WASHINGTON / KARACHI: Pakistan’s largest commercial bank, Habib Bank Limited (HBL), faces secondary liability in a terror financing case in the United States, but the bank insists that it adheres to all laws and regulations, terming the allegations “meritless”.

US-based financial news service, Bloomberg, reported on Thursday that HBL “failed to shake off claims of aiding and abetting Al Qaeda terrorism and joining in a conspiracy to launch attacks that killed or injured 370 plaintiffs or their family members in Afghanistan between 2010 and 2019.

However, HBL spokesman Ali Habib told Dawn that “the bank adheres to the highest standards of compliance with international and country laws and regulations”.

The charges have been filed under the US Justice Against Sponsors of Terrorism Act that widens the scope for civil claims against a foreign state or entity for injuries, death or damages from an act of international terrorism. It also narrows the scope of foreign sovereign immunity for US citizens to seek legal actions against non-citizens.

Bank terms allegations levelled in court ‘meritless’, says it adheres to ‘highest standards of compliance’ with all laws, regulations

Judge Lorna G. Schofield of the Southern District of New York observed during a hearing on Wednesday that the bank has been charged as a party that “aids and abets, by knowingly providing substantial assistance, or who conspires with the person who committed such an act of international terrorism”.

Ms Schofield noted the plaintiffs in the three consolidated cases alleged that the attacks were planned or authorised by an organisation designated under the Immigration and Nationality Act as a Foreign Terrorist Organisation (FTO), including Al Qaeda or one of the “syndicate FTOs” like Lashkar-e-Taiba, Jaish-e-Mohammed, and the Afghan Taliban.

The Haqqani Network and the Pakistani Taliban have also been named in the complaint.

The plaintiffs also allege that the bank knew its customers were “integral to Al Qaeda’s overall campaign of terrorism, carried out directly and by proxy”.

The allegations also include the claim that the bank “took deliberate steps to help customers evade international sanctions regimes, and in doing so incurred business risk that ultimately led to defendant’s expulsion from the US.”

While the judge noted that the allegations “are sufficient to show that HBL joined in a conspiracy to commit the attacks”, she dismissed the plaintiffs’ claims of primary liability because none of the alleged banking services provided by the bank “were themselves acts of international terrorism”.

HBL viewpoint

In a statement shared with Dawn, HBL said that it’s aware of the news item published by Bloomberg and “the allegations in the complaints — which have been pending in the US court for more than two years — are meritless”.

The bank pointed out that it was contesting the allegations “fully and vigorously” and “the public record is clear that HBL is unwavering in its commitment to combating the financing of terrorism”.

“HBL’s extensive global implementation of anti-money laundering and counterterrorism financing compliance controls is well documented and has been highly successful and lauded by regulators around the world,” the bank said.

The bank said that its preliminary motion was successful in two respects: “The court dismissed the primary liability claims and narrowed the case substantially. The court also stated that the secondary liability claims will be evaluated for dismissal upon following due legal proceedings.”

It pointed out that no judgment was passed by the court on the matter, instead the “court specifically invited HBL to renew its motion to dismiss all remaining claims for lack of jurisdiction after the parties have exchanged certain factual information concerning jurisdiction.”

The statement showed that HBL “proactively initiated” a business transformation programme in early 2018 around its control and compliance processes and systems to adhere to international standards.

The bank said that it has “made investments in management time and resources to further strengthen its AML [anti-money laundering] and CFT [counterterrorism financing] protocols by partnering with global experts in this field”.

Published in Dawn, September 30th, 2022