August 5, 2015
A group of American victims of Iranian terrorism holding around $1.5 billion in US court judgments against it filed a motion on Wednesday to enjoin the Obama administration from releasing an estimated $100 billion in frozen Iranian assets.
Coming at one of the highest stakes diplomacy time periods in recent memory, the motion injects itself into an already heated Congressional review of the Obama administration’s historic agreement negotiated with Iran.
Among other things, the deal eventually requires lifting US and world economic sanctions and unfreezing the $100 billion of Iran’s assets in return for Tehran reducing the footprint of its nuclear weapons program.
The Shurat Hadin – Israel Law Center motion said that under the deal the US has pledged to unfreeze the funds belonging to the Central Bank of Iran (CBI) held primarily in overseas accounts, and to delist from sanctions lists (according to the NGO) the Iran Revolutionary Guard-connected Melli, Mellat and Sepah banks.
A press release by the NGO stated that “the families claim that releasing the funds will preclude them from ever collecting on their judgments and deprive them of the only leverage they have to make Iran pay.”
Shurat Hadin’s statement said that the judgments stem from deadly attacks, including suicide bombings and drive-by shootings, committed from 1995 through 2006 by Hamas, Hezbollah and Palestine Islamic Jihad, Iran’s terrorist proxies, in which the terror-victim plaintiffs were harmed.
Highlighting the importance that the frozen assets could have for Shurat Hadin, it noted in the motion that until now and absent leverage like the only recently (relative to the decade-long collection attempts) frozen large assets, it has had very limited success collecting on judgments against Iran.
It has successfully seized two houses over the years, but that is a drop in the bucket compared to the $152 million in compensatory damages and the around $1.5 billion in total overall damages.
In September 2014, Shurat Hadin made one of its most ambitious attempts at collecting on the judgments, moving to seize Iran’s internet assets, including all the “top-level domain” (TLD) names, such as .ir TLD, the ایران TLD, and all Internet Protocol (IP) addresses being utilized by the Iran.
In an unprecedented move, it filed subpoenas to produce documents related to the internet assets on the Internet Corporation for Assigned Names and Numbers (ICANN), an agency of the US Department of Commerce in Washington, DC, which is administrator of the World Wide Web.
That move, like many others, was rejected in court, though the rejection is on appeal.
Showing the importance of access to overseas assets, the closest Shurat Hadin ever came to collecting a large portion of the judgments was when Iran unusually appeared (in the US it does not usually even show up in court) for a hearing in Italy in 2004 to free up $500 million in assets that the NGO was baring down on.
Honing in on the core legal issue, the motion stated that “Congress has provided” that Iran sanctions “shall terminate if the President submits a certification to Congress that ‘the Government of Iran has ceased providing support for acts of international terrorism and no longer satisfies the requirements for designation as a state sponsor of terrorism.’”
Shurat Hadin cites Section 401 of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 as applied to later aspects of the US’s complex Iran sanctions regime, which include the Iran Threat Reduction Act of 2012 and the National Defense Authorization Act FY2012.
The NGO argues that the Obama administration has not certified that Iran has stopped supporting terrorism and has indicated it will unfreeze the funds in dispute without such a certification as long as Iran complies with reducing its nuclear program activities under the nuclear deal with the US and other world powers.
Two dozen plaintiffs filed the motion in a US federal court in New York as part of a spin-off lawsuit from the original case in which they have already won against Iran.
The spin-off case names US State Department and Treasury Department as well as Secretary of State John Kerry and Treasury Secretary Jacob Lew as respondents.
While the case could impact or slow down aspects of unfreezing the funds , the US government has many potential outs to sideline the case, such as releasing all but the around $1 billion owed, aside from defending its primacy in matters of foreign affairs.
The Obama administration recently won a resounding confirmation of that primacy when the US Supreme Court rejected Congress’ attempt to force the US State Department to let Americans born in Jerusalem place “Israel” on their passport as their country of birth.
In addition, while Shurat Hadin presents lifting sanctions as contradicting Congress’ instruction and as a separation of powers issue, the Obama administration has already argued that it can remove a wide range of sanctions by Executive Order without even implicating Congressional legislation, which it says often merely backed US government policy.
Further, the US government could argue that almost all of the assets are not directly under US sovereignty.
The lawsuit and motion were filed on behalf of the terror victims and their families by attorneys Robert Tolchin of New York and Shurat Hadin’s Nitsana Darshan-Leitner who represent the families.
The NGO wrote that the “families of the terror victims also fear that the released billions will be utilized by the Iranian Revolutionary Guard, which provides financial support and weapons to the terrorist groups, to fund waves of future rocket and bombing attacks.”
“They are adamant that other innocent American families will not endure the tragedies their families suffered,” said the NGO.
“It would be outrageous to release the $100 billion in frozen Iranian funds when these American families have unpaid court judgments against the terror sponsoring regime in Tehran” stated Nitsana Darshan-Leitner.
“For more than a decade Iran has refused to pay these court judgments and has thumbed its nose at these terror-victim families and the U.S. court system. The $100 billion in frozen funds is the last leverage the families have to compel Iran to satisfy their judgments. If you release these funds you erase all hope for the families of ever getting a measure of justice against this outlaw regime.”