Supreme Court Affirms $655M Judgment on Banks’ Terror Funding Liability
Supreme Court upheld a $655.5M judgment against PLO and PA under the Anti-Terrorism Act.
Why it matters: Bank compliance and legal teams now have clearer standards for liability when handling terrorism-linked funds, improving risk management and legal certainty amid evolving jurisdiction rules.
- Second Circuit reinstated $655.5M judgment against PLO and Palestinian Authority on March 30, 2026.
- Supreme Court declined to pause the judgment on August 3, 2026, affirming the ruling under the Anti-Terrorism Act (ATA).
- ATA lets U.S. citizens sue foreign entities for terrorism-related harms caused by their actions or funding.
- 2019’s Promoting Security and Justice for Victims of Terrorism Act (PSJVTA) deems foreign entities to consent to U.S. jurisdiction if they engage in certain conduct after enactment.
The U.S. Supreme Court recently refused to block a $655.5 million judgment against the Palestine Liberation Organization (PLO) and the Palestinian Authority (PA). The decision reinforces legal accountability under the Anti-Terrorism Act (ATA), which allows U.S. citizens to hold foreign entities liable for terrorism-related damages.
This judgment follows the Second Circuit Court of Appeals’ reinstatement on March 30, 2026. The case stems from attacks in Jerusalem (2002-2004) causing 33 deaths and hundreds of injuries, with plaintiffs alleging the PLO and PA funded these acts.
The ruling is significant for banks and compliance teams because it clarifies the knowledge standard under the ATA. Specifically, it holds that institutions may be liable if they have enough information to be aware that funds could support terrorism. In legal terms, 'knowledge' means the bank must have actual awareness or deliberate avoidance of knowledge about terrorist links.
The Promoting Security and Justice for Victims of Terrorism Act of 2019 (PSJVTA) also plays a key role. It deems that foreign entities consent to personal jurisdiction in U.S. courts if they engage in specified actions after the law’s enactment—making it easier to sue foreign bodies over terrorism funding.
Although the PLO and PA warned that paying this large judgment might impact West Bank public services, courts emphasized the primacy of victim justice and the need for robust anti-terrorism financing controls. For banks, the decision signals higher scrutiny on compliance programs to ensure due diligence detects and prevents terrorism-related transactions.
This ruling therefore sharpens the legal landscape governing financial institutions’ exposure to terrorism funding liability, clarifying when knowledge of suspect activities triggers responsibility.
By the numbers:
- $655.5 million — judgment against the PLO and PA reinstated by Second Circuit
- 33 deaths — casualties from the attacks central to the litigation
- 2019 — year PSJVTA was enacted, establishing deemed jurisdiction consent
Yes, but: Some critics argue that judgments of this scale risk destabilizing regions by diverting funds from essential services, raising complex policy and diplomatic concerns.
What's next: Legal teams should monitor related litigation and evolving regulations that may further refine terrorism funding liability and compliance expectations.