Update from the Arab Bank

February 9, 2005

The Funding For Peace Coalition has previously noted reports accusing the Arab Bank as being one of the major conduits for laundering money. This includes foreign aid donations, designated for the Palestinians and which have been diverted for means of greed and violence.

It is no secret that the bank has close sympathies with the aims of the Palestinian leadership. One of the major shareholders is an established Palestinian family by the name of Shoman.

The recent allegations against the Arab Bank are now forcing this 75-year-old financial institution to close its doors in America, at least temporarily. New evidence is emerging, linking the bank to the murder of foreign citizens by suicide bombers and to the transfer of money to "charitable operations" belonging to terrorist groups.

What remains unclear is how much public money was transferred to the Bank by European governments. Neither has it been proved if all this money ever reached its designated purposes.

Interestingly, OLAF has not commented on these developments. The EU's official authority designed to fight fraud has already spent 2 years preparing a report on the diversion of European funding for the Palestinians. Nothing has materialized so far. Will this latest information only serve to embarrass their quiet work even further?

Here we offer 2 perspectives on the story - from a Middle Eastern and an American sources

Israelis vow action against Arab Bank


Wednesday 09 February 2005

Lawyers representing victims of bombings in Israel at a US court have threatened further action against the Jordan-based Arab Bank, despite the closure of its single American branch. The victims' group had filed a lawsuit in New York in December, accusing the Arab Bank of funding a "terrorist campaign of genocide" and demanding billions of dollars in compensation.

"They can run, but they can't hide," said Ron Motley, lead litigation counsel to more than 700 survivors and family members of those killed or maimed by bombings in Israel.

A similar lawsuit was filed by half a dozen other families in July. The lawsuits charged the bank with paying money to the families of Palestinian bombers, belonging to the resistance organisation Hamas.

A statement released by the Central Bank of Jordan on Tuesday said Arab Bank, one of the largest financial institutions in the Middle East, planned to shut down its New York branch.

The statement made no reference to lawsuits, saying only that "the climate of operating in the United States at present is not expedient with the bank's strategy and vision."

Media report

Last week, the Wall Street Journal reported that the bank was also being probed by US regulators for alleged large-scale violation of money-laundering laws in connection with transactions by Palestinian charities and other clients.

Arab Bank has always insisted that the allegations made in the lawsuits were "entirely false". "The bank has never and would never support terrorist organisations in any way," it said. Arab Bank has more than 400 branches and offices in 25 countries.

Lawsuits force Arab Bank to close branch



Tuesday, February 8, 2005

AMMAN, Jordan -- Jordan-based Arab Bank will close down its branch in New York, where it faces lawsuits alleging that it supported terrorism by funneling donations to Palestinian suicide bombers and their families.

The closure was announced in a statement Tuesday from the Central Bank of Jordan, which oversees the operations of banks in the kingdom. Arab Bank is Jordan's largest financial institution.

The bank is owned by the prominent Palestinian Shoman family, and its shareholders include the Saudi Oger Co., which is owned by former Lebanese Prime Minister Rafik Hariri. The statement, made available to The Associated Press, did not refer to the suits filed in a federal court in Brooklyn by different groups of victims of suicide bombings in Israel.

It said the closure, decided at an Arab Bank board meeting three days ago, was in line with the institution's "vision and strategy in the medium- and long-term to focus operations on the Arab region and Europe."

It added: "The climate of operating in the United States at present is not expedient with the bank's strategy and vision."

Arab Bank and Central Bank officials declined comment.

The statement said "serious discussions" were under way with unspecified "supervisory sides in New York and Washington" over the closure.

It stressed that the decision would have little effect on Arab Bank because its New York assets were less than 2 percent of the bank's global holdings.

Central Bank governor Umayya Toukan was quoted as saying he was informed about the closure, which he said would take place in an "organized manner with full transparency and in coordination with concerned supervisory sides in the United States."

He did not say when the closure would take place or how long it would take.

In his latest expression of support, he said Arab Bank has since its inception 75 years ago played "a unique role in the process of development on the national and regional levels." Last year, three different groups of suicide bombing victims in Israel and their families filed suits in a Brooklyn federal court against Arab Bank, alleging that the institution moved donations from Saudi Arabia to militant Palestinian groups, including Hamas and Islamic Jihad.

The bank has denied the allegations.

Arab Bank, which was founded in Jerusalem in 1930, has 30 branches across the Middle East, Europe, the United States, Australia and North Africa. Trading in its shares often leads the Amman Stock Exchange.

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