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Nine banks win dismissal of Iran terrorism financing lawsuit

Damaged U.S. military vehicle in Iraq

(Reuters) — A U.S. judge has dismissed a lawsuit seeking to hold nine large European banks liable for allegedly providing banking services to Iran that enabled militants to conduct 55 attacks against U.S. armed forces in neighboring Iraq.

In a decision on Thursday, U.S. District Judge Laura Taylor Swain in Manhattan said the banks’ alleged misconduct was too far removed from the attacks, which occurred from 2003 to 2011, to support civil liability under federal anti-terrorism laws.

The U.S. Department of State has designated Iran a state sponsor of terrorism since 1984.

Barclays PLC, BNP Paribas SA, Commerzbank AG, Credit Agricole SA, Credit Suisse Group AG, Deutsche Bank AG, HSBC Holdings PLC, Royal Bank of Scotland Group PLC and Standard Chartered PLC had been sued by military personnel who survived the attacks, and relatives and estates of those killed.

The plaintiffs accused the banks in a 533-page complaint of concealing their work for Iran through such practices as altering wire transfers, and masking the identities of those transferring funds.

But the judge found the complaint “devoid” of allegations that the banks knew they were enabling attacks in Iraq linked to Hezbollah, al-Qaida and other groups that the U.S. government has designated as foreign terrorist organizations.

Judge Swain found no proof, as required under a 2013 decision from the federal appeals court in Manhattan, that the services were a substantial factor in the attacks, and that the plaintiffs’ injuries were a reasonably foreseeable consequence.

“The complaint does not allege plausibly that the provision of banking services, which are not inherently violent or dangerous, can be considered as acts dangerous to human life,” Judge Swain wrote.

In seeking a dismissal, the banks said attacks on U.S. soldiers, including during the Iraq War, were “abhorrent,” but that they committed none of the attacks in question and “did not support any terrorists.”

A lawyer for the plaintiffs did not immediately respond on Friday to requests for comment.

Iran’s Bank Saderat was also named as a defendant. It was declared in default last May because it did not respond to the November 2017 complaint.

The case is O’Sullivan et al. v. Deutsche Bank AG et al., U.S. District Court, Southern District of New York, No. 17-08709.

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