A recent decision by the US Court of Appeals Second Circuit has reaffirmed the dismissal of a lawsuit in which US service members and civilians accused three prominent banks of indirectly funding terrorist activities in Afghanistan. The ruling, delivered on Monday, found that the plaintiffs could not sufficiently prove that Deutsche Bank, Standard Chartered Bank, and Danske Bank had engaged in conscious and culpable participation in terrorism under the Justice Against Sponsors of Terrorism Act (JASTA).

The court emphasized that the provision of “routine” banking services, even if negligent, does not meet the threshold of liability established by the Supreme Court in the 2023 Twitter, Inc. v. Taamneh decision. This landmark ruling clarified that liability under JASTA requires active and intentional support for terrorist activities, a standard not met by the defendants according to the appellate court.

The plaintiffs, who were either injured or lost family members in terrorist attacks between 2011 and 2016, had argued that the banks facilitated transactions for entities such as fertilizer companies, whose products were allegedly used in making improvised explosive devices. These explosive materials purportedly supported groups like Al-Qaeda, the Taliban, and the Haqqani Network, collectively termed “the Syndicate” in the lawsuit.

This lawsuit was initially brought under the Anti-Terrorism Act (ATA), which allows U.S. nationals affected by international terrorism to seek treble damages. It hinges on proving that defendants "aid and abet" terrorism, a claim that the court found unsubstantiated in this case due to a lack of direct intent to support terrorist activities.

Monday’s decision aligns with a series of similar judgments in recent years where the Second Circuit has shown judicial caution against extending secondary liability to financial institutions without concrete evidence of intentional misconduct. Notably, the court previously dismissed cases against the Hongkong and Shanghai Banking Corporation (HSBC) in 2023 and 2019, where allegations of conspiring with Iranian groups and providing services to entities linked to terrorism were also found insufficient.

This ruling underscores the challenges victims face in holding financial institutions accountable under JASTA and the ATA without clear and direct evidence of banks' intent to support or facilitate terrorist activities.