Habib Bank Limited (HBL), Pakistan's largest multinational private sector bank ,is facing allegations in the US of facilitating terror financing by aiding al-Qaeda , media reports said.
According to the plaintiff, the lender aided and abetted al-Qaeda's terrorism and joined in a conspiracy to launch attacks that killed or injured 370 people in Afghanistan between 2010 and 2019, the Dawn reported.
Meanwhile, the bank said that it is "fully and vigorously" contesting the charges in a US court.
In its order issued on September 28, a New York district court said that the bank faces liabilities 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."
"The complaints allege that defendant 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. Those allegations are sufficient ...," the order added.
According to a report by The Express Tribune, about 370 individual complainants had demanded compensation from the Habib Bank.
As per media reports, the court had agreed to dismiss primary liability claims but denied the dismissal of secondary liability (where one party assumes legal responsibility for the actions of another party) claims against the bank.
Meanwhile, the HBL, while speaking to The Express Tribune, dismissed the charges as "meritless".
"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," an HBL statement read.
"The court also stated that secondary liabilities will be evaluated following due legal proceedings and no judgement was passed by the court on this matter," the bank told the Express Tribune.
This is not the first time that the bank has come under the lens for transactions relating to terror funding.
In 2017, the lender was ordered to shut down operations on US soil by New York State Department of Financial Services, besides being ordered to pay a fine of $225 million.
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As an expert in finance and banking with extensive knowledge in international financial regulations and compliance, I can provide insights into the complexities surrounding the allegations against Habib Bank Limited (HBL) and the legal implications it faces in the United States. My expertise is based on comprehensive studies, professional experience, and continuous engagement with the evolving landscape of global banking regulations.
The case involving HBL and allegations of terror financing demands a nuanced understanding of various legal and financial concepts. Let's break down the key components mentioned in the article:
Habib Bank Limited (HBL)
- Multinational Private Sector Bank: HBL is Pakistan's largest multinational private sector bank operating internationally.
Allegations and Legal Ramifications
- Terror Financing Allegations: Accusations suggest HBL facilitated terror financing by aiding al-Qaeda, implicating the bank in a conspiracy to support attacks resulting in casualties.
- Justice Against Sponsors of Terrorism Act (JASTA): The bank faces liabilities under JASTA for aiding and abetting international terrorism, as it knowingly provided substantial assistance or conspired with those involved in terrorist acts.
- Primary and Secondary Liability Claims: The court dismissed primary liability claims but upheld secondary liability claims, wherein one party assumes legal responsibility for the actions of another party.
- Previous Regulatory Actions: HBL had faced previous regulatory actions in 2017, leading to a shutdown of its operations on U.S. soil and a substantial fine due to concerns regarding its compliance with financial regulations.
HBL's Response and Defense
- Vigorous Defense: HBL asserts it is fully contesting the charges and deems them as meritless.
- Anti-Money Laundering (AML) Compliance Controls: The bank highlights its commitment to combatting terrorism financing and emphasizes the effectiveness of its global implementation of anti-money laundering compliance controls, which have been recognized and commended by regulators worldwide.
- Court Proceedings and Statements: HBL clarifies that the court has not passed judgment on the matter of secondary liabilities and that these will be evaluated in due legal proceedings.
Broader Context
- Regulatory Compliance and Global Operations: The case underscores the critical importance of strict adherence to international financial regulations, especially concerning combating money laundering and terrorist financing, for banks operating on a global scale.
This situation illuminates the intricate interplay between global banking operations, compliance with anti-terrorism financing regulations, legal complexities, and the reputational risks faced by financial institutions amidst such allegations.
For the most recent updates and in-depth coverage, credible financial news sources such as The Economic Times would provide valuable insights into ongoing developments in this case.
