HBL says will contest allegations in terror-financing case in US

Habib Bank Ltd (HBL) faces secondary liability in a case in the United States after it 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, reported Bloomberg on Thursday.

HBL, the largest commercial bank in Pakistan, faces the secondary liability 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,” Bloomberg quoted Judge Lorna G. Schofield as saying Wednesday.

The report, quoting Judge Schofield, said that the plaintiffs in the three consolidated cases sufficiently allege that the attacks were planned or authorized by an organization designated under the Immigration and Nationality Act as a Foreign Terrorist Organization, including al-Qaeda or one of the “syndicate FTOs,” which include Lashkar-e-Taiba, Jaish-e-Mohammed and its alter ego AlRehmat Trust, the Afghan Taliban, including the Haqqani Network, and the Pakistani Taliban.

And the plaintiffs sufficiently allege that the bank knew its customers were “integral to al-Qaeda’s overall campaign of terrorism, carried out directly and by proxy,” which is sufficient to allege general awareness, added the report.

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, Schofield, of the US District Court for the Southern District of New York, was further quoted as saying.

The allegations 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 U.S.,” are sufficient to show that Habib joined in a conspiracy to commit the attacks, Schofield added.

Schofield, however, dismissed the plaintiffs’ claims of primary liability because none of the alleged banking services provided by Habib “were themselves acts of international terrorism”, the report added.

HBL responds

In response to the development, HBL said it is aware of the news item published by Bloomberg. Its share price plummeted by Rs6.11, the maximum, on Thursday to close at Rs75.36.

"The allegations in the complaints are meritless, and HBL is contesting them fully and vigorously," it said in a message sent to Business Recorder after market closed on Thursday. "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."

HBL said its motion was successful in two respects: the Court dismissed the primary liability claim and narrowed the case substantially.

"The court also stated secondary liabilities will be evaluated following due legal proceedings and no judgement was passed by the court on this matter."

HBL said it proactively initiated a business transformation programme, in early 2018, around its control and compliance processes and systems to adhere to international standards.

"HBL has made investments in management time and resources to strengthen its AML and CFT protocols by partnering with global experts in this field. The Bank seeks to adhere to the highest standards of Compliance with international and country laws and regulations."

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