NY Court of Appeals rules to apply Israeli law in case of Bank of China financing terror


Appeals court ruling in NY is seen as a victory for the families of terror victims who are suing the Bank of China.

Court acknowledges Israeli law as uniquely strict on indirect aid in financing terrorists.



The Shurat Hadin – Legal Action Center told The Jerusalem Post on late Thursday night that it had won a significant battle in its terror financing case (on behalf of 22 families) against the Bank of China by convincing the New York Appellate Division to apply Israeli law and keep the case in New York.

Chinese 100 yuan banknotes are seen in this picture illustration taken in Beijing July 11, 2013.

Chinese 100 yuan banknotes are seen in this picture illustration taken in Beijing July 11, 2013. – Photo: REUTERS/Jason Lee

The most dramatic aspect of the state appeals court decision was that it both reversed the lower New York court decision to apply New York law in the case in favor of Israeli law and it made this decision against recent precedents by the Federal Second Circuit Court.

The court also reaffirmed the lower court’s decision to keep the case in New York as opposed to moving it to China and rejected outright the Bank of China’s appeal to apply Chinese law instead of either Israeli or New York law.

The court itself recognized the decision as significant as Israeli law has a right to sue and receive damages for violation of specific statutes, including a uniquely Israeli statute which places wide liability on banks and others who even indirectly aid or facilitate terrorists financing.


New York law’s obligations on banks are more lenient regarding anything their clients may be involved in.

Certainly the entire case and chances of winning would have been radically different under Chinese law and in China than under Israeli law and in New York.

The victims and family members of victims of terror attacks perpetrated between 2004 and 2007 in Israel allege that starting in 2003, the Bank of China executed dozens of wire transfers for Hamas and Palestine Islamic Jihad totaling several million dollars.

The case is still far from trial or any sort of resolution, but unlike beating a regular motion to dismiss, where usually a plaintiff merely has to survive some small procedural hurdles which do not impact the case later, this decision, especially in applying Israeli law, gives the plaintiffs’ a significant advantage at all points of the case going forward as the framework will always be one applying greater liability against the Bank of China.

The development comes shortly after another major development, where according to an exclusive report in The Jerusalem Post, key former Israeli government witness Uzi Shaya had sent a letter out on the case that he was “inclined” to testify despite reports that China threatened to cancel Prime Minister Binyamin Netanyahu’s recent visit to China if Israel did not prevent Shaya from testifying.

Shurat Hadin had said that Shaya’s letter would indicate that he has faced potential opposition from the Israeli government about testifying, but that he believes he can testify anyway.

Despite that belief, Shaya explained to Shurat Hadin that he wished to give the government time to formulate an official position, particularly since the government might, in the end, endorse his testifying.

In July, the bank’s lawyers said that maybe the Israeli government was withholding Shaya’s testimony because they believed his testimony would be inaccurate – though the court appeared to reject this out of hand.

The significant question of whether Shaya will testify is being reviewed by the government, according to an official letter response to the court from July 12 by deputy director of the international department of the State Prosecutor’s office, Yitzhak Blum.

The court expressed some frustration that the letter did not give any deadline for an answer and indicated it would be responding to Mr. Blum’s letter by requesting a deadline, although there has been no reported progress on this issue to date.


View original Jerusalem Post publication at: http://www.jpost.com/International/NY-appeals-court-rules-to-apply-Israeli-law-in-Bank-of-China-terror-financing-case-326656