As the dust settles on a landmark ruling against Jordan-based Arab Bank, found liable for knowingly processing transactions of Hamas members and thereby supporting its attacks on civilians, legal experts have just begun to parse the implications for banks that do business in the volatile Middle East. But as the case heads toward appeal, the world’s financial institutions have been put on notice: Turn a blind eye to clients designated by the U.S. as "foreign terrorist organizations," as Arab Bank was accused of doing, and face the consequences.

Late last month, the jury in a class-action civil case filed by 297 relatives and representatives of American victims of Hamas suicide bombings in Israel found that Arab Bank, one of the region's largest financial institutions with over $40 billion in assets, had provided material support for the group — 10 years after the lead case, Linde et al. v. Arab Bank PLC, was filed.

Among other Hamas-related transactions that totaled about $100 million, Arab Bank processed a series of $5,300 payments to the families of suicide bombers from a Saudi-registered charity, the Saudi Committee.

The bank argued that it followed the rules under the Know Your Customer provision of the Patriot Act by running the individuals' names by the U.S. Treasury’s Office of Foreign Assets Control (OFAC) and other U.S. government blacklists. It only proceeded with the transactions after coming up with no matches, apparently because of misspellings in the English transliterations of their names.

But that wasn’t enough, the plaintiffs argued. According to Peter Raven-Hansen, one of the attorneys for the plaintiffs and a law professor at George Washington University, his team were able to convince the jury that the Hamas members in question — including spokesman Omar Hamdan — were high-profile enough that Arab Bank must have been willfully ignorant of their identities.

“Suppose Osama Bin Laden walked into a bank in November 2001 and asked to withdraw $100,000, and the teller says: ‘That’s Osama Bin Laden.’ But the manager says to run his name on the OFAC list and sees he isn’t there, so he tells the teller to proceed with the withdrawal,” Raven-Hansen said.

“The plaintiffs weren’t arguing that if Bin Laden’s driver comes in and no one has seen him before that the bank should be liable. The question was whether these guys were more like Bin Laden, or his driver,” he said.

The Arab Bank suit, and a series of others like it on dockets around the U.S., could have far-reaching implications for the region's economy if foreign banks and companies decide that doing business in the Middle East has become too risky.

The trend has already unnerved the region's banks, who worry their clients could be linked to any number of violent attacks on American civilians by myriad armed non-state actors and therefore subject to exorbitant penalties under U.S. law. At the same time, they cannot afford to cut lucrative ties with U.S. banks in order to dodge U.S. counterterror laws.

Arab Bank, along with the government of Jordan, where it is based, have suggested the U.S. is imposing too great a burden on banks and that similar rulings will put the Middle East’s very financial infrastructure in jeopardy. That plea caught the attention of both the Obama administration and the State Department, which recommended the case to the U.S. Supreme Court out of loyalty to Jordan, one of its closest allies in the region.

U.S. authorities have prosecuted banks that deal with drug cartels and other criminal networks, but the Arab Bank case, tried in a federal court in Brooklyn, marked the first time a bank has been held liable in a civil suit under the 1990 Anti-Terrorism Act, a broad statute that says banks are accountable if their services are demonstrated to be a “substantial contributor” to plaintiffs’ “reasonably foreseeable injuries.”