Justice for United States Victims of State Sponsored Terrorism Act: Eligibility and Funding

Justice for United States Victims of State Sponsored Terrorism Act: Eligibility and Funding

Justice for United States Victims of State Sponsored Terrorism Act: Eligibility and Funding

Updated November 25, 2025 (IF10341)

Since 1996, the Foreign Sovereign Immunities Act (FSIA, 28 U.S.C. §§ 1602-11) has authorized U.S. courts to order designated state sponsors of terrorism—namely, Iran, North Korea, Cuba, and Syria and previously Libya, Iraq, and Sudan—to pay monetary damages to terrorism victims. Courts have since awarded billions of dollars against these states. Although these states have largely not participated in this litigation at the merits phase, some have appeared in court to prevent plaintiffs from collecting their assets.

Satisfaction of Terrorism Judgments

Claims against Libya, and some claims against Sudan, were ultimately resolved through bilateral claims settlement agreements. Congress preserved claims against Sudan involving victims and family members of the 9/11 attacks in the Consolidated Appropriations Act, 2021 (P.L. 116-260). Judgments against Iraq were paid through liquidating Iraqi assets frozen pursuant to the International Emergency Economic Powers Act (IEEPA, 50 U.S.C. §§ 1701-10) prior to vesting the remaining Iraqi assets in the United States for contribution to the Development Fund for Iraq.

Some judgment holders against other state sponsors of terrorism received compensation through Section 2002 of the Victims of Trafficking and Violence Protection Act (P.L. 106-386) or by attaching frozen assets pursuant to Section 201 of the Terrorism Risk Insurance Act (28 U.S.C. § 1610 note) to satisfy the judgments. Due to the scarcity of these states' attachable assets in the United States, the vast majority of terrorism judgments remain outstanding.

Congress has taken steps to enable these judgment creditors to obtain at least some of the damages owed to them. Passed as part of the Consolidated Appropriations Act, 2016 (P.L. 114-113), the Justice for United States Victims of State Sponsored Terrorism Act (Act), 34 U.S.C. § 20144, established the United States Victims of State Sponsored Terrorism Fund (USVSST Fund or Fund) to provide a means for creditors with terrorism judgments against designated state sponsors of terrorism to satisfy the compensatory portion of their judgments. Congress has since amended the Act to expand the scope of eligibility for compensation under the Fund, among other things.

2019 Clarification Act

In 2019, Congress passed the Justice for United States Victims of State Sponsored Terrorism Clarification Act (Title VII of P.L. 116-69) (Clarification Act). The Clarification Act amended the Act to provide coverage for 9/11 victims with judgments against Iran, some of whom were prohibited under the original Act from receiving compensation from the Fund because they had received compensation from the September 11th Victim Compensation Fund established by Section 405 of the Air Transportation Safety and System Stabilization Act (49 U.S.C. § 40101 note). The Clarification Act also enabled some previously excluded Iran hostage claimants to receive compensation.

Fairness for 9/11 Families Act

In 2022, Congress passed the Fairness for 9/11 Families Act (Division MM of P.L. 117-328) (Fairness Act), which amended the Act to provide for catch-up payments for 9/11 victims made eligible by the Clarification Act and payments for certain victims of either the 1983 Beirut Marine barracks bombing or the 1996 Khobar Towers bombing. The catch-up payments allow eligible 9/11 victims to receive a percentage of their claims from the Fund equal to the percentage other 9/11 family members received in earlier rounds. The Fairness Act appropriates sufficient funds to make these one-time catch-up payments as assessed by the Government Accountability Office (GAO) pursuant to the Clarification Act—which is approximately $2.7 billion.

The Fairness Act also directs GAO to assess catch-up payments for victims of the 1983 Beirut Marine barracks bombing and the 1996 Khobar Towers bombing who obtained final judgments prior to December 29, 2022, and who file a claim within the prescribed window. That Act establishes a $3 billion reserve fund for catch-up payments. In 2024, GAO determined that these claimants are entitled to receive $614 million but that some claimants who had previously been deemed eligible might also be entitled to receive about $116 million in catch-up payments. The Department of Justice (DOJ) believes that claimants who had previously been deemed eligible are not entitled under the Fairness Act to receive catch-up payments and notes that many of them have already recovered at least 30% of the amount of their claims and are not eligible for payments from regular rounds. Under the statute, anything remaining from the reserve fund will be rolled over into the USVSST Fund for future rounds of payments.

Eligibility

In order to be eligible for compensation from the USVSST Fund, a claimant must be a natural person (i.e., not a corporation or some other legal entity), regardless of citizenship, who has not been found criminally culpable for an act of international terrorism and who:

1. (i) holds a final judgment, decree, or order on liability and damages (ii) issued by a U.S. federal district court (iii) against a designated state sponsor of terrorism (iv) based on an injury arising from an act of torture, extrajudicial killing, aircraft sabotage, or hostage taking, or the provision of material support for such an action (v) for which the state is not immune under the FSIA's terrorism exception (28 U.S.C. § 1605A or previous 28 U.S.C. § 1605(a)(7)) (vi) that has not been satisfied, relinquished, espoused by the United States, or resolved pursuant to a bilateral claims agreement; or

2. was held hostage by Iran from November 4, 1979, through January 20, 1981, or is the spouse or child of such a person if identified as a member of the proposed class in Roeder v. Islamic Republic of Iran, Docket No. 1:00-CV-03110 (D.D.C.); or

3. was held hostage by Iran during the period from November 4, 1979, through January 20, 1981, did not have an eligible claim before November 21, 2019, and submitted a payment application by February 19, 2020.

The USVSST Fund entitles eligible claimants to receive up to $20 million per individual or $35 million for families. Family members of 9/11 victims who are not spouses or dependents of 9/11 decedents are capped at $20 million for each family. Qualifying victims of the Iran hostage crisis are eligible for compensation up to $4.4 million per former hostage ($10,000 per day) who was held hostage for the entire 441 days or the amount of $600,000 each for their spouses and children. Hostages taken from the U.S. embassy in Tehran but held for less than the entire period of the Iran hostage crisis are eligible to receive $10,000 per day of captivity. Their spouses and children remain ineligible. Applicants whose claims are denied may request a hearing with the Special Master of the Fund, but awards or denials of awards are not subject to judicial review. Eligible claimants who provide information to the Attorney General that leads to a forfeiture required to be paid into the Fund may receive a reward amounting to 10% of the deposit into the Fund.

Funding

Congress established the USVSST Fund with an initial deposit of $1,025,000,000, the amount paid to the United States pursuant to a 2014 settlement between the United States and the French bank BNP Paribas for sanctions violations. Currently, the Fund is financed:

from all funds and the net proceeds from the sale of property forfeited or paid to the United States as criminal penalty or fine arising from the violation of regulations issued under IEEPA; the Trading with the Enemy Act; or any related civil or criminal conspiracy, scheme, or other federal offense related to doing business or acting on behalf of a state sponsor of terrorism;

from 75% 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 these types of violations.

The Act also provided for potential assignment to the Fund of compensation received by participants in two cases attempting to attach Iranian funds: Peterson v. Islamic Republic of Iran and In re 650 Fifth Ave. These litigants had three options, as explained by the Special Master: (1) opt out of the USVSST Fund, (2) opt in but assign their portion of proceeds to the Fund, or (3) apply for conditional payments. The Fairness Act, however, permitted the Beirut and the Khobar Towers victims who had initially opted out to file claims without assigning any litigation proceeds to the Fund or filing conditionally.

Due to the shortfall in funds that has resulted in claimants' receiving only a small portion of the compensation owed them, Congress, in the Fairness Act, directed GAO to assess potential means for increasing deposits into the Fund. In addition, the American Victims of Terrorism Compensation Act (H.R. 1530/S. 706) has been introduced in the 119th Congress. This bill would modify the funding mechanism so that all net proceeds of forfeitures in connection with covered violations would be paid into the Fund. The bills would also direct 50% of the excess unobligated balance of the Treasury and DOJ Forfeiture Funds into the USVSST Fund, as well as $1,912,031,763 in proceeds from a case that DOJ had determined do not qualify for the Fund.

Payments

Since 2017, the USVSST Fund has made five rounds of payments totaling more than $7 billion. In 2025, the Special Master reported that, after the fifth-round payments, $102,238,100,613.37 will remain outstanding. That amount will likely increase as courts continue to award judgments.

Payments are made on a pro rata basis. The Clarification Act bifurcated payments so that, beginning with the third round, half of the available funds are to be distributed to 9/11 claimants and half are to be distributed among non-9/11 claimants. Claimants who have received 30% or more of the amount of their compensatory damages from sources other than the USVSST Fund (including life insurance; pension funds; death benefit programs; federal, state, or local government payments except for the September 11 Victim Compensation Fund; and court-awarded compensation) will not receive payment from the USVSST Fund until all other eligible claimants have received 30% of their compensatory damages. Applicants who have received some but less than 30% of compensatory damages from other sources may apply for a proportionate sum.

The Act prohibits claimants' attorneys from charging more than 25% of any payment made from the USVSST Fund. For 9/11-related claims, attorneys' fees are capped at 15%.

The United States is to be subrogated to the rights of applicants who receive payment from the USVSST Fund, meaning it can seek to recover from the debtor state sponsors of terrorism any amounts the Fund pays to eligible claimants in satisfaction of those states' judgments. The Act requires the President to pursue subrogation rights as claims or offsets of the United States in appropriate ways, such as through potential negotiations surrounding the normalization of relations. Judgment holders are permitted to pursue satisfaction of any unpaid portion of their judgments—including punitive damages and pre- or post-judgment interest awarded by the district court—through enforcement actions in court.