‘Banks are watching the first civil trial against a bank under the Anti-Terrorism Act with some trepidation. Opening arguments start in the United States District Court in Brooklyn on Thursday.
The lawsuit accuses Arab Bank of knowingly handling accounts and money for terrorists. Arab Bank says it checked its account holders against the appropriate lists of designated terrorists. The bank says it could not turn over important records the plaintiffs sought because of foreign-bank secrecy laws. But that is not an argument that the bank will be allowed to make to the jury.
If following standard compliance procedures means a bank can still be held liable if transactions get through in error, that would set a troubling precedent, the bank contends.’
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