of terrorism, who held American citizenship.

The plaintiffs proved that the bank cooperated with terrorist organizations by opening private bank accounts for the families of terrorists, with which they could receive money from donors. The bank admitted that it did, in fact, transfer tens of millions of dollars to these accounts, but denied that it had any connection to Palestinian terrorist organizations. After many years of legal wrangling, a federal court in New York found the bank liable for knowingly supporting terrorist factions of Hamas, which were responsible for dozens of terrorist attacks between 2001 and 2004, in which American citizens were among the victims. Then, in August 2015, before the court could rule on the final sum of the compensation, the bank reached a confidential settlement with the American plaintiffs.

In 2018, the Supreme Court of the United States ruled that the Alien Tort Statute — previously implemented mostly in cases of human rights breach and extreme attacks — does not encompass individuals who are not citizens of the United States when the actions allegedly taken were not committed on American soil. In other words, non-Americans cannot use this law to sue terrorist groups in American courts. This led to the current suit by Israeli victims of terrorism, which was brought before the Jerusalem District Court. In July 2019, the court set a precedent by finding that the Palestinian Authority (PA) was responsible for 17 terrorist attacks during the second intifada (2000-2005), in which 34 Israelis were killed. The plaintiffs demanded about 1 billion shekels ($287 million) in compensation, but the final sum has yet to be determined.

The new lawsuit against the Arab Bank was brought by the victims of terrorism themselves, as well as the families of hundreds of casualties of terrorist attacks that took place in Israel, the West Bank and the Gaza Strip between 1995 and 2005. Among the terrorist attacks listed in the suit were the 1996 attack on Dizengoff Center, which left 13 people dead and about 125 injured; the Dolphinarium attack in Tel Aviv in 2001, in which 21 people were killed and about 120 were injured; the attack on the Sbarro restaurant in downtown Jerusalem in 2001, in which 15 people were killed and about 140 injured; and the 2002 attack on the Park Hotel in Netanya during the Passover seder, which left 30 people dead and about 160 injured.

Ilana, a resident of Jerusalem whose sister was killed by a suicide bomber in the city in 2001, told Al-Monitor that the people directly responsible for the attack, i.e., the terrorists themselves, were captured and punished. On the other hand, the people who funded the terrorists and ensured that their families would be compensated after they went out to kill Jews were never punished. She said that she is not doing this for the money either, adding, “Money will not bring my sister back, but it must be made clear that financial organizations that operate in a legitimate, legal setting cannot exploit their status or the tools at their disposal to support acts of murder and terrorism. [That's why] they must pay.”

The Arab Bank is one of the biggest banks in the Arab world, with an international network of 600 branches. The lawsuit claims that the Arab Bank, its staff and its administration played an integral role in terrorist activity, knowingly funding individual Palestinian terrorists as well as terrorist organizations.

According to the plaintiffs, the bank played an active and important role in collecting donations from around the world to support and fund the families of suicide bombers, casualties and prisoners. It was claimed, among other things, that at the start of the second intifada in 2000, CEO of the Arab Bank Abd al-Majid Shuman established the Foundation to Support the Palestinian People’s Resistance, to help fund the second intifada. He even pledged to donate $500,000 of his own money to the cause, while the bank committed itself to contribute an additional $2 million.

The plaintiffs are represented by four Israeli attorneys specializing in personal injury cases, which involve terrorist funding, genocide and crimes against humanity. One of them, Attorney Gil Maman, told Al-Monitor that the Arab Bank operates out of an anti-Israel ideology, and that its financial reports state explicitly that the bank should not conduct business with Israel or “Zionist” institutions. He also claimed that during the second intifada, the bank’s employees were asked to contribute part of their salaries to Palestinian terrorist organizations. Maman noted that in 2005, the US Department of the Treasury fined the Arab Bank $24 million for failing to prevent its New York City branch from laundering money to fund terrorism. While the bank agreed to pay the fine, it would not admit to the alleged crimes.

According to Maman, Israel helped the plaintiffs in the case against the Arab Bank by providing them access to documents from terrorist organizations, which were seized by the Israel Defense Forces and the Shin Bet during operations in the West Bank and the Gaza Strip. As far as Israel is concerned, the fight against the financing of terrorism is one way to harm groups like Hamas and Islamic Jihad. The so-called Deduction Law is another part of this fight. This law, adopted by the Knesset in 2018, enables Israeli authorities to deduct stipends paid by the PA to families of Palestinian assailants from tax revenues collected by Israel on the PA’s behalf. As such, it is damaging to the PA and weakens Palestinian President Mahmoud Abbas.

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