Suits Against Terrorist States By Victims of Terrorism (PDF; 338 KB)
Source: Congressional Research Service (via Federation of American Scientists)

In 1996 Congress amended the Foreign Sovereign Immunities Act (FSIA) to allow U.S. victims of terrorism to sue certain States responsible for terrorist acts. The terrorist State defendants have refused to appear in court, the courts have handed down large default judgments, the Clinton and Bush Administrations have intervened to block collection on those judgments, and Congress has repeatedly enacted measures to facilitate payment. Further complexity has been added by attempts in one suit to abrogate an international agreement, the enactment of retaliatory legislation in some of the terrorist States, the war in Iraq, the suspension of Iraq’s and Libya’s status as terrorist States, and a proposal to compensate victims through an administrative process. A court ruled that Congress has never created a federal cause of action against terrorist States themselves, but only against their officials, employees and agents, and only for their private conduct, not for their official acts. Consequently, plaintiffs have asserted causes of action based on state law.

The 107th Congress enacted as part of the Terrorism Risk Insurance Act of 2002 (”TRIA”)(P.L. 107-297) a provision that overrides long-standing Administration objections and allows the blocked assets of terrorist States to be used to pay the compensatory damages portions of court judgments against such States. That statute also added several judgments against Iran to the ten that had previously been designated as compensable out of U.S. funds under S 2002 of the Victims of Trafficking and Violence Protection Act of 2000 (”VTVPA”) (P.L. 106-386). In the 108th Congress, the Senate adopted several riders to appropriations bills to abrogate the provision in the Algiers Accords barring the Iran hostages from bringing suit in the Roeder case, but the riders were all dropped in conference. In 2003, President Bush vested title to Iraq’s frozen assets in this country and ordered that most of the proceeds be used for Iraq’s reconstruction rather than to compensate victims of Iraqi terrorism. The Administration then intervened in a case against Iraq by POWs from the first Gulf War to vacate their judgment and ensure that Iraq’s frozen assets were not used to satisfy it. (Acree v. Republic of Iraq). In 2006, the Supreme Court vacated a decision allowing the attachment of a judgment owed to Iran’s Ministry of Defense (MOD) based on the FSIA commercial property exception, MOD v. Elahi, but on remand, the lower court permitted attachment as a blocked asset under TRIA.

This report provides an overview of this complex issue; gives background on the doctrine of state immunity and the FSIA; details the evolution of the terrorist State exception enacted in 1996 and some of the judicial decisions that have followed; describes the subsequent proposals and statutes enacted to help claimants satisfy their judgments; sets forth some legal and policy arguments that have been made for and against those legislative initiatives; describes the decision in the hostages’ suit against Iran and Congress’s efforts to vitiate the Algiers Accords; summarizes what has happened with Iraq’s assets, and summarizes proposed legislation (H.R. 1585, H.R. 3346, S. 1944, and H.R. 2764). The report also contains two appendices: Appendix I provides a list of cases covered by S 2002 as amended and the amount of compensation paid, as well as a list of cases not covered. Appendix II lists the amount of the assets of each terrorist state currently blocked by the United States. The report will be updated as events warrant.

This entry was posted on Tuesday, January 8th, 2008 at 7:39 pm and is filed under Congressional Research Service, Government and politics, International Relations, Legal and law enforcement, Terrorism. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.