Congress Acts to Hold Terrorist-Funding Banks Responsible
“Anti-Terrorism Clarification Act of 2018” closes legal loophole being used to avoid paying victims

October 4, 2018
Eric Sapp, / 703-863-6403

WASHINGTON, DC–Last night, President Trump signed “The Antiterrorism Clarification Act of 2018” into law after it passed both the House by unanimous consent and Senate by a voice vote in a rare act of Congressional unity. The new law closes an unintended loophole in the Antiterrorism Act of 1992. Foreign banks that had been caught funding State Sponsors of terrorism, such as Iran, were seeking to use the loophole to escape paying claims to Gold Star families, veterans and American civilians harmed in terrorist attacks directed and funded by Iran with US dollars illegally provided by a dozen foreign banks.

“This is a big win for American victims of past terrorist attacks and will save lives in the future by stemming the flow of funding to terrorists,” said Sene Polu, Sergeant First Class (USA Ret.), who was injured in a terrorist attack while serving in Iraq. “The bipartisan support for this bill closes a significant loophole that banks were seeking to use to escape justice for their actions. It sends a clear message that in the future those who fund terrorism and states that sponsor terrorists will be held accountable.” 

Recent court filings have demonstrated that over half of U.S. casualties in Iraq can be tied to illegal activities of foreign banks that hid funding transfers between Iran and the terrorists.  Congress passed the Antiterrorism Act of 1992 to hold those who directly or indirectly illegally finance terrorists accountable. Banks that have been caught funding Iran and Iranian banks designated as conduits to terrorists have sought to escape paying claims to Americans harmed by these acts of terror.  The Banks have argued that acts by terrorists such as Hezbollah and Al Qaeda using military-style weapons were not “acts of terrorism,” but rather "legitimate acts of war," and thereby escape liability for profiting from conspiring with Iran to violate US law.  

The “Anti-Terrorism Clarification Act of 2018” clarifies Congress’ original intent that it is the status of the group carrying out the attack—rather than the weapon type used—that determines whether an “act of war” defense is permissible.  Blowing up a café does not somehow become a legitimate act of war simply because a terrorist uses a grenade instead of a backpack full of explosives.  Congress is now on record with a clear statement that American service members have the same protections under the Anti-Terrorism Act as all American citizens, and those conspiring with known rogue states funding the terrorists and targeting Americans will be forced to face victims in court.

“Thanks to the special attention by Congressmen Goodlatte and Nadler, Senators Grassley and Nelson, as well as the twenty Congressional sponsors for shepherding this bi-partisan bill forward. Congress has clarified with a clear and unanimous voice that no foreign bank or multinational corporation can profit from funding terrorists and Iran,” said Gavi Mairone, lead counsel in lawsuits against eight international banking groups (O’Sullivan et al. v. Deutsche Bank et al.) and Iran and its central bank (Holladay et al. v Iran et al.; Hartwick et al. v. Iran et al.). “Nothing can undo the damage of past terrorist attacks, but laws like the one signed today make justice for victims more likely and make it that much harder for terrorists to secure funding in the future.”

Over 50,000 veterans and Gold Star families rallied around a statement of support for this legislation, which was ultimately passed through committee and both the House and Senate.