By Jonathan Stempel
(Reuters) – A divided U.S. appeals court on Tuesday said HSBC Holdings Plc was not liable to the families of two American contractors killed in an al-Qaeda suicide bombing of a CIA base in Afghanistan, after the bank allegedly evaded U.S. sanctions targeting sponsors of terrorism.
Dane Paresi and Jeremy Wise were among nine killed when Humam Khalil al-Balawi, a doctor, blew himself up by detonating hidden explosives at Camp Chapman on Dec. 30, 2009.
Their families accused HSBC of violating federal anti-terrorism laws through its dealings with Iran’s state-controlled Bank Melli and Bank Saderat and Saudi Arabia’s Al Rajhi Bank, each with alleged financial ties to al-Qaeda or other U.S.-designated terrorist groups.
But in a 2-1 decision, the D.C. Circuit Court of Appeals said the families did not plausibly allege that HSBC aided and abetted al-Qaeda terrorism, or was “generally aware” it played a role, through its years of dealings with intermediary banks.
“A lengthy financial relationship does not terrorism assistance make,” Circuit Judge Neomi Rao wrote for the majority.
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Rao also upheld the dismissal of claims against foreign-based HSBC entities, including the parent, saying the court lacked jurisdiction.
The decision followed last month’s U.S. Federal Reserve termination of a decade-old HSBC enforcement order.
That order was imposed when the bank paid a $1.92 billion fine to resolve a related U.S. Department of Justice criminal probe into alleged violations of sanctions and anti-money laundering rules.
Circuit Judge Robert Wilkins dissented from Tuesday’s decision, saying he would have allowed the aiding-and-abetting claim and found jurisdiction over the foreign defendants.
Randy Singer, a lawyer for the plaintiffs, said they plan to ask the full D.C. Circuit to reconsider the decision.
“As [Judge Wilkins] noted, dismissing this case frustrates the intent of Congress in passing the Anti-Terrorism Act and deprives these plaintiffs of their rightful opportunity to prove their well-pleaded allegations in court,” he said.
HSBC and its lawyers did not immediately respond to requests for comment.
The case is Bernhardt et al v Islamic Republic of Iran et al, D.C. Circuit Court of Appeals, No. 21-7018.
(Reporting by Jonathan Stempel in New York; Editing by Bernadette Baum)
