Act of Terrorism in the United States

TRIA

According to research about Act of Terrorism from the Federal Judicial Center:Despite these 1996 amendments, most plaintiffs with judgments against state sponsors remained unable to obtain satisfaction because, then as now, (a) the states in question typically do not engage in commercial activity in the United States and (b) any assets they might have in the United States are typically seized or frozen as a result of government sanctions. To overcome this hurdle, Congress subsequently enacted the Terrorism Risk Insurance Act of 2002 (TRIA), which created a temporary federal program of “shared public and private compensation for insured losses resulting from acts of terrorism” and (in § 201) specifically allowed for attachment and execution of terrorism judgments for compensatory damages against the “blocked assets of the terrorist party” (including those of its agencies and instrumentalities) which might otherwise have been immune.351 The simplicity of this formulation is misleading. Each of these elements is further defined in the statute, the relevant provisions have subsequently been amended, and their application has been the subject of continuing judicial interpretation, making this (to say the least) a challenging area to summarize. TRIA defined the term “terrorist party” to mean “a terrorist, a terrorist organization . . . or a foreign state designated as a state sponsor of terrorism.”352 Moreover, the enforcement of judgments provision only applied in cases based on (a) an “act of terrorism” or (b) an act for which the terrorist party lacks immunity under§ 1605(a)(7).353 These are separate requirements. The term “act of terrorism” was defined somewhat confusingly to mean either (a) any act certified by the Secretary of the Treasury, in conjunction with the Secretary of State and the Attorney General, as provided in § 102 of the statute354 or (b) to the extent not covered by the preceding clause, any terrorist activity falling within the definition of terrorist activities, excluding certain classes of aliens under the Immigration and Nationality Act (INA).355 Violence failing to meet the criteria in one or the other accordingly does not qualify as an “act of terrorism” for TRIA purposes.Finally, TRIA defined the term “blocked assets” to include, in pertinent part, “any asset seized or frozen by the United States” under the authority of relevant sections of the Trading With the Enemy Act (TWEA) or the International Emergency Economic Powers Act (IEEPA).357 At the same time, it explicitly excluded property subject to a license issued by the U.S. government under IEEPA or the United Nations Participation Act.358 For several reasons, these TRIA provisions were less than effective. Generally, determining whether particular assets are blocked requires reference to Office of Foreign Assets Control (OFAC) regulations.359 When they are blocked, transactions in those assets are prohibited, and the assets may thus not be available to judgment creditors of state sponsors regardless of any sovereign immunity shield. When transactions have been licensed, the assets are “unblocked” to the extent of the license and thus by definition outside of TRIA § 201.360 One purpose of TRIA, of course, was to override OFAC’s regulations and permit attachment and execution even when no OFAC license had been issued. In any event, few assets of state sponsors that could be blocked remain in the United States. Moreover, TRIA excluded property used exclusively for diplomatic or consular purposes and thus entitled to immunity and inviolability under the Vienna Conventions.361 As a result, the practical impact of TRIA was limited.

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Execution of Judgments in § 1605A FSIA Cases

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According to research about Act of Terrorism from the Federal Judicial Center:When the FSIA was amended in 1996 to include the state-sponsored terrorism exception to jurisdiction in § 1605(a)(7), a parallel provision was included regarding enforcement of judgments rendered under that section. Thus, § 1610(a)(7) was added to permit execution of judgments related to claims for which foreign states were no longer immune under the new provision, but it allowed execution only against property of that state used for commercial purposes in the United States “regardless of whether the property in question was involved with the act on which the claim was based.”348 Under the amended § 1610(b)(2), property in the United States of an agency or instrumentality of a foreign state engaged in commercial activity in the United States was no longer entitled to immunity from execution, or attachment in aid of execution, upon a U.S. judgment relating to a claim for which that agency or instrumentality was not immune by virtue of §§ 1605(a)(7). This was true regardless of whether the property was “involved in the act” upon which the claim was based at any time. In addition, the 1996 amendments included a provision permitting execution against frozen or diplomatic assets of state sponsors of terrorism. Section 1610(f)(1) provided that, notwithstanding any other provision of law, “any property with respect to which financial transactions are prohibited or regulated” under various statutory authorities, including the Trading With the Enemy Act (TWEA) and the International Emergency Economic Powers Act (IEEPA), was made subject to execution to satisfy any judgment relating to a claim for which a foreign state or its agency or instrumentality was not immune under § 1605(a)(7). However, recognizing that such execution could cause significant foreign policy issues, the amendments also explicitly authorized the President, in the interests of national security, to waive that provision, which he did right after it was enacted.350 Section 1610(f)(1) has never become operative. Note: FSIA is the acronym of the Foreign Sovereign Immunities Act of 1976.

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Post-TRIA legislation

According to research about Act of Terrorism from the Federal Judicial Center:When the FSIA was further amended in 2008 to replace § 1605(a)(7) with § 1605A, the additional modifications were made with respect to judgments.362 The most important changes were made by adoption of § 1610(g), in which Congress further expanded the category of property subject to attachment for cases involving state sponsors. The first major change was to eliminate (for judgment purposes) the distinction between the state itself and its agencies or instrumentalities. Thus, § 1610(g)(1) provides that both the property of a foreign state against which a judgment is entered under § 1605A and the property of an agency or instrumentality of such a state (including “property that is a separate juridical entity or is an interest held directly or indirectly in a separate juridical entity”) are subject to attachment and execution.363 In addition, the statute states that this amenability to execution is to be determined regardless of (A) the level of economic control over the property by the government of the foreign state; (B) whether the profits of the property go to that government; (C) the degree to which officials of that government manage the property or otherwise control its daily affa
irs; (D) whether that government is the sole beneficiary in interest of the property; or (E) whether establishing the property as a separate entity would entitle the foreign state to benefits in United States courts while avoiding its obligations.364 The property must still be used in commercial activity, but the distinction between states and their agencies and instrumentalities is attenuated. Judgment creditors proceeding under § 1610(g)(1) must nonetheless establish that the entity in question meets the requirements of “agency or instrumentality.”365 At least one court, however, has declined to give this provision a broad reading. The 2008 amendment’s second change addressed the issue of blocked assets. Under § 1610(g)(2), the fact that the U.S. government has regulated the property in some way, such as through enforcement under the Trading with the Enemy Act or the International Emergency Economic Powers Act, does not shield it from execution. Finally, in an evident effort to provide a measure of protection to uninvolved third parties with interests in the property in question, § 1610(g)(3) reserved the authority of a court to “prevent appropriately the impairment of an interest held by a person who is not liable” in the underlying action under § 1605A that gives rise to the judgment in question.

Act of Terrorism

Act of Terrorism in the United States

TRIA

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Execution of Judgments in § 1605A FSIA Cases

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Post-TRIA legislation

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