- Not enactedThe President has not signed this bill
- The house has not voted
- The senate has not voted
Committee on Foreign RelationsIntroducedMay 16th, 2019
- senate Committees
What is Senate Bill S. 1529?
Cost of Senate Bill S. 1529
In-Depth: Sen. Tom Cotton introduced this bill to help American terror victims and their families collect financial judgments against Iran:
“Iran's terrorist puppets killed 241 Americans in the 1983 Marine Corps bombing, including 220 Marines. Our bill will help victims and their families obtain restitution for Iran's bloody crimes from money the regime has laundered.”
Original cosponsor Sen. Sheldon Whitehouse (D-RI) adds:
“Our bipartisan bill would help deliver long-overdue justice for the victims of the Beirut bombing. The hundreds of Marine families who lost a loved one to Iranian state-sponsored terrorism have a right to restitution.”
This legislation has eight bipartisan Senate cosponsors, including five Republicans and three Democrats. Its House companion, the Our Obligation to Recognize American Heroes (OORAH) Act of 2019 (H.R.2790), is sponsored by Rep. Greg Pence (R-IN) with the support of 44 bipartisan House cosponsors, including 38 Republicans and six Democrats. Neither bill has received a committee vote.
Of Note: In October 1983, an Iranian national drove a truck bomb into the U.S. Marine Barracks in Beirut, Lebanon, killing 220 Marines and dozens of other personnel. The attack was planned by Hezbollah, a terror group founded, trained, and personally supported by the Iranian regime. The Iranian regime’s complicity in the Beirut bombing has been “long recognized,” as the Supreme Court noted in the 2016 ruling Bank Markazi v. Peterson (Bank Markazi is Iran’s state-owned central bank).
Since the bombing, family members and survivors of the bombing, led by Deborah Peterson (the sister of Lance Cpl. James C. Knipple who was killed in the bombing), have pursued the Iranian government in the courts. They’ve won a total of $3.8 billion in judgments against Iran and have been trying to seize Iranian assets because Iran refuses to pay the restitution.
Currently, these families are seeking to enforce these judgments against Clearstream, a Deutsche Boerse subsidiary that is holding $1.68 billion of Iranian funds in Luxembourg which are owed to an Italian bank acting as a financial intermediary for Bank Markazi. This bank account was maintained by Clearstream with a correspondent account in New York invested in European bonds. In order to evade anti-money laundering laws, Clearstream used credits and debits instead of transferring U.S. dollars earned in New York.
Generally, foreign governments have sovereign immunity under the Foreign Sovereign Immunities Act (FSIA), which makes them immune from lawsuits filed by private parties (such as the families and survivors of the Beirut bombing). However, an exception in FSIA for acts of terrorism committed by an “official, employee or agent” of a foreign government allows the Beirut families to obtain a judgment against Iran in American courts.
In an attempt to collect part of the $3.8 billion owed to them, Peterson and the other Beirut families sued in New York to force Clearstream to turn over the $1.68 billion in Luxembourg to satisfy part of their judgment against Iran. However, a federal district court judge blocked their action, ruling that FSIA doesn’t allow the seizure of assets outside the U.S.
The Second Circuit then overruled that decision, holding that FSIA doesn’t prevent the seizure of the assets of a foreign government outside of the U.S. (such as the Clearstream holdings in Luxembourg) because FSIA immunity doesn’t apply to property belonging to a foreign sovereign unless it’s located in the U.S.
Additionally, the Second Circuit found that when a court has personal jurisdiction over a non-governmental entity such as Clearstream Banking, it can, under applicable state law, “direct a non-non-sovereign in possession of a foreign sovereign’s extraterritorial assets to bring those assets to New York State.” The Second Circuit noted the potential foreign policy implications of its ruling, which seemed to it to be at odds with FSIA’s purpose “to facilitate and depoliticize litigation against foreign states and to minimize irritations in foreign relations arising out of such litigation.” However, it left it to Congress or the Supreme Court to resolve problems arising form its decision.
After the Second Court’s ruling, the case was remanded to the district court to determine if, once the Luxembourg assets are transferred to New York, any of the exceptions in the FSIA would allow the money to then be turned over to Peterson and her fellow plaintiffs.
The Iranian government and its banks want the Supreme Court to overturn the Second Court’s ruling and prevent the $1.68 billion from being used to compensate Peterson and her fellow plaintiffs.
The Supreme Court has yet to indicate whether it will hear the case.
Heritage Foundation fellows Hans A. von Spakosvky and Charles Stimson argue that the Trump administration, and specifically the Justice Dept., should support Peterson and the other Beirut bombing families by siding with the Second Circuit’s decision:
“While sovereign immunity is an important legal doctrine that protects governmental interests and international diplomacy, it should not be used to protect state sponsors of terrorism. Moreover, the Second Circuit’s decision, in this case, is important to prevent outlaw regimes such as Iran from using financial intermediaries like Clearstream — which U.S. senators say is a money launderer — to get around sanctions imposed by our government and its allies.”
Separate from these proceedings in the U.S., Iran filed a suit against Clearstream in Luxembourg in January 2018. It is seeking to recover $4.9 billion in assets plus interest, including $1.9 billion turned over to Peterson and her fellow plaintiffs in 2013 and the $1.68 billion currently in question.
- Sponsoring Sen. Tom Cotton (R-AR) Press Release
- Congressional Research Service (CRS) Legal Sidebar (Context)
- The Heritage Foundation (Context)
Summary by Lorelei Yang(Photo Credit: iStockphoto.com / FrankvandenBergh)