Abdullah Bozkurt/Stockholm
A US judge has ruled to revive a lawsuit against Turkish Islamic bank Kuveyt Türk Katılım Bankası A.Ş. over alleged terrorism charges related to its support for the Palestinian jihadist group Hamas, signaling potential legal troubles for the Recep Tayyip Erdogan government, which regulates the bank and holds a significant share in its portfolio.
Brian M. Cogan, a US District judge for the Eastern District of New York, ruled on January 15 that the plaintiffs should be allowed to gather evidence regarding the bank’s connections to terrorist activities, vacating the prior dismissal ruling.
The plaintiffs in the case are the estates, survivors and heirs of victims killed in terrorist attacks in the West Bank in 2015 and 2018. They allege that Kuveyt Türk knowingly provided substantial assistance to Hamas by maintaining bank accounts for entities and individuals closely linked to the terrorist organization and facilitating Eurodollar transactions that required correspondent banking in the US. As a result, they contend that the Turkish bank violated US laws, including the Anti-Terrorism Act (ATA) and the Justice Against State Sponsors of Terrorism Act (JASTA).
Among the entities named in the lawsuit is the Foundation for Human Rights and Freedoms and Humanitarian Relief (IHH), an organization that works closely with the Turkish intelligence agency (Milli İstihbarat Teşkilatı, MIT) and is linked to radical jihadist groups, including al-Qaeda and Hamas.
The IHH raises significant funding for Hamas, primarily in Turkey, and provides logistical support for the militant organization. It is a member of the Union of Good, which has been designated by the US Treasury Department as a Specially Designated Global Terrorist (SDGT) organization since 2008.
A US court ruling has revived a lawsuit against Turkish bank Kuveyt Türk Katılım Bankası:
US_cout_ruling_against_Kuveyt_Turk
The IHH, with open support from the Erdogan government, has been active in 123 countries worldwide and boasts nearly 100,000 volunteers. Last year the organization allocated a significant portion of its 1.2 billion Turkish lira budget to countries such as Syria, Afghanistan, Somalia, Palestine, Pakistan, Yemen, Sudan, Niger and Bangladesh, where the funds are suspected to have been directed toward radical groups.
According to a 2016 assessment presented during a Turkish court hearing by Ali Fuat Yılmazer, the former head of the police intelligence section specializing in radical religious groups, “The IHH campaigns are designed to provide assistance to jihadists engaged in terrorism around the world and supply medical aid, funding, logistics and human resources for jihadists.” Yılmazer faced repercussions from the Erdogan government for investigating the IHH and other radical Islamist organizations in Turkey; he was dismissed from his position and later imprisoned on trumped-up charges.
The IHH has long been identified by Russia as an organization involved in smuggling arms to jihadist groups in Syria, according to intelligence documents submitted to the UN Security Council on February 10, 2016. The Russian intelligence documents provided details, including the license plate numbers of trucks dispatched by the IHH that were loaded with arms and supplies destined for al-Qaeda-affiliated groups, including the Nusra Front.
The other entity named in the US lawsuit is the Islamic University of Gaza (IUG), identified as a significant institution for Hamas recruitment and operations. The IUG is described as a critical center for Hamas, serving as a recruitment hub for its military wing, the Qassam Brigades. The US Department of Justice has previously classified the IUG as part of Hamas’s infrastructure, and reports suggest that the university has been used for weapons storage and Hamas meetings.
Hamas operative Jihad Muhammad Shaker Yaghmour (also known as Cihat/Cihad Yağmur) is another target of the lawsuit. Yaghmour is a convicted murderer who was involved in the 1994 kidnapping and killing of an Israeli soldier. After being released in a Hamas-Israel prisoner exchange, he became a liaison between Hamas and Turkish authorities, attending high-level political meetings along with prominent Hamas leaders.
He heads an NGO called the Association for Jerusalem and Our History (Kudüs ve Tarihimiz Derneği in Turkish, KUTAD), conducting his activities under the guise of this organization. He receives funding from municipalities governed by Turkish President Erdogan’s ruling Justice and Development Party (AKP).
The US case has a complex procedural history. Initially, the court dismissed the lawsuit due to a lack of personal jurisdiction over Kuveyt Türk, meaning the court determined it did not have the authority to hear the case against the bank. Additionally, the court denied a motion for jurisdictional discovery, which would have allowed the plaintiffs to gather further evidence to support their claims.
However, the plaintiffs successfully filed a motion for reconsideration. The court vacated its prior dismissal and ruled that the plaintiffs should be allowed to gather evidence regarding the bank’s connections to the alleged terrorist activities.
The court’s recent ruling emphasizes the significance of the plaintiffs’ claims, suggesting that their allegations are substantial enough to warrant further investigation and a potential trial. This stage of the process will be crucial in determining whether the court ultimately has jurisdiction over the bank and if the case can proceed.
So far, the bank has claimed it had no direct involvement, was unaware of any ties and that none of its customers were sanctioned by the US, requesting the dismissal of the case. It argued that the complaint lacks sufficient factual allegations regarding Kuveyt Türk’s knowledge of any terrorist connections among its customers. The bank stated that the plaintiffs have not met the legal standards for proving that Kuveyt Türk provided substantial assistance to the terrorists involved in the attack and claimed that some of the plaintiffs are not US citizens, disqualifying them from joining the lawsuit under US law.
This case is notable not only for its specific allegations against Kuveyt Türk but also for its broader implications regarding the responsibilities of financial institutions operating in Turkey and other countries. It raises important questions about the extent to which foreign banks can be held liable under US law for facilitating financial transactions linked to terrorist organizations.
Text of the complaint filed against Kuveyt Türk in the US court:
complaint_against_Kuveyt_Turk
The lawsuit also poses challenges for the Erdogan government, which not only aided and abetted Hamas entities and operatives but also facilitated their financial and banking transactions in Turkey. What is more, the government has shielded Hamas-linked individuals and entities from any criminal or administrative investigations in Turkey.
Many Hamas figures, including some senior leaders, have been residing and operating in Turkey with the protection and support of the Erdogan government. Turkish intelligence agency MIT has provided protective details for some Hamas leaders and has played a role in establishing headquarters for Hamas leadership in Istanbul.
While some Hamas front companies have been sanctioned by the US, they continue to operate and access the Turkish financial and banking system without hindrance. Some Hamas officials even changed their names in Turkey after acquiring citizenship to conceal their identities.
The Turkish government has a direct stake in Kuveyt Türk through its official government agency, the Directorate General of Foundations (Vakıflar Genel Müdürlüğü), which owns 24.49 percent of the bank’s shares. This directorate is subordinate to the Ministry of Culture and Tourism in Erdogan’s cabinet. Other shareholders include Kuwait Finance House with 57.81 percent, the Islamic Development Bank with 8.36 percent and the Wafra International Investment Company with 8.36 percent.
The lawsuit against Kuveyt Türk represents a pivotal moment at the intersection of finance and counterterrorism efforts, highlighting the challenges of regulating and prosecuting entities that operate across international borders while supporting violent extremism.
