Habib Bank Limited (HBL), the largest bank in Pakistan, is facing secondary liabilities in a terror funding action in the US where the plaintiffs claimed the bank participated in a plot to launch operations in Afghanistan between 2010 and 2019 that killed or injured 370 people.
A New York district court order issued on September 28 states that the bank is liable under the Justice Against Sponsors of Terrorism Act 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.”
HBL, however, claimed in a statement released that the accusations were “meritless” and that the bank was fiercely and fully disputing them.
The bank’s extensive global implementation of anti-money laundering compliance controls has been well documented and has been praised by regulators all over the world, according to the statement. “The public record is clear that HBL is unwavering in its commitment to combating the financing of terrorism,” it said.
The plaintiffs claimed that the attacks were planned, approved, and carried out by al-Qaeda, sometimes in collaboration with one or more other organizations, including Lashkar-e-Taiba, Jaish-e-Mohammed, the Afghan Taliban, including the Haqqani Network, and the Tehreek-e-Taliban Pakistan.?
Judge Lorna G. Schofield stated that HBL “engaged in tactics, such as ‘wire-stripping,’ that shield the identities of parties to transactions and placed terrorists or those linked to terrorists on a ‘whitelist’ or ‘good guy list’ of people ostensibly pre-cleared for reduced scrutiny of their transactions.”
According to the judgment, the plaintiffs have provided enough evidence for the bank to be accused of using its New York branch “to support [al- Qaeda’s] terrorist purposes.”
“The accusations raise a plausible conclusion that defendant knew its clients were vital to al-Qaeda’s terrorism operation, carried out both directly and through proxies. That’s enough to make the general awareness claim.
According to the charges, the defendant allegedly took intentional actions to assist clients in evading foreign sanctions regimes and as a result exposed himself to commercial risk, which finally resulted in his deportation from the US. Those accusations are adequate, according to the order.
The allegations, according to Judge Schofield, are sufficient to demonstrate that HBL “engaged in a conspiracy to commit the attacks.” She rejected the plaintiffs’ primary responsibility allegations, nonetheless, on the grounds that none of the allegedly rendered banking services by HBL “were themselves acts of international terrorism.”
HBL claimed that their application was successful in two ways: the court dismissed the main liability claim and significantly reduced the scope of the action.
“The court also indicated secondary obligations will be assessed following appropriate legal proceedings and no judgment was given by the court on this matter.” The statement said.