More U.S. Companies Getting Ensnared By Terrorism Law

Companies that arguably would never expect it could find themselves having to defend a lawsuit under the Antiterrorism Act. Several large drug companies, for example, have been sued under the ATA by some veterans and relatives of service personnel killed in Iraq. The allegation: they had sold product to Iraq’s Ministry of Health and it was used to finance operations by the Mahdi Army Group. The ATA as originally formulated and passed in 1987 did not allow for third part liability, but its reach was significantly expanded in 2016, to embrace a “aiding and abetting,” with the passage of the Justice Against Sponsors of Terrorism Act. As a result, companies “now face a greater risk of liability for inadvertently providing material support in the form of money, goods, or services to FTO,” says this article from the Cadwalader law firm. “This risk is particularly significant for those entities doing business – even remotely over the internet – in countries or markets with a history of terrorist activity.”