Arab Bank Case Sets Limited Precedent

[Arab Bank Headquarters in Amman, Jordan. Image by Wikimedia Commons User Jean Pierre X.] [Arab Bank Headquarters in Amman, Jordan. Image by Wikimedia Commons User Jean Pierre X.]

Arab Bank Case Sets Limited Precedent

By : Noura Erakat

On Monday September 22, 2014, a jury in the US District Court of Brooklyn found that the Arab Bank is liable for financing terrorism. This is the first jury trial to find a bank liable for financing terrorism under the 1990 Anti-Terrorism Act (ATA). The Arab Bank contends that the case was riddled with errors that should be rectified upon appeal before the Second Circuit. The Central Bank of Jordan has come out in support of the Bank, whose earnings constitute a quarter of the country’s stock market portfolio.

The decision, dubbed as a “trial against Hamas,” has been welcomed by some Palestine advocates. They are hopeful that this means, Israeli or US banks can be sued for facilitating the expansion of illegal Israeli settlements in the West Bank. That, however, is just not possible for two reasons. First, US federal courts have demonstrated an unwillingness to challenge Israeli policies, preferring to punt those questions to the Executive Branch instead. Second, it is a legislative invention, namely the ATA, that has made this case possible. Together, executive shielding of Israeli actions from judicial review and legislative endorsement of suits against Arab defendants, makes similar suit challenging Israel’s settlement policies very unlikely.

The U.S. federal court system has consistently invoked the political question doctrine toshield individuals connected to the Israeli government. The doctrine prevents the U.S. federal court system from adjudicating an issue that the U.S. Constitution textually commits to another branch of government. Since the Constitution commits foreign relations to the executive and legislative branches, the judicial branch may reject a claim as in-actionable by invoking the political question doctrine.

In 2005, Palestinian bystanders injured and killed during an operation intended to kill a Hamas leader in the Gaza Strip brought a lawsuit under the Alien Tort Statute (ATS) against Abraham Dichter, the former director of Israel’s General Security Services responsible for the operation. The plaintiffs in Matar v. Dichter, 563 F.3d 9, 11 (2d Cir. 2009) claimed that the targeted killing was extrajudicial, prohibited by the Torture Victims Protection Act (TVPA), and actionable in U.S. courts under the ATS. The Second Circuit dismissed the case for raising a political question. It characterized Dichter’s military actions as part of Israel’s foreign policy and therefore non-justiciable. The Department of State (DOS) submitted a Statement of Interest to the Court urging it to not hear the case. Israel’s Ambassador to the US at the time also submitted a letter claiming that Dichter’s actions constitute official Israeli policy. These letters had considerable influence on the panel.

In Belhas v. Ya’alon, 515 F.3d 1279, 1282 (D.C. Cir. 2008), Lebanese citizens – who were injured and killed when Israel shelled a United Nations Interim Forces in Lebanon (UNIFIL) compound – sued Moshe Ya’alon, head of the Israeli Army Intelligence during the time of the shelling. The DC District Court dismissed the case for being barred by the Foreign Sovereign Immunities Act (FSIA), which prohibits suit against a foreign country in US courts.

The claims were never heard on their merits.


 

In contrast, Palestinians and Arabs, more broadly, have been successfully sued in US federal courts without hindrance. Aside from the 1984 case Tel Oren v. Arab Libyan Republic, 726 F.2d 774, 795 (D.C. Cir. 1984) Palestinian defendants have been found liable in Biton v. Palestinian Self-Gov’t Auth., 310 F. Supp. 2d 172 (D.D.C. 2004);Klinghoffer v. Lauro, 937 F.2d 44 (2d Cir. 1991); Almog v. Arab Bank, 471 F. Supp. 2d 257 (E.D.N.Y. 2007); Knox v. Palestine Liberation Org., 306 F.Supp. 2d 424 (S.D.N.Y. 2004); Ungar v. Palestine Liberation Org., 402 F.3d 274 (1st Cir. 2005) among others. Despite emerging from the same political context that US federal courts found constituted a political question in Matar and Belhas, federal courts did not dismiss the suits against Palestinian defendants on jurisdictional grounds. Also, because the US has not recognized Palestine as a state, the courts also found that the cases are not barred by the FSIA.

The distinction in the two sets of cases is explained by executive and legislative action.

Congress and previous US Administrations had codified Palestinians as terrorists as early as 1987 (22 U.S.C §5201(b) (1987)). More recently, Congress legislated the Palestinian Anti-Terrorism Act (Palestinian ATA). The bill deems the West Bank and the Gaza Strip as terrorist havens, prohibits funding to Palestinian entities located therein, and prohibits funding to the Palestinian Authority. In this instance, the executive and the legislature have already determined the status of Palestinian groups as terrorist ones relieving the judiciary of that determination.

Moreover, the 1990 ATA provides US nationals with civil remedies and criminal penalties for acts of international terrorism that cause death or injury to a claimant’s person, business, or property. Combined, the ATA and the codification of Palestinian entities as terrorist ones, rendered the political question irrelevant and guaranteed the success of suits alleging harm caused by “Palestinian terrorism.”

In Almog v. Arab Bank, PLC, 471 F. Supp. 2d 257, 295 (E.D.N.Y. 2007), the defendants raised the political question doctrine during oral arguments. Ironically, the court held that a politically charged context does not transform the issue into a nonjusticiable one; “[T]he doctrine is one of ‘political questions’ not of ‘political cases.’” That same context however, is what impeded claims against Israeli officials in both Matar & Belhas. Not because of the politically charged context but because the US executive preferred to shield Israel from suit.

Lawsuits against banks that transfer funds to settlements would likely be dismissed under the political question doctrine. While successive US Administrations have admonished settlements as undermining the peace process they have shielded Israel from external scrutiny. In February 2010, for example, the Obama Administration vetoed a UNSC resolution mirroring the US’s language and policy on Israeli settlements. The Administration explained that it preferred to resolve the issue politically. It would likely affirm that position within US federal courts as well by submitting a SOI as did the Bush Administration in Belhas and Matar. Finally, and significantly, the ATA would not govern the claims against settlement financiers or banks.

To resolve the issue of funding for settlements, advocates will have to mount a regulatory challenge within the IRS to contest the non-profit, or c3, status of the organizations that fundraise between $7-15 million USD annually in the form of tax-deductible donations.

[This article was originally published by IntLawGrrls.]

 

 

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The Universal Periodic Review (UPR) is a unique mechanism that intends to review the behavior of states without distinction. The UN General Assembly established it in 2006 as part of the functions of the Human Rights Council. It is a state-driven process to comprehensively assess a state`s compliance with human rights law. The Human Rights Council is to hold three two-week sessions each year during which time they review the files of sixteen member states. Accordingly each state will undergo the review every three years. As of 2011, all 193 UN member states had undergone a review.

The Human Rights Council conducted Israel`s UPR in 2009.  In response to the findings, Israel`s ambassador to the UN explained that it took the Review process "very seriously" because it is "an opportunity for genuine introspection, and frank discussion within the Israeli system" 

Israel`s second UPR is scheduled to take place in 2013. A coalition of Palestinian human rights organizations submitted their concise report on Israel`s violations between 2009 and 2012.  This document will not be read, however, because Israel is boycotting the UPR, citing bias.  In May 2012, Israel described the Human Rights Council as “a political tool and convenient platform, cynically used to advance certain political aims, to bash and demonize Israel.”

Israel`s condemnation of the Human Rights Council followed the body`s initiation of a fact-finding mission to investigate the impact of settlements in the Occupied Palestinian Territory. Today, the Council released its report at a press conference in Geneva. It states that Isreal must cease all of its settlement activity  "without preconditions" and  "must immediately initiate a process of withdrawal of all settlers", or face prosecution before the International Criminal Court. Sources in Geneva tell me that Israel`s threats of boycott aimed to derail the Council`s fact-finding mission`s report. Failing to do that, Israel unilaterally withdrew from its Universal Periodic Review all together.

This is not Israel`s first attack on the UN. It has cited bias in the past in response to the UN`s critique of its human rights violations, specifically after the World Conference Against Racism (2001); the International Court of Justice proceedings on the route of the Separation Barrier (2004); denial of entry to Special Rapporteur to the OPT, Richard Falk (2008); and its refusal to cooperate with the Human Rights Council`s fact-finding delegation to Gaza in the aftermath of Operation Cast Lead (2009). 

Israel is unique for its boycott, which evidences the tenuous nature of the voluntary compliance process. In fact, human rights advocates and governement officials worry that Israel will open the door to non-cooperation by other states. The battle for accountability continues even in the UN. Despite its acceptance of international law & human rights norms, even within the multilateral human rights body, the last word on human rights matters is political.