On July 21, 2025, in Ashley v. Deutsche Bank, the Second Circuit affirmed the dismissal of a complaint brought under the Justice Against Sponsors of Terrorism Act (“JASTA”) against three banks. The decision applies the JASTA aiding and abetting standard from the Supreme Court’s recent decision in Twitter v. Taamneh, 598 U.S. 471 (2023), and offers guidance in this evolving area of the law. The decision insulates financial institutions performing normal banking functions from liability even when they know that their services are ultimately being used for improper purposes.
Relevant Facts and Causes of Action
Plaintiffs brought two JASTA claims against Standard Chartered Bank (“SCB”), Deutsche Bank, and Danske Bank for aiding and abetting terrorist attacks in Afghanistan.
Plaintiffs alleged that SCB had provided banking services to two Pakistani fertilizer companies whose fertilizer became the main ingredient in improvised explosive devices, or IEDs. Notably, the U.S. military asked SCB to stop its banking support for the manufacturers, telling SCB that without its support, the companies could not maintain their manufacturing at the scale necessary to sustain the terrorists’ bombing campaign. Despite such notice, SCB declined to stop providing banking services to the fertilizer manufacturers. Plaintiffs also alleged that SCB helped launder over $5,000,000; Deutsche Bank set up a money laundering operation that benefitted the terrorists’ drug trade and money laundering; and Danske Bank operated the “Global Laundromat” in Estonia, through which funds flowed to and from terrorist fronts. Finally, Plaintiffs alleged that the banks facilitated tax fraud schemes, which enabled funds to reach the terrorists.
Plaintiffs’ alleged more broadly that the banks “engaged in a pattern of violent ‘racketeering’ activities designed to remove Americans from Afghanistan,” and “aiding a group of terrorists in their nearly decades-long racketeering activities, as opposed to aiding a particular terrorist attack” (emphasis in original).
Key Holdings
The court concluded that Plaintiffs failed to “persuasively” tie their “theories to the terrorist attacks” at issue.
Fertilizer Allegations: The court held that, while SCB was generally aware that its “banking services would play a role (albeit indirectly)” in the bombings, SCB did not “knowingly and substantially” assist the attacks. The court explained that Plaintiffs could not hold SCB liable for “its refusal to stop providing routine banking services” to the fertilizer manufacturers, explaining that “knowledge of one’s role in terrorist activities by itself is insufficient.” The court noted that there were no allegations that SCB directly aided the bombings or that SCB helped downstream, that the US military asked for the operation to be shut down, that SCB violated sanctions to help the fertilizer manufacturers, or that SCB’s customers were themselves direct terrorists. The court opined that SCB could be liable if it offered the fertilizer manufacturers special treatment compared to other clients.
Money Laundering Allegations: The court acknowledged that some of the money laundering activities must have gone to terrorist activities, it nevertheless concluded that the claim failed under JASTA because it did not satisfy foreseeability requirements.
Tax Fraud Allegations: The court also held that the banks were not generally aware that participation in VAT fraud transactions could support a claim that terrorist attacks were a foreseeable consequence of that participation.
Terrorist Campaign: Because both ATA and JASTA tie liability to a specific act of international terrorism, the court rejected Plaintiffs’ overarching claim that the banks aided and abetted the terrorist enterprise through a pattern of racketeering activities. While the court noted that systemic aid could support broader liability, it explained that the defendant can be liable only with respect to the injury-causing act, “not an overall group of activity that may or may not have led to the plaintiff’s particular injuries.”
Conclusion and Key Takeaways
The court’s analysis provides several key takeaways that likely will guide litigation in this area.
- Knowledge of one’s role in terrorist activities by itself is insufficient to allege an aiding-and-abetting claim.
- Offering a customer “special treatment” or the bank obtaining special benefits can support the knowing and substantial assistance element of liability.
- Passive nonfeasance, such as refusing to impose constraints on one party based on the actions of downstream third parties, is insufficient for liability.
The foregoing is for informational purposes only. It is not intended as legal advice and no attorney-client relationship is formed by the provision of this information.
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