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Introduction In 1983, 241 U.S. marines were killed after a terrorist bombing in Beirut, Lebanon. 1 Families of the victims of the attack filed suit against the Government of Iran in D.C. district court, alleging that the bombings were orchestrated by the Government of Iran as an act of statesponsored terrorism. 2 The court found the Government of Iran liable for the bombing and entered judgment for the victims in the amount of $2.7 billion.3 Although the judgment was significant, the victims have been unable to collect payment from the Government of Iran due to the lack of the Government of Iran’s attachable assets within U.S. jurisdiction. In an attempt to seek payment, the attorneys representing the families of the victims of the Beirut attack subpoenaed the Treasury Department to obtain any information regarding assets of the Government of Iran within U.S. jurisdiction. The Treasury Department’s information revealed that Clearstream Banking S.A. housed over $2 billion in the Government of Iran’s assets in a Citibank account in Manhattan. 4 In 2008, the victims’ attorneys commenced enforcement proceedings to obtain the Government of Iran’s Citibank funds in the Southern District of New York. 5 The court ordered Citibank to freeze the assets, and no further proceedings have commenced.6 Currently, victims of state-sponsored terrorism face numerous hurdles in actions seeking damages against a foreign sovereign. 7 Specifically, the Foreign Sovereign Immunities Act
See generally Peterson v. Islamic Republic of Iran, 264 F. Supp. 2d 46 (D.D.C. 2003) (determining whether Iran was responsible for the terrorist bombing). 2 Id. at 47-59. 3 Peterson v. Islamic Republic of Iran, 515 F. Supp. 2d 25, 44-45 (D.D.C. 2007). 4 See Jay Soloman, Deutsche Börse Unit Sued Over Alleged Iran Funds, WSJ.COM (Aug. 16, 2011), http://online.wsj.com/article/SB10001424053111904253204576510312688841494.html. 5 Id. 6 Id. 7 In re Islamic Republic of Iran Terrorism Litig., 659 F. Supp. 2d 31, 36 (D.D.C. 2009)
(FSIA) is the sole authority a plaintiff can utilize when seeking damages for a foreign sovereign’s state-sponsored terrorism.8 Furthermore, even after obtaining a judgment against a foreign sovereign, a plaintiff must undergo an enforcement proceeding to obtain payment.9 The enforcement proceeding, governed by the Terrorism Risk Insurance Act (TRIA), requires that a plaintiff identify the foreign sovereign’s available assets for attachment.10 However, identifying assets is problematic when the value of judgments obtained against a foreign sovereign exceeds the value of the foreign sovereign’s assets subject to U.S. jurisdiction. 11 Moreover, the Executive Branch has successfully argued that a plaintiff does not have the right to attach a foreign sovereign’s “blocked assets” held by the U.S. government and obtained through U.S. economic sanctions.12 Consequently, many terrorism victims remain uncompensated due to the unavailability of the Government of Iran’s attachable assets subject to U.S. jurisdiction.13
(explaining the specific hurdles plaintiffs face in collecting judgments against the Government of Iran). 8 28 U.S.C. § 1605A (2006). 9 28 U.S.C. § 1610. 10 Id. 11 See JENNIFER K. ELSEA, CONGRESSIONAL RESEARCH SERV., SUITS AGAINST TERRORIST STATES BY VICTIMS OF TERRORISM (2008), available at http://www.fas.org/sgp/crs/terror/RL31258.pdf. 12 See Weinstein v. Islamic Republic of Iran, 274 F. Supp. 2d 53, 56 (D.D.C. 2003) (holding that a foreign sovereign’s frozen assets held in the U.S. by the U.S. government are re-qualified as United States property, and cannot be accessed unless the U.S. explicitly waives its sovereign immunity). 13 Estate of Heiser v. Islamic Republic of Iran, 107 F. Supp. 2d 9, 13 (D.D.C. 2011). Compare OFFICE OF FOREIGN ASSETS CONTROL, U.S. DEP'T OF THE TREASURY, TERRORIST ASSETS REPORT 9 (2010), available at http://www.treasury.gov/resourcecenter/sanctions/Documents/tar2010.pdf (finding 48.7 million dollars of Iranian blocked funds held in the United States), with In re Islamic Republic of Iran Terrorism Litig., 659 F. Supp. 2d at 36 (noting that Iran is liable for more than nine billion dollars in the form of court judgments).
Non-Blocked Funds Relating to Residents and Entities of Countries Designated as State Sponsors of Terrorism (Amounts in millions of U.S. dollars) 1 Country 2010 2009 Source IRAN $58.0 $62.0 Treasury International Capital Reporting 2 System Survey of Foreign Holdings of U.S. Securities (Treasury International Capital Reporting System)3
Assets Relating to Iran SYRIA
Treasury International Capital Reporting
System In February 2012, the Senate Committee on Banking, Housing, and Urban Affairs $8.0 $8.0 Survey of Foreign Rights Act of 2012” (the introduced the “The Iran Sanctions, Accountability and Human Holdings of U.S. Securities Bill) to
“prevent Iran Relating $49.0 $155.0 Assets from acquiring or developing nuclear weapons . . . [and to prevent] its support for
(Treasury International Capital Reporting 4 System)
terrorist organizations and other activities aimed at undermining and destabilizing its neighbors
TOTAL $115.0 $225.0
1/ Thecountries . . for.” 14 are revised: the values values reported . 2009 Along with implementing 3 and 4 are now based on the and other 30, 2009, whereas those values reported last yearin footnotesvigorous bilateral for Juneannual survey for and multilateral the June were based on the annual survey 30, 2008; and values in the second row under Iran and the second row under Syria reflect revised data submitted by data reporters.
sanctions to liabilities to individuals and entities located in Iran/Syria reported by503 of the United States and by nonisolate Iran’s financial and energy sectors, section banks in the Bill attempts to 2/ Total
banking institutions in the United States as of September 30, 2009 and 2010.
strengthen the ability oflong-term securities held by individuals and entities located invictims of theU.S.-resident U.S. victims of terrorism, and specifically the Iran reported by Beirut 3/ Total United States
custodians and issuers as of June 30, 2009. 4/ Total United States long-term securities held by individuals and entities located in Syria reported by U.S.-resident custodians and issuers as of June 30, 2009.
S. 2101, 112th Cong. § 101(A), (C) (2012).
bombing, to enforce judgments against the Government of Iran.15 Section 503 grants plaintiffs a property interest in blocked assets of the Government of Iran, and preempts all inconsistent state and federal law so that such an interest exists even when assets are held at an intermediary bank.16 Although section 503 of the Bill is aimed to assist the Beirut bombing plaintiffs in obtaining payment, the section’s expansive definition of “blocked assets of the Government of Iran” could potentially apply to funds other than those currently held in Citibank.17 Furthermore, Executive Order 13,599, implemented on February 6, 2012, expands the category of “blocked assets” of the Government of Iran to include all Iranian financial institutions.18 In light of the vigorous sanctions implemented in Executive Order 13,599 and section 503 of the Bill, Iranian nationals attempting to transfer funds to U.S. persons for legitimate purposes understandably have concerns about the effects of the legislation; specifically if their assets will be blocked and subjected to attachment to pay victims of Iranian terrorism. I. a.
Analysis Blocked assets of Iranian nationals that come within U.S. jurisdiction will not be
Id. § 503; see Press Release, Senator Robert Menendez, Menendez Welcomes Obama’s Executive Order Blocking Iranian Assets (Feb. 6, 2012), http://menendez.senate.gov/newsroom/press/release/?id=96ca1211-f6cf-496a-b348b6e00208985d (“[the Bill] will ensure that victims of the 1983 Marine Corps Barracks bombing will finally see the justice they deserve and send a message to terrorist states that they can’t shelter their assets on American soil.”). 16 S. 2101, 112th Cong. § 503(a) (“The property interest of Iran in a funds transfer shall exist at any intermediary bank necessary to complete such funds transfer.”); Id. (“Notwithstanding any other provision of law, and preempting any inconsistent provision of State law, the property interest of Iran in a blocked asset shall include an interest in property of any nature whatsoever, direct or indirect, including any direct or indirect interest in securities or other financial assets immobilized or in any other manner held in book entry form and credited to a securities account in the United States and the proceeds thereof, or in any funds transfers held in a United States financial institution.”). 17 Id. § 503(f)(4). 18 Exec. Order No. 13599, 77 FR 6659 (Feb. 5, 2012) (emphasis added).
subject to attachment under the TRIA to satisfy judgments obtained by victims of Iranian state-sponsored terrorism. Even though section 503 of the Bill permits TRIA plaintiffs to attach “blocked assets” of the “Government of Iran,” a noncommercial personal remittance transfer from an Iranian national will not fall under the Bill’s definition of the “blocked assets” subject to attachment.19 However, even if such assets are “blocked assets” under the Bill, an Iranian national will generally not fall under the Bill’s definition of “the Government of Iran.” 20 Therefore, it is unlikely that a noncommercial personal remittance transferred by an Iranian national to a U.S. person will be vulnerable to attachment to satisfy judgments obtained by victims of Iranian statesponsored terrorism. The FSIA presumes that a foreign sovereign is immune from suit and judgment proof against suits filed in U.S. courts unless an exception under the Act applies.21 One such exception to the FSIA is the “terrorism exception,” which permits a claim against a foreign sovereign for damages if: (1) the foreign state was designated as a state sponsor of terrorism both at the time of the act and the time when the claim is filed; (2) the claimant is a national of the United States; and (3) the claimant has afforded the foreign state a reasonable opportunity to arbitrate the claim, provided that the act occurred in the foreign state against which the claim is brought.22 If all three elements are met, judgment can be entered against a foreign sovereign “in the same manner and to the same extent as a private individual under like circumstances.”23
Id. (providing an exception authorizing the transfer of funds from Iran pursuant to a license implemented by the authority granted in this order). 20 S. 2101, 112th Cong. § 503(f)(4) (defining “Iran” as the “Government of Iran, including the central bank or monetary authority of that Government and any agency or instrumentality of that Government”). 21 Id.; see Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 488-89 (1983). 22 28 U.S.C. § 1605A (2006). 23 28 U.S.C. § 1606; see also Verlinden B.V., 461 U.S. at 488-89.
Once a valid judgment has been entered against a foreign sovereign under the FSIA terrorism exception, property of that foreign sovereign is still immune from attachment except as provided in 28 U.S.C. §§ 1610 and 1611.24 One such method of attachment falls under 28 U.S.C. § 1610, which codifies the Terrorism Risk Insurance Act (TRIA). 25 The TRIA facilitates judgments obtained under the FSIA by granting subject-matter jurisdiction to courts for post judgment attachment proceedings of blocked funds not only of the terrorist party, but also by a terrorist party’s agencies and instrumentalities.26 Specifically, the TRIA provides: [I]n every case in which a person has obtained a judgment against a terrorist party on a claim based upon an act of terrorism, or for which a terrorist party is not immune under section 1605(a)(7) of title 28, United States Code, the blocked assets of that terrorist party (including the blocked assets of any agency or instrumentality of that terrorist party) shall be subject to execution or attachment in aid of execution in order to satisfy such judgment to the extent of any compensatory damages for which such terrorist party has been adjudged liable.27 Therefore, “property is attachable only in those cases in which (1) ‘a judgment has been obtained,’ (2) this judgment is ‘against a terrorist party,’ (3) the judgment is ‘on a claim based upon an act of terrorism’ or ‘for which a terrorist party is not immune’ under FSIA § 1605(a)(7), (4) the property in question consists of ‘blocked assets,’ and (5) these blocked assets are ‘of that terrorist party.’”28 In analyzing whether a noncommercial personal remittance transfer from Iran to the United States will be subject to attachment under the TRIA pursuant to section 503 of the Bill, it is assumed that a plaintiff has obtained a judgment against the Government of Iran under the
See Weinstein v. Republic of Iran, 609 F.3d 43, 48 (2d Cir. 2010). 28 U.S.C. § 1610. 26 Weinstein, 609 F.3d at 48 (allowing attachment of funds of an instrumentality even if the instrumentality is not itself named in the judgment). 27 28 U.S.C. § 1610. 28 Ruth Calderon-Cardona v. JP Morgan Chase, 2011 WL 6155987, at *8 (S.D.N.Y. Dec. 7, 2011).
FSIA. Furthermore, it is undisputed that a judgment against the Government of Iran is a judgment against a terrorist party. The TRIA defines a “terrorist party” as “ . . . a foreign state designated as a state sponsor of terrorism under section 6(j) of the Export Administration Act of 1979 . . . .”29 The Government of Iran is a “terrorist party” under the TRIA because the State Department designated Iran as a state sponsor of terrorism under section 6(j) of the Export Administration Act of 1979. 30 Therefore, it must be determined: 1) whether the transfer of noncommercial personal remittances are “blocked assets” under the TRIA; and 2) whether these blocked assets are property of “the Government of Iran.”31 In the instant case, a noncommercial personal remittance funds transfer from an Iranian national to a U.S. person will not be subjected to attachment under the TRIA and pursuant to section 503 of the Bill because the transferred funds are not “blocked assets” under the TRIA, and an Iranian national will most likely not fall under the definition of the “Government of Iran.” First, a noncommercial personal remittance transfer is not a “blocked asset” under the TRIA or section 503 because these types of transfers are not “blocked” pursuant to a General License B to Executive Order 13,599 issued by the Department of Treasury’s Office of Foreign Assets Control (OFAC). Second, even if the funds are considered “blocked assets,” an Iranian national will not generally satisfy the definition of “the Government of Iran” because the definition is limited to the Government, its instrumentalities or agencies, financial institutions, and persons labeled as “Specially Designated Nationals” by OFAC.32 Therefore, it is unlikely that an Iranian national’s noncommercial personal remittance transfer will be subjected to attachment under the
28 U.S.C. § 1610(d)(4) (2006). Owen v. Republic of Sudan, 2011 WL 5966900, at *3 (D.D.C. Nov. 28, 2011). 31 28 U.S.C. § 1610. 32 S. 2101, 112th Cong. § 503(f)(4) (defining “Iran” as “the Government of Iran, including the central bank or monetary authority of that Government and any agency or instrumentality of that Government”).
TRIA. i. A Noncommercial Personal Remittance Does Not Qualify as a “Blocked Asset” Under the TRIA or Section 503 of the Bill if the Transfer Satisfies the Conditions Provided in OFAC’s General License B.
Section 503 of the Bill, which preempts all inconsistent law, defines a “blocked asset” to mean “any asset seized or frozen under section 202 or 203 of the International Economic Powers Act (IEEPA) . . . .” 33 Section 202 or 203 of the IEEPA grants the President the authority to block transactions, freeze assets, and issue regulations to further the stated purpose in response to a threat against the United States.34 Thus, “assets seized or frozen under section 202 or 203 of the IEEPA” are assets in which the President has defined as “blocked” in response to a threat against the United States. President Obama recently issued Executive Order 13,599, pursuant to his authority granted by sections 202 or 203 of the IEEPA, which blocks all assets within U.S. jurisdiction and owned by the Government of Iran, its financial institutions, or individuals deemed to be controlled by or acting on behalf of any person whose assets are blocked under the Executive Order.35 However, section 4(a) of the Executive Order provides that “the prohibitions in section 1 of this order [blocking property of the Government of Iran and its financial institutions] apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into.” 36 Therefore, if a transfer is issued pursuant to a license, the assets will not be “blocked assets” pursuant to the Executive Order, and thus are not “blocked assets” seized or frozen pursuant to
S. 2101, 112th Cong. § 503(f)(1)(A). 50 U.S.C. § 1702 (2006). 35 Exec. Order No. 13599, 77 FR 6659 (Feb. 5, 2012) (“By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA).”). 36 Id. § 4(a) (emphasis added).
section 202 or 203 of the IEEPA.37 In the instant case, a noncommercial personal remittance transfer from an Iranian national to the United States is not a “blocked asset” because the transfer is pursuant to a license as authorized under Executive Order 13,599.38 Currently, OFAC has issued “General License B” pursuant to Executive Order 13,599, which authorizes “United States depository institutions and United States registered brokers or dealers in securities to. . . process transfers of funds to or from Iran or for or on behalf of an individual ordinarily resident in Iran who is not included within the term ‘Government of Iran,’ as defined in section 7(d) of the new Executive Order of February 5, 2012 . . . in cases in which the transfer involves a noncommercial, personal remittance . . . .”39 Thus, funds pursuant to a noncommercial personal remittance transfer will not fall under the definition of a “blocked assets” pursuant to the Executive Order because the transfer is pursuant to a license.40 Therefore, if such funds are not “blocked assets” pursuant to Executive Order 13599, then the assets are not “blocked assets” because the Bill requires that assets be “seized or frozen under . . . the [IEEPA].”41 ii. Even if an Iranian National’s Noncommercial Personal Remittance Transfers are “Blocked Assets” under the Bill, it is Unlikely an Iranian National will qualify as being the “Government of Iran.”
Section 503 of the Bill defines “Iran” as the “Government of Iran including the central bank or monetary authority of that Government and any agency or instrumentality of that
S. 2101, 112th Cong. § 503(f)(1)(A) (defining “blocked asset” to mean “any asset seized or frozen by the United States under . . . section 202 or 203 of the International Emergency Powers Act (50 U.S.C. 1701 and 1701).”). 38 Exec. Order No. 13599, 77 FR 6659 (Feb. 5, 2012) 39 OFAC Notice: Information Regarding General Licenses A and B Under the New Executive Order of February 5, 2012, 77 Fed. Reg. 7660 (Feb. 13, 2012). 40 Exec. Order No. 13599, 77 FR 6659 (Feb. 5, 2012). 41 S. 2101, 112th Cong. § 503(f)(1)(A).
Government.”42 Individuals cannot encompass “the central bank or monetary authority” or “any agency or instrumentality of” the Government of Iran;43 and individuals cannot fall under the broad umbrella definition of the “Government of Iran” unless it is shown that the individual is controlled by or is acting on behalf of the Government of Iran.44 Section 503 of the Bill does not specify if individuals, including Iranian nationals, are included in the definition of the “Government of Iran;” however, the Iranian Trade Regulations (ITR) are instructive.45 The ITR defines the “Government of Iran” to include individuals, but only if the individual “is, or has been, or to the extent that there is reasonable cause to believe that such person is, or has been . . . acting or purporting to act directly or indirectly on behalf of” the Government of Iran. 46 Persons who are acting or purporting to act on behalf of the Government of Iran include persons on OFAC’s list of “Persons to be Defined as the Government of Iran” as listed in the ITR. 47 However, OFAC’s list is non-exhaustive and individuals can still be included within the definition of “Iran” under section 503 of the Bill if the individual acts or purports to act directly or indirectly on behalf of the Government of Iran.48 Therefore, an Iranian national who is not controlled or acting for or on behalf of the Government of Iran will not have his or her assets blocked pursuant to the TRIA if sent pursuant to a General B License because such individuals fail to satisfy the Bill’s definition of “Iran.”
§ 503(f)(4). See, e.g., Estate of Heiser v. Islamic Republic of Iran, 807 F. Supp. 2d 9, 20 (D.D.C. 2011) (defining an “instrumentality” as an entity that is wholly distinct, but owned by the government, controlled as an extension of the government, and is established under the laws of the government). 44 31 C.F.R. § 560.304 (2012). 45 Id. (defining entities and persons that encompass “the Government of Iran”). 46 Id. 47 31 C.F.R. pt. 560, appx. A to Part 560-Persons Determined To Be The Government Of Iran, as Defined in § 560.304 of this part, 75 Fed. Reg. 34,630 (Mar. 8, 2012). 48 Id. (“This non-exhaustive appendix lists persons determined by the Office of Foreign Assets Control . . . to be the Government of Iran, as defined in § 560.304 of this part.”).
The ITR’s focused definition is in line with the Bill’s stated purpose-the definition allows victims to seize frozen assets owned by the Government of Iran, and not Iranian nationals in general.49 Moreover, if the definition pertained to all Iranian nationals sending noncommercial personal remittances to U.S. persons, OFAC’s General License B would serve no purpose.50 Therefore, it is unlikely that section 503’s definition of “Iran” includes Iranian nationals who are not controlled or are acting on behalf of the Government of Iran because the ITR provides a limited definition of individuals who are defined as the “Government of Iran” and imposing a broad definition would cut against the purpose of the legislation. b. Separation of Powers and Policy Considerations.
Section 503 raises separation of power concerns because of the Executive Branch’s duty to formulate foreign affairs policy and maintain diplomatic relations. 51 Currently, the United States’ diplomatic relations with Iran are at best uncertain, and in reality almost non-existent. Given the Executive Branch’s foreign affairs power, section 503 of the Bill interferes and hinders this power by stripping the Executive of the right to exercise these powers to pressure, punish, or negotiate with the Government of Iran.52 The Supreme Court has suggested that the President-as Commander and Chief-is granted
Press Release, Senate Committee on Banking, Housing, and Urban Development, Menendez Hails Banking Committee Passage of Iran Sanctions Legislation (Feb. 2, 2012), available at http://menendez.senate.gov/newsroom/press/release/?id=338017b6-c793-439e-b5cf739f109e2c08 (stating that one of the purposes of the Bill is to “allow families . . . to enforce [a] judgment against Iran using Iranian assets being held at Citibank in NY”). 50 OFAC Notice: Information Regarding General Licenses A and B Under the New Executive Order of February 5, 2012, 77 Fed. Reg. 7660 (Feb. 13, 2012). 51 See Zemel v. Rusk, 381 U.S. 1, 17-18 (1965) (“Congress—in giving the Executive authority over matters of foreign affairs—must of necessity paint with a brush broader than that it customarily wields in domestic areas.”). 52 In re Islamic Republic of Iran Terrorism Litig., 659 F. Supp. 2d 31, 36 (D.D.C. 2009) (citing Michael T. Kotlarczyk, Note, “The Provision of Material Support and Resources” and Lawsuits Against State Sponsors of Terrorism, 96 GEO. L.J. 2029, 2049 (2008)).
independent authority when making decisions regarding foreign affairs.53 For instance, the Court has recognized the President’s authority to enter into Executive Agreements with foreign nations without the acquiescence of congressional authority. 54 Additionally, the Court has recognized that “[m]aking executive agreements to settle claims of American nationals against foreign governments is a particularly longstanding practice,” and “[t]hat the President's control of foreign relations includes the settlement of claims is indisputable.”55 However, the President’s authority over foreign affairs is not infinite; rather, Presidential authority is at its weakest when taken against a direct and contrary action of Congress.56 In practice, Congressional action should work in tandem with the Executive’s stated foreign affairs policy. Although the Constitution grants Congress the power to regulate foreign commerce and declare war, and to execute laws that are “necessary and proper” to achieve these goals, Congressional action should be in accord with the Executive’s power to shape foreign affairs policy.57 As reasoned in United States v. Curtis-Wright Exportation Co.,: If . . . in the maintenance of our international relations, embarrassment--perhaps serious embarrassment--is to be avoided and success for our aims achieved, congressional legislation which is to be made effective through negotiation and inquiry within the international field must often accord to the President a degree of discretion and freedom from statutory restriction which would not be admissible were domestic affairs alone involved.58 As such, by granting victims of terrorism a property right in funds allegedly owned by the
Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 610–611 (1952) (Frankfurter, J., concurring); see also Am. Ins. Ass'n v. Garamendi, 539 U.S. 396, 414-15 (2003) (“While Congress holds express authority to regulate public and private dealings with other nations in its war and foreign commerce powers, in foreign affairs the President has a degree of independent authority to act.”).
Dames & Moore v. Regan, 453 U.S. 654, 659 (1981). Garamedi, 539 U.S. at 415 (citing United States v. Pink, 315 U.S. 203, 223, 230 (1942)). 56 Youngstown Sheet & Tube Co., 343 U.S. at 610-11 (Frankfurter, J., concurring). 57 U.S. Const. art. I, § 8. 58 United States v. Curtiss-Wright Exp. Co., 299 U.S. 304, 316 (1936).
Government of Iran, section 503 fails to “accord to the President a degree of discretion” in determining how best to use the funds to further the Executive’s foreign policy goals.59 III. Conclusion
Section 503 is an attempt to solve the problems terrorism victims face in collecting judgments against foreign state sponsors of terrorism. The court awarded money judgments granted to U.S. victims of terrorism greatly exceed the Government of Iran’s property available for attachment within U.S. jurisdiction. Plaintiffs of the Beirut bombing have spent almost thirty years attempting to collect damages from the Government of Iran. Allowing victims to attach the estimated $2 billion in frozen assets of the Government of Iran held in Citibank Manhattan would provide victims their long-waited monetary relief. Nonetheless, the altruistic legislative purpose of section 503 is overridden by the Bill’s expansive language and its constraint of the President’s foreign affairs power. Executive Order 13,599 blocks all assets that come within U.S. jurisdiction of the Government of Iran, including any Iranian financial institution, regardless of government ownership. Section 503 provides that terrorism victims obtain a property right in “blocked assets” of the Government of Iran. Thus, the legislation poses concerns that an Iranian national, having no affiliation with the Government of Iran, would have their noncommercial personal remittance funds transfers blocked and used to satisfy terrorism judgments. However, it is unlikely section 503 of the Bill will subject Iran nationals’ noncommercial personal remittances to attachment under the TRIA because such funds are not “blocked assets” as defined in the Bill, and such persons are unlikely to meet the definition of “the Government of Iran.” First, “blocked assets” do not include the transfer of noncommercial personal remittances
because such funds are authorized pursuant to OFAC’s General B License. Second, an Iranian national will not qualify as “the Government of Iran” unless that person is acting on behalf of or is controlled by the Government of Iran. Moreover, the legislation is problematic because it poses separation of powers concerns by constricting the President’s foreign affairs power. By awarding terrorism victims a property right in the $2 billion assets allegedly owned by the Government of Iran, Congress is circumscribing the President’s authority to use the assets as a negotiation tool with the Government of Iran. The concern that terrorism victims are unable to collect judgments against the Government of Iran should not be overridden by the foreign policy goals of the President and the Executive Branch. Yet, even if section 503 is enacted, its effect in practice may be insignificant. Iranian nationals are still able to transfer noncommercial personal remittances to the United States pursuant to OFAC’s General License B. Furthermore, the President’s power to determine
foreign policy will likely be given deference when determining whether terrorism victims can satisfy their judgments against the Government of Iran using the frozen Citibank funds.
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