good morning your honour's i'm susan smith representing the appellant's the leavens your honors this is an important case is a district court recognized and entering the fifty four b judgment it's important because district courts are struggling with trying to apply hausler and calderon to these and assets it's an interesting case because were pleading cases the court is very familiar most of the cases come up on a summ that set some sort of rule that if a correspondent bank was the transmitting bank into new york then that came under this court's prior precedent and therefore those assets were not property of iran so i think we look first and we look at trade and we and sixteen ten and we say clearly and j p morgan in the district court agree i believe that assets of blocks asset of iran or its agencies or instrumentalities would be subject to execution and collection no question about that that is what we plead we plead that these are assets of iran we have  are pleading that we're asking the court to take our pleading says that the bank lloyds bank of london which did the transfer it is not an intermediary bank which was the language that this that this is a right of property case which is fact rich which the second circuit recognized in hausler in calderon that there were cases where it wasn't stipulated what the relationships were between the very in various entities so it's a it's a property law case in and hausler and calderon the the second just the second circuits said that in the case of north korea and in the case of cuba the regulations that create the basis for the blocking do not include the iranian regulations are different they include any financial instrument which we would argue includes it's tended to be broad in the case of iran iran is a different relationship to the united states than cuba or north korea and we would argue federal law blocking regulations would answer the question that these blocked assets and your honour's they are blocked assets they're called iranian blocked assets because the originator was the national bank of iran bank saad rot which has been held in j p morgan in the district judge did not dispute that that is a terrorist entity on the list so the whole question here is is the property that's in the hands of lloyds bank of london at the time that it comes into the united states property of lloyds bank of london or is it property of banks solder right we say we believe and by the way we didn't just make this up but we went we research we look at what lloyd's publishes their relationship is with correspondent banks they plead their agents that sort please they they publish that their agents like that they published that they do general activities for the correspondent banks and most importantly that the money that they take and put into these accounts different from this fleeting you know very quick run through of the normally have to you are just got a bunch of banks in line they're not banks that have established relationship with the other bank we say correspondent bank the money remains the property of bank saw iraq the u c c says you can vary your relationships your commercial relationships can be varied by contract oral cock up particular decision that argument made more difficult by our decision and that the contractual relationships and such a meaningful is to take it out of our holding and hausler you mean the district court holding the district court without analyzing correspondent banks at all makes a statement correspondent banks are the same thing as intermediary banks we say there's nothing in the u c c that says that there's no opinion of this court that says that and that is a factual question what is a correspondent bank what is the relationship the correspondent bank to the eight to its principle that it is acting on behalf of that is fact rich as you said an in house learned coldiron when there are disputes like that the district court needs to grant the amendment and then let us do the discovery and build the factual record to present to the district court and to this court as to whether or not the property is property of banks saw to rot when it comes into the united states if it is your honor th tria and sixteen tend to say those assets are collectible so i think that distinguishes it and i don't think there's any ruling of this court that there's some there's some law that says what a correspondent bank is it can vary by the arrangements of the parties and your honor i think maybe what you were asking was can you can the parties somehow make a difference in the ownership and the and the answer to that is the you to me that you use agent and agency of meaning the same thing can a bank do a service for me for example as my agents and money somewhere without being my instrument do your my agency or do the two things here are i think they're very close again think that's a fact or a rich question so if we had been allowed to amend we would have then presented the evidence as to exactly the facts about iraq and whether or not they meet the definition of agent and agency there was no case i could find that made a distinction between those two in the in the terrorist litigation that made a distinction and said oh well you're an agent but you're not an agency of the terrorist entity but that would be a question your honor that i think would be explored down below but it definitely was not the basis for the ruling by the district thank you  p morgan has absolutely no interest in impeding their collection efforts j p morgan has turned over substantial sums of money to the levins and other judgment creditors in the past but the bank can not bank must follow the law and the bank cannot knowingly turn over block asset that is not subject to execution under governing law and that is precisely the case here the question presented is whether or not proposition that the only entity in the wire transfer chain that has a property interest in a blocked account is the entity that preceded the blocking bank in the chain in this case that entity that preceded j p morgan which blocked the account was lloyds bank and lloyds bank is undisputedly not in instrumentality of iran and therefore under houser and called around that is the end of the intermediary banks attempted to say one thing to do with these funds will throw our hands up and and we don't want anything to do with them and indo then tried to argue that in that instance that what we're really dealing with was the funds of the terrorist entity and therefore they should be subject to seizure and the court rejected that argument and and the the issue and goes a little different from the issue here and i understand but and so if if the court has ruled that a a  correspondent or intermediary banks disclaimer of an interest in block funds when it would otherwise under house there were cops called around to the ne to the with the property interest in those block funds the disclaimer by itself does not cause the property interest to revert back upstream to the originator here you don't even have a disclaimer by by bank or lloyds bank so they force you or i believe this case i easier to decide and the there is in terms of the question of whether there's a distinction between a corresponding bank in an intermediary bank which is appellants princip argument the answer is no those were those are those words are basically used interchangeably a correspondent bank becomes a needed intermediary bank once a day and once it commences the electronic funds transfer doesn't correct  very nature of why you have a correspondent bank because they have a relationship in new york that's correct the correspondent bank is is brought into the picture in order to create a relationship that otherwise doesn't exist so that the series of credits and debits can continue on down the chain what do you say to their argument that they should have been allowed to amend to show that the the agency relationship and that therefore this was truly them the money of the iranian bank all correspondent banks tria but whether it's an age or not is irrelevant under house or called the house and called run simply look to see what is the entity or who is the entity that preceded the blocking bank in the wire transfer chain and if this is not a pleasant task for anyone there are times when the oath pinches the the resolution of this is that is it in your view is the resolution of this by executive order or act of congress broadening the authority with regard to the sea the ability to seize assets of of terrorists entities probably yes to look beyond what seems like an artificial distinction of an intermediary bank and an agency relationship on the step if one could establish the agency relationship to allow the funds to be seized because they truly are the assets of a terrorist entity  unless this court were to reverse itself or or change the standard that was established in house and called around then yes i think congressional action would be the way to to change the standard a little trouble understanding of the facts in this respect it really should judge wesley's questions i think a moment ago if execution were permitted where was the who is out the money and why who is out the money bank is out the money i couldn't quite tell when this game of musical chairs stopped in the federal office issued its blocking order where the credits had the debits were located and well ultimately the party that is out the money is the beneficiary of the wire transfer you have a transfer you have intended to transfer of funds from the originator ultimately to the beneficiary when those funds are blocked then  the entity that moves it's does not get the money it was supposed to get as a beneficiar j p morgan have no no company interest in this in this process there they're going to be home no matter what they do not have property interests in the in the  no they are they are simply intermediary banks that facilitate the transaction it's it's obviously they're there in the business to make money there are fees associated with corresponding  banking but they do not have a property interest in the funds themselves whether blocked or on block but except as to in a situation like this where funds are blocked then the property interest is with the entity that perceives the blocking party and wire transfer chain that was by three million dollars or no under these circumstances no there no again it would only be the party that was intended to receive i think it's clear but just so it's just so it's underlined this is about money laundering in violation of u s law and the blocking of assets which is already happened by ofac j p morgan carries it out and calderon created an exception whether i understand it or not or at least its policy it says as i read it that if it's an e f where the property ownership is not occurs the question is who owns it so therefore who can whose is it to be seized yes sure look them because there was no definition of who owned it and federal law we had to look to state law and state law new york law tells us that it's the property of the intermediary bank and well looking at the u s looking at there was any policy choice made by judges it was a simple calculation judges didn't necessarily enjoy doing that i had they had they had something to do so tell me in the states tell me how this is different because it's a correspondent bank or because there's an agency relationship because those things already existed in prior circumstances tell me in federal law how this is different tell me where there's a regulation language that broadens the scope of the of the ability to seize so the so two things so when you look at the iranian regulations which are different than either the cuba or the north korean regulations there is broader language it reaches all financial instruments or financial instruments so the iranian regulations sweepin more they are different than the cuba and the north korean and your honor on the on the u c c question though the question of a variation by contract under the u c c was simply not decided by the second district they agreed that these were intermediary banks that came under the off the rack rule of the