December 30, 2015
Justice for United States Victims of State Sponsored Terrorism
Act: Eligibility and Funding
Beginning in 1996, U.S. courts have had jurisdiction under
who holds a final judgment, decree, or order on liability
the Foreign Sovereign Immunities Act (FSIA) to award
and damages:
damages to certain terrorism victims against the responsible
designated state sponsor of terrorism—that is, Iran, Sudan,
issued by a U.S. federal district court;
or Syria, and previously Libya, North Korea, Iraq, or Cuba.
Courts have since awarded an estimated $65 billion against
against a designated state sponsor of
these states, largely uncontested at the merits phase (though
terrorism;
states have litigated to protect assets). Claims against Libya
were ultimately resolved through a bilateral claims
based on an injury arising from an act of
settlement agreement, and judgments against Iraq were paid
torture, extrajudicial killing, aircraft sabotage,
through liquidating frozen assets prior to vesting the
or hostage taking, or the provision of material
remaining Iraqi assets for the Development Fund for Iraq.
support such an action;
Some judgment holders against other state sponsors of
terrorism received compensation through Section 2002 of
for which foreign sovereign immunity was
the Victims of Trafficking and Violence Protection Act
denied based on the terrorism exception to the
(P.L. 106-386) or by attaching frozen assets pursuant to
FSIA (28 U.S.C. §1605A or previous 28
Section 201 of the Terrorism Risk Insurance Act (28 U.S.C.
U.S.C. §1605(a)(7) ); and
§1610 note). But due to the scarcity of these states’
attachable assets in the United States, the vast majority of
that has not been satisfied, relinquished,
terrorism judgments remain outstanding.
espoused by the United States, or resolved
pursuant to a bilateral claims agreement;
Congress has taken steps to enable these judgment creditors
to obtain at least some of the damages owed to them.
or
Passed as part of the Consolidate Appropriations Act, 2016
(P.L. 114-113), the “Justice for United States Victims of
who was held hostage by Iran from November 4, 1979,
State Sponsored Terrorism Act” establishes a new fund in
through January 20, 1981, or is the spouse or child of
the U.S. Treasury to provide a means for creditors with
such a person if identified as a member of the proposed
terrorism judgments against designated state sponsors of
class in case number 1:00-CV-03110 (D.D.C.); and
terrorism to satisfy the compensatory portion of their
judgments, up to $20 million per individual or $35 million
who is not criminally culpable for an act of international
for families. Qualifying victims of the Iran Hostage Crisis
terrorism.
will also be eligible for compensation, up to $4.4 million
per former hostage or the amount of $600,000 each for
Funding
spouses and children. A claimant who (or whose immediate
The Fund is to be established with an initial deposit of
family member) has been awarded compensation under
$1,025,000,000 from the amount paid to the United States
Section 405 of the Air Transportation Safety and System
pursuant to the June 27, 2014, plea agreement and
Stabilization Act (49 U.S.C. §40101 note) will be eligible to
settlement between the United States and BNP Paribas for
receive the amount of that award.
sanctions violations. The Fund will be further financed:
The United States Victims of State Sponsored Terrorism
prospectively, from all funds and the net proceeds from
Fund will be administered by a special master to be
the sale of property forfeited or paid to the United States
appointed by the Attorney General. Once appointed, the
as criminal penalty or fine arising from the violation of
special master will have 60 days to publish regulations
regulations issued under the International Emergency
setting forth procedures for claimants to establish eligibility
Economic Powers Act (50 U.S.C. §§1701 et seq.) or the
and receive payment from the Fund. The Fund is set to
Trading with the Enemy Act (50 U.S.C. App. §§1 et
expire on January 2, 2026.
seq.) or any related civil or criminal conspiracy, scheme,
or other federal offense related to doing business or
Eligibility
acting on behalf of a state sponsor of terrorism;
In order to be eligible for compensation from the Fund, a
claimant must be a natural person:
prospectively, from half of all funds and net proceeds
from the sale of property forfeited or paid to the United
States as a civil penalty or fine arising out of the same
types of violations;
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Justice for United States Victims of State Sponsored Terrorism Act: Eligibility and Funding
using proceeds from the sale of any Iranian property
Fund until such time as all other eligible claimants have
forfeited in In re 650 Fifth Avenue and Related
received 30 percent of their compensatory damages or
Properties, No. 08 Civ. 10934 (S.D.N.Y. filed Dec. 17,
amount of the claim under the Iran Hostage Crisis
2008), minus ligation expenses and sales cost, and not
provision. Applicants who have received less than 30
including the proceeds attributable to any party
percent of compensatory damages from other sources may
identified as a Settling Judgment Creditor in that case
apply for the difference between the percentage of
who does not elect to participate in the Fund;
compensatory damages received from other sources and the
percentage of compensatory damages to be awarded to
using the assets at issue (about $1.7 billion) in Peterson
other eligible applicants from the Fund. Additional pro rata
v. Islamic Republic of Iran, No. 10 Civ. 4518 (S.D.N.Y.)
payments are to be authorized on January 1 of the second
if a final judgment is issued awarding them to the
calendar year after the initial payments if sufficient funds
identified judgment creditors, to the extent those
are available.
creditors elect not to participate in the fund.
Attorneys representing claimants are prohibited from
Eligible claimants who provide information to the Attorney
charging more than 25 percent of any payment made from
General that leads to a forfeiture required to be paid into the
the Fund.
Fund are eligible to receive a reward amounting to 10
percent of the amount deposited into the Fund—if such
The United States is to be subrogated to the rights of
information is not previously known to the government—
applicants who receive payment from the Fund. The Act
upon a finding by the Attorney General that the information
requires the President to pursue subrogation rights as claims
substantially contributed to the forfeiture.
or offsets of the United States in appropriate ways, such as
through negotiations surrounding the normalization of
Payments
relations. Judgment holders are permitted to pursue
The initial payments from the Fund to eligible claimants are
satisfaction of any unpaid portion of their judgments—
slated to begin no later than December 2016. Payments will
including punitive damages and pre- or post-judgment
be made on a pro rata basis. Claimants who have received
interest awarded by the district court—through enforcement
30 percent or more of the amount of their compensatory
actions in court.
damages from sources other than the Fund (including life
insurance; pension funds; death benefit programs; payments
Jennifer K. Elsea, Legislative Attorney
by federal, state, or local governments, including the
September 11 Victim Compensation Fund; and court-
IF10341
awarded compensation) will not receive payment from the
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Justice for United States Victims of State Sponsored Terrorism Act: Eligibility and Funding
Disclaimer
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https://crsreports.congress.gov | IF10341 · VERSION 3 · NEW