Updated February 9, 2021
Justice for United States Victims of State Sponsored Terrorism
Act: Eligibility and Funding
Since 1996, the Foreign Sovereign Immunities Act (FSIA)
Transportation Safety and System Stabilization Act” (49
has authorized U.S. courts to order state sponsors of
U.S.C. § 40101 note). The Clarification Act also enabled
terrorism—namely, Iran, North Korea, Cuba, and Syria, and
some previously excluded Iran Hostage claimants to receive
previously Libya, Iraq, and Sudan—to pay monetary
compensation.
damages to terrorism victims. Courts have since awarded an
estimated $150 billion against these states. Although these
Fund Administration
states have largely not participated in this litigation at the
The Attorney General initially appointed Kenneth R.
merits phase, some of these states have appeared in court to
Feinberg as the Special Master to administer the Fund on
attempt to prevent plaintiffs from collecting their assets.
May 17, 2016. After Feinberg’s term ended, the
Department of Justice named Deborah L. Connor, Chief of
Satisfaction of Terrorism Judgments
the Money Laundering and Asset Recovery Section,
Claims against Libya, and some claims against Sudan, were
Criminal Division, U.S. Department of Justice, the interim
ultimately resolved through bilateral claims settlement
Special Master on March 8, 2019. Mary Patrice Brown,
agreements, while Congress preserved claims against Sudan
who previously served as Deputy Assistant Attorney
involving victims and family members of the September 11
General in the Criminal Division, is now serving as Special
attacks in the Consolidated Appropriations Act, 2021 (P.L.
Master. The Fund is set to expire on January 2, 2039.
116-260). Judgments against Iraq were paid through
liquidating Iraqi assets frozen pursuant to the International
Eligibility
Emergency Economic Powers Act (IEEPA; 50 U.S.C.
In order to be eligible for compensation from the Fund, a
§§ 1701 et seq.), prior to vesting the remaining Iraqi assets
claimant must be a natural person (as opposed to a
in the United States for the Development Fund for Iraq.
corporation or some other legal entity), regardless of
Some judgment holders against other state sponsors of
citizenship:
terrorism received compensation through Section 2002 of
the Victims of Trafficking and Violence Protection Act
who holds a final judgment, decree, or order on liability
(P.L. 106-386) or by attaching frozen assets pursuant to
and damages:
Section 201 of the Terrorism Risk Insurance Act (28 U.S.C.
§ 1610 note). But due to the scarcity of these states’
issued by a U.S. federal district court;
attachable assets in the United States, the vast majority of
terrorism judgments remain outstanding.
against a designated state sponsor of
terrorism;
Congress has taken steps to enable these judgment creditors
to obtain at least some of the damages owed to them.
based on an injury arising from an act of
Passed as part of the Consolidated Appropriations Act,
torture, extrajudicial killing, aircraft sabotage,
2016 (P.L. 114-113), the “Justice for United States Victims
or hostage taking, or the provision of material
of State Sponsored Terrorism Act” (Act), 34 U.S.C.
support for such an action;
§ 20144, established the United States Victims of State
Sponsored Terrorism Fund (Fund) to provide a means for
for which the state is not immune under the
creditors with terrorism judgments against designated state
FSIA’s terrorism exception (28 U.S.C.
sponsors of terrorism to satisfy the compensatory portion of
§ 1605A or previous 28 U.S.C. § 1605(a)(7));
their judgments. Congress has since amended the Act to
and
expand the scope of eligibility for compensation under the
Fund, among other things.
that has not been satisfied, relinquished,
espoused by the United States, or resolved
2019 Clarification Act
pursuant to a bilateral claims agreement;
In 2019, Congress passed the “Justice for United States
Victims of State Sponsored Terrorism Clarification Act”
or
(Title VII of P.L. 116-69) (Clarification Act). The
Clarification Act amended the Act to provide coverage for
who was held hostage by Iran from November 4, 1979,
9/11 victims with judgments against Iran, some of whom
through January 20, 1981, or is the spouse or child of
were prohibited under the original Act from receiving
such a person if identified as a member of the proposed
compensation from the Fund because they had already
class in case number 1:00-CV-03110 (D.D.C.);
received compensation from the September 11th Victim
Compensation Fund established by Section 405 of the “Air
or
https://crsreports.congress.gov
Justice for United States Victims of State Sponsored Terrorism Act: Eligibility and Funding
who was held hostage by Iran during the period from
Eligible claimants who provide information to the Attorney
November 4, 1979, through January 20, 1981, and has
General that leads to a forfeiture required to be paid into the
not previously received an award from the Fund; and
Fund may receive a reward amounting to 10% of the
amount deposited into the Fund.
who is not criminally culpable for an act of international
terrorism.
Payments
The Fund made an initial series of payments beginning on
The Fund entitles eligible claimants to receive up to $20
March 10, 2017, amounting to $1,040,902,501.89. The
million per individual or $35 million for families. 9/11
Fund allocated another $1.095 billion for second-round
family members who are not spouses or dependents of 9/11
payments beginning on January 2, 2019. After the second
decedents are capped at $20 million for each family.
round of payments, the Special Master reported that
Qualifying victims of the Iran Hostage Crisis are eligible
$27,070,685,391.39 in awards remained outstanding. That
for compensation, up to $4.4 million per former hostage
amount will likely increase significantly due to new
who was held hostage for the entire 441 days, or the amount
judgments and expanded eligibility. The Special Master
of $600,000 each for their spouses and children. Hostages
authorized a third round of pro rata payments totaling
taken from the U.S. Embassy in Tehran but held for less
$1.075 billion for third-round payments beginning May 19,
than the entire period of the Iran Hostage Crisis are eligible
2020, with any subsequent rounds to be made on January 1
to receive $10,000 per day of captivity; their spouses and
of each following calendar year if sufficient funds are
children remain ineligible for compensation from the Fund.
available.
Applicants whose claims are denied may request a hearing
Payments are made on a pro rata basis, with half of the
with the Special Master, but awards or denials of awards
available funds to be distributed to 9/11 claimants and half
are not subject to court appeal.
to be distributed among non-9/11 claimants. Claimants who
have received 30% or more of the amount of their
Funding
compensatory damages from sources other than the Fund
Congress established the Fund with an initial deposit of
(including life insurance; pension funds; death benefit
$1,025,000,000 from the amount paid to the United States
programs; payments by federal, state, or local governments,
pursuant to the June 27, 2014, plea agreement and
not including the September 11 Victim Compensation
settlement between the United States and the French bank
Fund; and court-awarded compensation) will not receive
BNP Paribas for sanctions violations. The Fund continues
payment from the Fund until such time as all other eligible
to be financed:
claimants have received 30% of their compensatory
damages or amount of the claim under the Iran Hostage
from all funds and the net proceeds from the sale of
Crisis provision. Applicants who have received less than
property forfeited or paid to the United States as
30% of compensatory damages from other sources may
criminal penalty or fine arising from the violation of
apply for the difference between the percentage of
regulations issued under IEEPA; the “Trading with the
compensatory damages received from other sources and the
Enemy Act” (50 U.S.C. App. §§ 1 et seq.); or any
percentage of compensatory damages to be awarded to
related civil or criminal conspiracy, scheme, or other
other eligible applicants from the Fund. Congress has
federal offense related to doing business or acting on
directed the Comptroller General to propose lump-sum
behalf of a state sponsor of terrorism;
catch-up payments for 9/11 claimants.
from half of all funds and net proceeds from the sale of
The Act prohibits attorneys representing claimants from
property forfeited or paid to the United States as a civil
charging more than 25% of any payment made from the
penalty or fine arising out of the same types of
Fund. After November 21, 2019, no attorney representing a
violations prior to November 19, 2019, and 75% of such
9/11-related claimant may charge any fees and costs that in
funds and proceeds thereafter;
the aggregate exceed 15% of any award payment.
using proceeds from the sale of any Iranian property
The United States is to be subrogated to the rights of
forfeited in In re 650 Fifth Avenue and Related
applicants who receive payment from the Fund. The Act
Properties, No. 08 Civ. 10934 (S.D.N.Y. filed Dec. 17,
requires the President to pursue subrogation rights as claims
2008), minus ligation expenses and sales cost, and not
or offsets of the United States in appropriate ways, such as
including the proceeds attributable to any party
through potential negotiations surrounding the
identified as a Settling Judgment Creditor in that case
normalization of relations. Judgment holders are permitted
who did not elect to participate in the Fund; and
to pursue satisfaction of any unpaid portion of their
judgments—including punitive damages and pre- or post-
using the assets distributed (about $1.7 billion) in
judgment interest awarded by the district court—through
Peterson v. Islamic Republic of Iran, No. 10 Civ. 4518
enforcement actions in court.
(S.D.N.Y.) to the extent the creditors elected to
participate in the Fund.
Jennifer K. Elsea, Legislative Attorney
IF10341
https://crsreports.congress.gov
Justice for United States Victims of State Sponsored Terrorism Act: Eligibility and Funding
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https://crsreports.congress.gov | IF10341 · VERSION 6 · UPDATED