how are the apple lease dividing their time we have some soccer fans exiting the courtroom mia please the court my name is john morton i'm here with seth miles and we represent john doe who holds a judgment against a terrorist organization the fork for heinous crimes committed against them who are seeking to collect on that judgment purs execution in order to satisfy such judgment this mandate is not withstanding any other provision of law given this clear mandate we identify block funds that were the result of wire transfers originated by agencies or instrument the fork and we've attached and moved for turnover of those assets but were denied on the grounds that this court's decisions and calderon cardona and hausler precluded execution those two cases held th state law is looked to and not preempted on the question of who owns the blocked assets and we do not challenge that aspect of those holdings what we are appealing is the district court's holding that calderon cardona and hausler mandated it to find that the trans many banks are the owners of the assets under the facts of this case and which the transmitting banks specifically disclaimed any interest in the funds and we submit that the court's decision was erroneous for two reasons first different facts yield different results the question is not who on the assets of the facts of calderon krone but who owns them under the distinct facts presented here it simply makes no sense to find the block funds belong to the only two parties on the planet that specifically swear that they do not the stipulations are effective under state law in preclude a contrary finding and indeed and to post calderon hausner cases gates and bureau which we cited extensively the court specifically analyzed the impact of those two cases on situations where the transmitting banks it either waves or disclaim interest in the blocked accounts and they held that they did not prevent collection of block transfers originated by blocked entities we believe that the only way to avoid the impact of these controlling stipulations is to argue as the government has that these simple statements of non ownership are themselves pretty transfers we believe that is wrong for three reasons first saying these are not my funds is not a transfer the stipulations are premised upon the preexisting fact that the banks do not own the assets  disclaim property that way but what's happening here your honor is that the if you look at the language of the disclaimers themselves and it's in the record a one thirty four the credit suisse stipulation they state in the ass credit suisse however disclaims an interest of any kind in the blocked account and then there are accordingly prepared to enter into the stipulation relinquishing any claims in this matter and so what follows the preamble credit for us doesn't say that it ever had an interest it's saying we're disclaiming whatever interest we might have if any you know what they're saying at the moment that they they're not denying that the ever had an interest what they're saying is we're asked we have no interest so at that moment in time they thought they did not have an interest and this leads to my second point the reason they didn't have an interest is because the the by the time they made based on the possibility of recall or a claim under the u c c and that is what this court recognized in calderon cardona but s calderon cardona also recognized the property right vests in the mid intermediate banks only quote briefly and that's an calderon at ph thousand one thousand and one now how brief and you look to the u c c to figure out how brief that is and the u c c provides one year for originators to challenge a wire transfer after that  chance that these banks will be subject to a recall order that would force them to refund the banks that the funds they had received and that's the only instance that they would need to get the funds back per the u c c and they no longer have so they no longer have the property interest that was created by the u c c and so they enter into these stipulations without any consideration the u c c provides clarity and finality to wire transfers the one year statute of repose is crucial to that fact and we cited the case of regard to those the north were bank for that proposition and by the way because the funds do not in fact belong to credit suisse in this situation there's no harm that's going to come to credit suisse from the result that we seek here and there's no chance that a judgment against a terrorist party is going to be paid by anyone other than that terrorist party now the third reason these these stipulations are not prohibited  if these were the transmitting bank's funds and they were not they would not be prohibited transfers because the blocking statute section five hundred four to one states that it is property an interest in property of the following persons cannot be transferred in the following persons are defined in sections a one to five ask especially does the designated nationals the stipulations are between credit suisse and j p morgan they say one credit suisse says we have no interest in this has to therefore we won't sue you if you turn them over to john doe this is clearly not a transfer of a block to entities interest because even if these assets belong to credit suisse at that moment credit suisse is not a terrorist  now we believe that there's evidence in the case that in the record that shows that the banks and the government actually agree with oss first the government is not prosecuting j p morgan chase bank credit suisse or the lawyers involved in drafting these stipulations in the lawyers obviously had no fear of prosecution because they entered into written stipulations that they never would have if they would have thought these were provided transfers that was subject them to twenty years in prison for appendix two eighty nine to ninety two ninety five if those funds were the sole property of the transmitting bank the government would not have filed a verified complaint to forfeit it we submit that the government's position perverts the express mandate and purpose or tr a and it should be allowed to take contrary positions to achieve this result obviously the court felt constrained from considering the distinct facts of this case and light of the stipulations the court should look to other aspects of new york law to determine who has property rights in the block funds and we cited to the court the cases of share bonnett the american express and you should merrill lynch which stand for the proposition that other sources of law and not just the u c c should be looked to determine the ownership of wired funds so the u c c isn't the only thing that the district court could have looked to the district court thought that was the only thing that looked to but there's other second circuit precedent that says you can in some situations look to equity look to abandon property law something else in new york law to try to determine who owns these assets and we submit that that's appropriate in the situation where we have these stipulations that according to new york law according to procedure cannot be avoided and that's what courts did in two prior settings now we believe that this court did not intend to limit a district court from considering a stipulations impact on an ownership or any other relevant aspect of new york law morning your honor stephen fighting down on behalf of j p morgan chase bank at the outset your honour's i want to express on behalf of j p morgan chase our sympathy for mr doe and other terrorist victims and bank has absolutely no desire to impede mr doe's enforcement efforts but we have to follow the law in in the banks he who owns the funds th transmitted the funds this is in accordance with hauser and calderon the banks the transmitted the funds to j p morgan and those with the direct transmission and they say we don't want on these and on our phones based they disclaim an interest in the funds correct however that disclaimer is does not constitute or does not serve as a or have the effect of transferring that ownership interest back upstream to the originating banks that's clear does it go that's my question given that the transferring banks have disclaimed that's the money is it deemed to bandon property and it goes to the state of new york is that what will happen ultimately that may well be what happens correct but that's that is law that is law based on on hausler and calderon of the difference is that what your opponent wants to do is say that by the by the disclaimer somehow that reince or as the original the individual that gave the order with regard to the transfer and and your view is that that doesn't accomplish that all it says is the banks are just a slaving whatever interest they haven't that's that's correct there are two points when we first of all when we enter into a stipulation like that with with an entity like credit suisse  i united of the purpose of that stipulation is to remove those entities as potential claimants to the account in question that's the sole purpose the purpose is not to effectuate a transfer of that property interest back upstream and the office and they want to back we know the money stays where it is and we're required to keep the money where it is the regulations at issue here make very clear that no transaction in this case the entry into those stipulations can have the affects of shifting the property interest elsewhere and that's not the purpose of these stipulations the purpose is what i just articulated but even if that were the purpose that effect or that transfer would be null and void under section thirty one c f r five nine four two zero two and another point that the plaintiff raises is well that doesn't apply here because the the the entity in question whether it's credit suisse is to want to carry out or a l i as to the other account is not a instrumentality of the far well that's true however when you look at five ninety four three zero six which defines what an interest here is it's under these circumstances and interest is defined as with respect to property as any as an interest of any nature whatsoever direct or indirect that is not that is a much broader interest than a property interest as defined by house or and called around so that that provision that definition of interest clearly applies here to the actual instrument which is that an account a block asset or a block wire transfer to be more specific is subject to execution under other tria section two or one or fs on a section sixteen tangy only if the judgment debtor or an instrumentality there of directly transmitted the wire transfer to the block to the a case to the bank that blocked the wire transfer in this case j p morgan there is nothing in those decisions that suggests that if that direct transmitting bank disclaims subsequently disclaims an interest in the blocked fines functionally isn't this equivalent if the transferring bank takes itself out of the picture by disclaiming aren't we left with essentially the situation that you just contemplated well first of all what happened if if if if if this were not a terrorist organization in a situation like this the money would go back upstream i gather well if this if this were not a terrorist situation then tria e n f i think we do have to i would not be applying here some how certain called run without a plan but the attachments against e f t s judgment creditors were constantly because we had a case that said that you could attach those things and we reversed that position and so then the question becomes is it is the property of the bank the intermedia morning may please the court my name is paul sasso i represent commerzbank a g i rise this morning only briefly to reinforce the point that although commerzbank had not progressed quite as far as j p morgan before the district court in that it had not yet filed an interplay or action or given notice to other wire transfer parties all of the parties here agree and have stipulated below commerzbank stands entirely in the same shoes as j p government peter aronoff u s attorneys office southern district of new york for the government the government has appeared as an advocate in this case to ensure that its sanctions regulations are properly interpreted and enforced by the courts the same effect regulations that required these e f t s to be blocked in the first place also prohibit and nullify any transfers of blocked property for that reason the intermediary bank's ownership interests could now excuse me could not be  one c f r section five ninety four three one to as a transaction the effect of which is to when i'm lighting here surrender or alter directly or indirectly any right or interest in black property and so a disclaimer falls within that definition and therefore is a transfer that is part once the property is blocked under section five ninety four to one so what so under state law which under state law this is property it is that's federal law certainly did with regard to the ability to block it did not that federal law in law overrule state lawyers to the fact that the intermediary bank on the property as  with respect in southern cardona and hausler this court held that state law controls the question of who owns the property at the moment that it's blocked under several federal law then comes in and determines what what may be the main point was that the funds were not the property of the terrorist entities and so they they could not be attached as the government concurred with the analysis that was not the property of the tears and yes the government not in our brief and addressed that question i do know that i think back to my involvement with sixty fifth avenue in the iranian assets and the mall the foundation those instances where the government is the same time was pursuing seizing assets of the iranian government well and victims of terrorist activities you sought redress under the t r a and so i could i could have vision a circumstance where you would be looking for assets and victims of terrorist acts would be looking for us and you're saying to me that you can block those assets but nobody has a right to claim them after they've been blocked well respectfully your honor the purpose of blocking and sanctions regimes generally  is in the first instance to prevent various entities in this case we're talking about terrorists but but you know foreign countries in some cases for making use of the american financial system at all the fact that these e f t s wound up  is denying them the use of it as opposed to seeking innocents you know so the government satisfied with the fact that this this money ends up literally in a limbo and of no use to anyone well as there are the money can eventually license for funds to be transferred or delton or to generally permitted trade with atlanta to be available to mr doe i consulted with ofac in this case and they're not aware of any reason why mr doe could not apply abandoned property and it's its chief of the state of new york well the the operation of abandoned property law is also under a fax reading of its own regulations that is also barred as a transfer but so for completeness we wanted to make sure that this was in there in any event ofac does license the state of new york and other states to administer abandoned property regimes with respect to block funds and there is a government's position which would seem to undermine that purpose tree a tree is designed only to as this court held in hausler only to permit attachment of a certain subset of blocked assets it's those blocked assets that are the property of a terrorist and there's good reason for that holding it would be improper to compensate a terrorism victim with someone else's property other than the terrorists own prop the money came from the listed organizations here in the first place it's not as if you know unless they got it from somewhere else is that the concern so is this in this particular instance i recognize that it seems that the property that the terrorist actually owns is an important principle that applies to all other you know any kind of property interests including real property of which the terrorist might only be partial or you know have some some small stake in it would be know honors first i want to address the issue of the remedy of applying for a license the point of tree was to get around that process because the government wasn't giving licenses so congress saw a problem and said you can execute against these blocked assets without a license now it's conceptually what happened with the court's decision the court did not rule that under new york law these these assets a shape to the state the court ruled that it was constrained from considering any other holding other than that these assets belong to the transmitting bank now we think that was here because of the stipulations we think a stipulation is valid under new respectfully your honor the culture in corona's holding was that to the question of ownership that i've read a million times the question of ownership state law controls and that's the government but there's a thing called the supremacy ofac the old fact th ere was no calderon didn't deal with the implications of a stipulation attempting to renounce the interests that calderon recognized calderon was simply well there are a number of issues there because north korea is on  off the list so calderon wasn't trying to figure out the wrinkle that you have in your case which is the way exactly your honor calderon has decided on the facts before it and those facts included one that there was no stipulation of no ownership enter into the court was not made aware of the fact that in fact this ownership right which is based on the right to recall had expired and we submit that the court should have considered that aspect which we raised to the court and that the court should have then if it had plot a plot in new york law it could have said oh this is a bandit if it doesn't shape to the state now it's a custody state client i totally get it and we've seen a lot of these and i basis because the world does business in dollars and so i'm very very reluctant to interfere with a system that's very carefully calibrated and create exceptions which we have done do with regard to like we did had done do in the cases because process controls but in issues of ownerships the law in new york controls the government would have you apply federal law on the issue of ownership and we believe that that's fair as far as the point where we have a supply federal law with regard to the and its implications not with regard to who owns it but would say what are the implications of renunciation you know and that's i think that's an issue of federal law your honor it's a question of state law whether whether they owned it to begin with and if you look at the stipulations they say because we don't have an interest then we will run out and they did that because they knew at that moment why would you say i'm renouncing eight hundred thousand dollars the reason was because they knew they would never have to pay it back up the stream because the one year had passed it was something they would never have a cost to get back you know thank you we'll reserve decision you very much all of you thank you remaining cases are