RBS 2014 Annual Report Download - page 109

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RBS – Interim Results 2015
Notes
16. Litigation, investigations and reviews (continued)
Weiss v. National Westminster Bank PLC
NatWest is defending a lawsuit filed by a number of United States nationals (or their estates, survivors, or
heirs) who were victims of terrorist attacks in Israel. The plaintiffs allege that NatWest is liable for damages
arising from those attacks pursuant to the US Antiterrorism Act because NatWest previously maintained
bank accounts and transferred funds for the Palestine Relief & Development Fund, an organisation which
plaintiffs allege solicited funds for Hamas, the alleged perpetrator of the attacks. On 28 March 2013, the trial
court (the United States District Court for the Eastern District of New York) granted summary judgment in
favour of NatWest on the issue of scienter, but on 22 September 2014, that summary judgment ruling was
vacated by the United States Court of Appeals for the Second Circuit. The appeals court returned the case to
the trial court for consideration of NatWest's other asserted grounds for summary judgment and, if
necessary, for trial.
Freeman v. HSBC Holdings PLC
On 10 November 2014, RBS N.V. and certain other financial institutions (HSBC, Barclays, Standard
Chartered, Credit Suisse, and Bank Saderat) were named as defendants in a complaint filed by a number of
United States nationals (or their estates, survivors, or heirs), most of whom are or were United States military
personnel, who were killed or injured in more than 70 attacks in Iraq between 2004 and 2011. The attacks
were allegedly perpetrated by Hezbollah and certain Iraqi terror cells allegedly funded by the Islamic
Republic of Iran. According to plaintiffs’ allegations, RBS N.V. and the other defendants are liable for
damages arising from the attacks because they allegedly conspired with Iran and certain Iranian banks to
assist Iran in transferring money to Hezbollah and the Iraqi terror cells, in violation of the US Antiterrorism
Act, by agreeing to engage in "stripping" of transactions initiated by the Iranian banks so that the Iranian
nexus to the transactions would not be detected. On 2 April 2015, the plaintiffs filed an amended complaint
adding Commerzbank as an additional defendant. On 29 May 2015, the defendants filed a motion to dismiss
the amended complaint in this matter.
Investigations and reviews
RBS’s businesses and financial condition can be affected by the fiscal or other policies and actions of
various governmental and regulatory authorities in the United Kingdom, the European Union (EU), the United
States and elsewhere. RBS has engaged, and will continue to engage, in discussions with relevant
governmental and regulatory authorities, including in the United Kingdom, the EU, the United States and
elsewhere, on an ongoing and regular basis regarding operational, systems and control evaluations and
issues including those related to compliance with applicable laws and regulations, including consumer
protection, business conduct, competition, anti-trust, anti-bribery, anti-money laundering and sanctions
regimes. It is possible that any matters discussed or identified may result in investigatory or other action
being taken by governmental and regulatory authorities, increased costs being incurred by RBS, remediation
of systems and controls, public or private censure, restriction of RBS’s business activities or fines. Any of the
events or circumstances mentioned below could have a material adverse effect on RBS, its business,
authorisations and licences, reputation, results of operations or the price of securities issued by it.
RBS is co-operating fully with the investigations and reviews described below.