Updated December 19, 2019
Justice for United States Victims of State Sponsored Terrorism
Act: Eligibility and Funding
Since 1996, the Foreign Sovereign Immunities Act (FSIA)
some previously excluded Iran Hostage claimants to receive
has authorized U.S. courts to order state sponsors of
compensation.
terrorism—namely, Iran, Sudan, North Korea, and Syria,
and previously Libya, Iraq, and Cuba—to pay monetary
Fund Administration
damages to terrorism victims. Courts have since awarded an
The Attorney General initially appointed Kenneth R.
estimated $90 billion against these states. Although these
Feinberg as the Special Master to administer the Fund on
states have largely not participated in this litigation at the
May 17, 2016. After Feinberg’s term ended, the
merits phase, some of these states have appeared in court to
Department of Justice named Deborah L. Connor, Chief of
attempt to prevent plaintiffs from collecting their assets.
the Money Laundering and Asset Recovery Section,
Criminal Division, U.S. Department of Justice, the interim
Satisfaction of Terrorism Judgments
Special Master on March 8, 2019. The Fund is set to expire
Claims against Libya were ultimately resolved through a
on January 2, 2030.
bilateral claims settlement agreement, and judgments
against Iraq were paid through liquidating Iraqi assets
Eligibility
frozen pursuant to the International Emergency Economic
In order to be eligible for compensation from the Fund, a
Powers Act (IEEPA; 50 U.S.C. §§ 1701 et seq.), prior to
claimant must be a natural person (as opposed to a
vesting the remaining Iraqi assets in the United States for
corporation or some other legal entity), regardless of
the Development Fund for Iraq. Some judgment holders
citizenship:
against other state sponsors of terrorism received
compensation through Section 2002 of the Victims of
who holds a final judgment, decree, or order on liability
Trafficking and Violence Protection Act (P.L. 106-386) or
and damages:
by attaching frozen assets pursuant to Section 201 of the
Terrorism Risk Insurance Act (28 U.S.C. § 1610 note). But
issued by a U.S. federal district court;
due to the scarcity of these states’ attachable assets in the
United States, the vast majority of terrorism judgments
against a designated state sponsor of
remain outstanding.
terrorism;
Congress has taken steps to enable these judgment creditors
based on an injury arising from an act of
to obtain at least some of the damages owed to them.
torture, extrajudicial killing, aircraft sabotage,
Passed as part of the Consolidated Appropriations Act,
or hostage taking, or the provision of material
2016 (P.L. 114-113), the “Justice for United States Victims
support for such an action;
of State Sponsored Terrorism Act” (Act), 34 U.S.C.
§ 20144, established the United States Victims of State
for which the state is not immune under the
Sponsored Terrorism Fund (Fund) to provide a means for
FSIA’s terrorism exception (28 U.S.C.
creditors with terrorism judgments against designated state
§ 1605A or previous 28 U.S.C. § 1605(a)(7));
sponsors of terrorism to satisfy the compensatory portion of
and
their judgments. Congress has since amended the Act to
expand the scope of eligibility for compensation under the
that has not been satisfied, relinquished,
Fund, among other things.
espoused by the United States, or resolved
pursuant to a bilateral claims agreement;
2019 Clarification Act
In 2019, Congress passed the “Justice for United States
or
Victims of State Sponsored Terrorism Clarification Act”
(Title VII of P.L. 116-69) (Clarification Act). The
who was held hostage by Iran from November 4, 1979,
Clarification Act amended the Act to provide coverage for
through January 20, 1981, or is the spouse or child of
9/11 victims with judgments against Iran, some of whom
such a person if identified as a member of the proposed
were prohibited under the original Act from receiving
class in case number 1:00-CV-03110 (D.D.C.);
compensation from the Fund because they had already
received compensation from the September 11th Victim
or who was held hostage by Iran during the period from
Compensation Fund established by Section 405 of the “Air
November 4, 1979, through January 20, 1981, and has
Transportation Safety and System Stabilization Act” (49
not previously received an award from the Fund
U.S.C. § 40101 note). The Clarification Act also enabled
and
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Justice for United States Victims of State Sponsored Terrorism Act: Eligibility and Funding
who is not criminally culpable for an act of international
Attorney General finds that the information substantially
terrorism.
contributed to the forfeiture.
The Fund entitles eligible claimants to receive up to $20
Payments
million per individual or $35 million for families. 9/11
The Fund made an initial series of payments beginning on
family members who are not spouses or dependents of 9/11
March 10, 2017, amounting to $1,040,902,501.89. The
decedents are capped at $20 million for each family.
Fund allocated another $1.095 billion for second-round
Qualifying victims of the Iran Hostage Crisis are eligible
payments beginning on January 2, 2019. After the second
for compensation, up to $4.4 million per former hostage
round of payments, the Special Master reported that
who was held hostage for the entire 441 days, or the amount
$27,070,685,391.39 in compensatory damages (or statutory
of $600,000 each for their spouses and children. Hostages
award amounts for Iran hostages and their spouses and
taken from the U.S. Embassy in Tehran but held for less
children) remained outstanding. That amount will likely
than the entire period of the Iran Hostage Crisis are eligible
increase significantly due to new judgments and expanded
to receive $10,000 per day of captivity; their spouses and
eligibility under the Clarification Act. The Special Master
children remain ineligible for compensation from the Fund.
will authorize a third round of pro rata payments by May
19, 2020, with any subsequent rounds to be made on
Applicants whose claims are denied may request a hearing
January 1 of each following calendar year if sufficient
with the Special Master, but awards or denials of awards
funds are available.
are not subject to court appeal.
Payments are made on a pro rata basis, with half of the
Funding
available funds to be distributed to 9/11 claimants and half
Congress established the Fund with an initial deposit of
to be distributed among non-9/11 claimants. Claimants who
$1,025,000,000 from the amount paid to the United States
have received 30% or more of the amount of their
pursuant to the June 27, 2014, plea agreement and
compensatory damages from sources other than the Fund
settlement between the United States and the French bank
(including life insurance; pension funds; death benefit
BNP Paribas for sanctions violations. The Fund continues
programs; payments by federal, state, or local governments,
to be financed:
not including the September 11 Victim Compensation
Fund; and court-awarded compensation) will not receive
from all funds and the net proceeds from the sale of
payment from the Fund until such time as all other eligible
property forfeited or paid to the United States as
claimants have received 30% of their compensatory
criminal penalty or fine arising from the violation of
damages or amount of the claim under the Iran Hostage
regulations issued under IEEPA; the “Trading with the
Crisis provision. Applicants who have received less than
Enemy Act” (50 U.S.C. App. §§ 1 et seq.); or any
30% of compensatory damages from other sources may
related civil or criminal conspiracy, scheme, or other
apply for the difference between the percentage of
federal offense related to doing business or acting on
compensatory damages received from other sources and the
behalf of a state sponsor of terrorism;
percentage of compensatory damages to be awarded to
other eligible applicants from the Fund.
from half of all funds and net proceeds from the sale of
property forfeited or paid to the United States as a civil
The Act prohibits attorneys representing claimants from
penalty or fine arising out of the same types of
charging more than 25% of any payment made from the
violations prior to November 19, 2019, and 75% of such
Fund. After November 21, 2019, no attorney representing a
funds and proceeds thereafter;
9/11-related claimant may charge any payment of fees and
costs that in the aggregate exceeds 15% of any award
using proceeds from the sale of any Iranian property
payment.
forfeited in In re 650 Fifth Avenue and Related
Properties, No. 08 Civ. 10934 (S.D.N.Y. filed Dec. 17,
The United States is to be subrogated to the rights of
2008), minus ligation expenses and sales cost, and not
applicants who receive payment from the Fund. The Act
including the proceeds attributable to any party
requires the President to pursue subrogation rights as claims
identified as a Settling Judgment Creditor in that case
or offsets of the United States in appropriate ways, such as
who did not elect to participate in the Fund; and
through potential negotiations surrounding the
normalization of relations with foreign countries currently
using the assets distributed (about $1.7 billion) in
designated as state sponsors of terrorism. Judgment holders
Peterson v. Islamic Republic of Iran, No. 10 Civ. 4518
are permitted to pursue satisfaction of any unpaid portion of
(S.D.N.Y.) to the extent the creditors elected to
their judgments—including punitive damages and pre- or
participate in the Fund.
post-judgment interest awarded by the district court—
through enforcement actions in court.
Eligible claimants who provide information to the Attorney
General that leads to a forfeiture required to be paid into the
Jennifer K. Elsea, Legislative Attorney
Fund may receive a reward amounting to 10% of the
amount deposited into the Fund if (1) such information is
IF10341
not previously known to the government, and (2) if the
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Justice for United States Victims of State Sponsored Terrorism Act: Eligibility and Funding
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https://crsreports.congress.gov | IF10341 · VERSION 4 · UPDATED