Post by : Naveen Mittal

Standard Chartered Escapes Liability as U.S. Court Dismisses Terrorism Lawsuits

A federal court in Manhattan has dismissed two lawsuits brought against Standard Chartered Bank over allegations it indirectly supported terrorist groups. The lawsuits, filed by victims and families of attacks in Israel and Iraq between 2010 and 2019, claimed the bank’s financial dealings helped fuel militant organizations. The court, however, ruled that the allegations did not establish a strong enough connection between the bank’s actions and the attacks.

Allegations Under U.S. Anti-Terrorism Law

The plaintiffs relied on the Justice Against Sponsors of Terrorism Act (JASTA), which allows U.S. citizens to sue entities accused of supporting terrorism. They argued that Standard Chartered processed billions of dollars in transactions linked to Iran’s central bank and organizations connected to Hamas, Hezbollah, and the Palestinian Islamic Jihad. According to the claims, these financial flows indirectly funded attacks that harmed American and Israeli citizens.

Court’s Reasoning

U.S. District Judge Margaret Garnett found the lawsuits insufficient to move forward. She ruled that the plaintiffs failed to show that the bank knowingly and substantially assisted the militant groups. The judge emphasized that there were “too many steps” between the bank’s financial transactions and the actual terrorist attacks. Without a direct and plausible connection, the claims could not meet the legal threshold required under JASTA.

Bank’s Response

Standard Chartered has consistently denied supporting terrorism. The bank admitted that it had, in the past, done business with clients who later faced sanctions, but maintained that it never knowingly provided funds for violent activity. Following the dismissal, the ruling was seen as a significant legal victory for the bank, reinforcing its stance that it cannot be held responsible for the violent acts of third parties.

Broader Implications for Global Banks

The decision highlights the challenges of holding international financial institutions accountable under anti-terrorism laws. Plaintiffs often struggle to prove a direct link between global banking transactions and violent incidents. For banks, the ruling provides reassurance that dealing with sanctioned entities—while still risky—does not automatically translate into liability for terrorism.

What This Means Going Forward

For Standard Chartered, the dismissal closes a major legal chapter, though similar cases may still arise in the future. For victims of terrorism, the ruling underscores the difficulty of pursuing compensation through U.S. courts. The outcome also sets a precedent that will likely influence how other cases involving global banks and terrorism financing are evaluated in the years ahead.

Standard Chartered, U.S. lawsuits, terrorism financing, bank liability, JASTA, legal ruling