Additional areas of criminal and civil liability exposure relate to the anti-money laundering statutes. To the extent that any “purification” funds move from the financial institution to a charity and these funds are found to support the terrorist activities, there is the additional criminal exposure under Sections 2339(A) and (B). Both of these statutes forbid the provision of material support for terrorism. The distinction between the two statutes is important. Section 2339(A) requires a showing that the defendant provided support knowing its intended purposes. Under Section 2339(B), the defendant need only know of the status of the target organization as a terrorist organization and need not know or intend that the material support is going to support terrorism. The discussion above regarding corporate criminal exposure for the intent of the company’s agents quite obviously applies here as well and must be considered by legal counsel.
In addition to criminal exposure, to the extent that a U.S. financial institution can be criminally linked to terrorist organizations as a result of the “purification” funds or indeed via other “material support” relationships between the Shariah authorities and the terrorists, additional statutes provide civil exposure to victims of such violence, even if the violence occurs outside the jurisdiction of the U.S. The most important of these statutes is Title 18, Section 2333, which provides for civil remedies and treble damages for any U.S. national injured by terrorists. In several circuits, federal courts have allowed private rights of action under this statute against defendants who have “aided and abetted” the offending terrorists by violating Sections 2339(A) and (B).
Beyond the civil exposure in Section 2333, there is a strong argument to be made that the Alien Tort Statute (“ATS”) exposes companies linked criminally to terrorism to enormous civil liabilities. It is one thing to be sued by U.S. nationals for damages caused by terrorism; but the potential for mass litigation by foreigners for such damages is enormous. Once the criminal connection is made through the anti-money laundering or the material support of terrorism statutes, it is a certainty the plaintiffs’ bar would then artfully allege that terrorism is a violation of some norm of the law of nations that is “specific, universal, and obligatory” and that there is a proximate cause between the “material support of terrorism” alleged and the injuries suffered.
Another area of civil liability exposure related to the exogenous structure imposed by the need for Shariah authority boards arises under antitrust law. As noted above, at present approximately two dozen Shariah authorities monopolize the positions available on the Shariah authority boards of the major Shariah-compliant financial institutions worldwide. There has been a concerted effort among these Shariah authorities to impose universal standards to prevent materially divergent opinions. This effort has been spearheaded by the Accounting and Auditing Organization for Islamic Financial Institutions (“AAOIFI”) and the Islamic Financial Services Board (“IFSB”), the former of which seeks to establish accounting standards for the various transactional structures and the latter to set the standards by which Shariah authorities self-regulate and interact with the financial institutions which employ them.
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