By Jonathan Stempel
NEW YORK (Reuters) – The family of an American who tragically lost his life when a Malaysian Airlines plane was tragically shot down over Ukraine in 2014 has been granted the unexpected opportunity to pursue legal action against Russia’s largest bank. This decision came following a ruling from a U.S. appeals court on Tuesday.
In a unanimous 3-0 decision, the 2nd U.S. Circuit Court of Appeals in Manhattan determined that the state-controlled Sberbank could not claim sovereign immunity. This ruling was based on accusations that Sberbank had allegedly utilized the U.S. banking system to facilitate money transfers to a group implicated in the downing of the ill-fated plane, which was reportedly carried out by the Russia-backed separatist group Donetsk People’s Republic.
A lawyer representing Sberbank in the United States did not offer immediate commentary following the court’s decision, and Sberbank itself was not reachable for comment during non-business hours in Moscow.
The legal action was initiated by the grieving family of Quinn Schansman, who was just 18 years old when he boarded Malaysian flight MH17 en route to Kuala Lumpur from Amsterdam on July 17, 2014, for what was supposed to be a joyful family vacation. Tragically, the flight was tragically shot down over territory controlled by the Donetsk People’s Republic in eastern Ukraine by a surface-to-air missile, resulting in the tragic loss of all 298 individuals on board.
Despite denial of involvement by Russia and the declaration of the DPR as a terrorist organization by Ukraine, along with sanctions imposed by the United States on the group, Schansman’s family moved forward with legal action against Sberbank, as well as another Russian bank and two U.S. money transfer companies in April 2019. They argued that these entities should be held accountable for conducting business with the DPR.
A year later, the Russian Ministry of Finance acquired a controlling stake in Sberbank from the country’s central bank.
In the recent ruling, Circuit Judge Joseph Bianco characterized Sberbank’s alleged involvement in money transfers as “quintessentially commercial activity,” leading to an exception to the protections outlined in the federal Foreign Sovereign Immunities Act (FSIA). Sberbank had contended that it should be granted immunity as a state agency or instrumentality, and also cited the Anti-Terrorism Act to support its claim of immunity regardless of its state control status.
However, Judge Bianco disagreed with Sberbank’s arguments. He emphasized that the FSIA governed sovereign immunity comprehensively in civil cases and asserted that the framework of the law was not overridden by the anti-terrorism legislation. Adopting Sberbank’s stance, according to the judge, would undermine Congress’ intent to provide civil litigants with the widest possible legal basis to pursue entities that materially support foreign groups engaged in terrorism against the United States.
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