United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 12, 2022 Decided August 16, 2022

No. 21-7036

ESTATE OF JEREMY ISADORE LEVIN, ET AL.,

APPELLANTS

v.

WELLS FARGO BANK, N.A.,

APPELLEE

Consolidated with 21-7041, 21-7044, 21-7052, 21-7053

Appeals from the United States District Court

for the District of Columbia

(No. 1:21-cv-00420)

(No. 1:05-cv-02494)

(No. 1:21-cv-00126)

(No. 1:21-cv-00127)

(No. 1:21-cv-00128)

Suzelle M. Smith argued the cause and filed the briefs for

Levin appellants. 

Matthew D. McGill argued the cause and filed the briefs for

appellants James Owens, et al.

Myanna Dellinger, James Dodge, David Horton, and
2

Jeffrey Stempel, pro se, were on the brief for amici curiae

Commercial Law Professors in support of Levin appellants.

Alex C. Lakatos argued the cause and filed the brief for

appellee Wells Fargo Bank, N.A.

Brian P. Hudak, Assistant U.S. Attorney, argued the cause

and filed the brief for appellee United States. Jane M. Lyons

and Peter C. Pfaffenroth, Assistant U.S. Attorneys, entered

appearances.

Christopher D. Man was on the brief for amicus curiae

Crystal Holdings Limited in support of neither party.

Before: PILLARD and WALKER, Circuit Judges, and

RANDOLPH, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge

RANDOLPH.

Concurring opinion filed by Circuit Judge PILLARD.

RANDOLPH, Senior Circuit Judge: These consolidated cases,

on appeal from a judgment of the district court, present

competing claims to a blocked electronic funds transfer. The

parties are, on one side, the United States, which blocked the

transaction because terrorists initiated it. On the other side are

victims of Iran-sponsored terrorism who have obtained multimillion dollar judgments against the Iranian government.

Taif Mining Services, LLC, an Omani company, initiated

the electronic transfer to consummate its purchase of the Nautic,

an oil tanker registered in Liberia. Crystal Holdings Limited, a

Liberian subsidiary of a Greek company, was the seller. A law

firm, Holman Fenwick Willan LLP, based in London, facilitated
3

the sale.

The U.S. Treasury Department’s Office of Foreign Assets

Control (“OFAC”) maintains a list of “Specially Designated

Nationals and Blocked Persons.” See Exec. Order No. 13,224

(2001), as amended by Exec. Order No. 13,886 (2019); 31

C.F.R. § 594.201. OFAC listed the Islamic Revolutionary

Guard Corps. Two members of the Iranian RevolutionaryGuard

formed Taif Mining in an apparent attempt to hide its affiliation

with the Islamic Republic of Iran. Taif Mining itself is now on

OFAC’s list.

Taif Mining initiated its electronic funds transfers to Crystal

Holdings pursuant to a sales agreement for the Nautic. The

Holman Fenwick law firm served as the parties’ escrow agent. 

Taif’s downpayment of $2.34 million moved through the

international financial system in September 2019 and reached

Crystal Holdings’ Swiss bank account without interruption.

In October 2019, Taif Mining wired Holman Fenwick $9.98

million, the balance of the Nautic’s purchase price. Holman

Fenwick deposited the funds in its escrow account at Lloyds

Bank PLC, in London. Taif directed the law firm to send, “[f]or

and on behalf of Taif,” the $9.98 million to the Credit Suisse

account of Crystal Holdings in Switzerland. Taif also instructed

Holman Fenwick to use Bank of New York Mellon as the

“intermediary bank” for the transfer. Whether Holman Fenwick

relayed this instruction to Lloyds Bank is not clear.

We have described before how funds are transferred

electronically through intermediary banks when the parties to

the financial transaction have accounts at different banks. See

Heiser v. Islamic Republic of Iran, 735 F.3d 934, 936 (D.C. Cir.
4

2013). Here, the bridge between the Lloyds Bank of London 1

and the Credit Suisse Bank in Switzerland was the Wells Fargo

bank in New York.

The $9.98 million electronic funds transfer was blocked in

the instant after Wells Fargo debited its Lloyds account but

before it credited its Credit Suisse account. The blocking was

done pursuant to 50 U.S.C. § 1702, and Executive Order No.

13,224 (2001), as amended by Executive Order No. 13,886

(2019). How federal authorities were able to anticipate the 2

transfer and act before its completion is not disclosed. After

blocking the transfer, Wells Fargo placed the funds in an

account in South Dakota, as the bank apparently does with all

Heiser described the role of intermediary banks with this 1

example:

Suppose O wants to transfer $100 to B. If O and B

have an account at Bank X, then the transaction is

simple. O can instruct Bank X, which will debit O’s

account and credit B’s account with $100. But

suppose O has an account at Bank X, and B has an

account at Bank Y. Unless Banks X and Y are

members of the same lending consortium, they must

involve a third “intermediary” bank with which

Banks X and Y both have accounts. The transaction

would proceed as follows: (1) O instructs Bank X to

pay B; (2) Bank X debits O’s account and forwards

instructions to the intermediary bank; (3) the

intermediary bank debits Bank X’s account, credits

Bank Y’s account, and forwards instructions to Bank

Y; and (4) Bank Y credits B’s account.

735 F.3d at 936.

The TreasurySecretary’s authority to block terrorist transactions 2

has been delegated to the Director of OFAC. 31 C.F.R. § 594.802. 
5

blocked assets.

Months later, in May 2020, the United States filed a

forfeiture action for the blocked funds. United States v.

$2,340,000.00 Associated with Petroleum Tanker Nautic, No.

20-cv-1139 (D.D.C. filed May 1, 2020); see 18 U.S.C.

§ 981(a)(1)(A), (C), (G)(i). The Wall Street Journal reported 3

the government’s forfeiture action and its indictment of the two

Iranians who were behind Taif. Mengqi Sun & Dylan Tokar,

U.S. Charges Two Iranians over Oil Tanker Purchase, Seeking

$12 Million Forfeiture, WALL ST. J. (May 2, 2020),

https://perma.cc/B75B-KMVT. The article stated that the funds

were being held at Wells Fargo. Id. 

After learning of the government’s forfeiture action,

attorneys for two groups of victims of Iranian terrorism and their

relatives, holding judgments against Iran, filed separate writs of

attachment in the United States District Court for the District of

Columbia. The Owens plaintiffs are victims of al-Qaeda’s 1998

bombings of the U.S. embassies in Kenya and Tanzania. They

have nearly $1 billion in judgments against Iran. See Order,

Owens v. Republic of Sudan, No. 01-cv-2244 (D.D.C. Mar. 28,

2014), R. Doc. 301; Order, Mwila v. Islamic Republic of Iran,

No. 08-cv-1377 (D.D.C. Mar. 28, 2014), R. Doc. 88; Order,

Khaliq v. Republic of Sudan, No. 10-cv-356 (D.D.C. Mar. 28,

2014), R. Doc. 40. The Levin plaintiffs obtained nearly $30

million in judgments against Iran for the 1984 kidnapping and

torture of Jeremy Levin by Iran-backed Hezbollah. Levin v.

Islamic Republic of Iran, No. 05-cv-2494, 2008 WL 11493474

As is evident from the case title, the United States also sought 3

forfeiture of Taif’s downpayment, which is now in Crystal’s

possession.
6

(D.D.C. Jan. 14, 2008).4

Plaintiffs sought to attach the funds at Wells Fargo pursuant

to two federal statutes. The first, 28 U.S.C. § 1610(g) of the

Foreign Sovereign Immunities Act (“FSIA”), “subject[s] to

attachment” “the property of a foreign state . . . and the property

of an agency or instrumentality of such a state” against which a

plaintiff holds a judgment under 28 U.S.C. § 1605A. The

second, § 201(a) of the Terrorism Risk Insurance Act of 2002

(“TRIA”), Pub. L. No. 107–297, 116 Stat. 2322, 2337 (codified

at 28 U.S.C. § 1610 Note “Satisfaction of Judgments from

Blocked Assets of Terrorists, Terrorist Organizations, and State

Sponsors of Terrorism”), “subject[s]to execution or attachment”

“the blocked assets of [a] terrorist party (including the blocked

assets of any agency or instrumentality of that terrorist party)”

against which a plaintiff holds a judgment under 28 U.S.C. §§

1605(a)(7) or 1605A. Section 201(a) specifies that such assets

can be attached “[n]otwithstanding any other provision of law.” 

The United States intervened in both cases and moved to

quash plaintiffs’ writs of attachment. The government also

asserted that plaintiffs were attempting to circumvent the

“orderly administration” of the United States Victims of State

Sponsored Terrorism Fund. See 34 U.S.C. § 20144.5

After consolidating the cases, the district court ruled that

The Levin plaintiffs also filed writs of attachment in South 4

Dakota and in the Southern District of New York. Those proceedings

have been stayed pending the outcome of this case.

The Fund provides a means for victims of state-sponsored

5

terrorism to collect on their unpaid judgments through money the

federal government obtains from terrorist states and actors, including

through forfeiture proceedings. 34 U.S.C. § 20144.
7

Iran lacked any property interest in the blocked funds held by

Wells Fargo. The court therefore quashed plaintiffs’ writs of

attachment. See Levin v. Islamic Republic of Iran, 523 F. Supp.

3d 14 (D.D.C. 2021). The court based its ruling on the Uniform

Commercial Code Article 4A, and our opinion in Heiser, of

which more in a moment. 

The district court treated each transaction in this electronic

funds transfer as “a stand-alone agreement between sender and

recipient.” Id. at 21. By this the court meant that when an

electronic funds transfer is unsuccessful and an intermediary

bank is involved, the intermediary bank “is obligated to refund

payment only to the immediately prior sender.” Id. at 22. Thus,

the intermediary bank “has no obligation to” the entity that

initiated the transfer (the “originator”). Id. The originator must

recover from its own bank, that is, the bank that sent payment to

the intermediary bank. Id.

But for the blocking, the electronic funds transfer would

have moved this way:

6

Iran

Taif 

(ship buyer, 

originator

 & agent/

instrumentality

of Iran)

Holman 

Fenwick

(Taif’s law firm/

escrow agent, UK)

Credit Suisse 

(beneficiary’s bank, 

Switzerland)

Crystal

Holdings

(beneficiary/

ship seller, 

Liberia)

Lloyds Bank

(originator’s bank,

UK)

Wells Fargo

(intermediary bank,

US)

This graphic is drawn from page 7 of the Commercial Law 6

Professors’ Amicus Brief. 
8

Relying on Uniform Commercial Code Article 4A, and

especially § 4A-402, the district court “assume[d]” that Taif,

rather than the Holman Fenwick law firm, was the “originator”

of the funds transfer. Levin, 523 F. Supp. 3d at 21. The court

concluded that Iran (via Taif) had no claim to the funds at Wells

Fargo, and therefore had “no property interest” in them. Id. at

21–22. This was because Taif was not “the entity immediately

preceding the bank ‘holding’ the EFT in the transaction chain.”

Id. at 21 (quoting Calderon-Cardona v. Bank of N.Y. Mellon,

770 F.3d 993, 1002 (2d Cir. 2014)). That entity was Lloyds

Bank. Id. And so the district court held that in the absence of

any Iranian property interest (through Taif Mining) in the funds,

plaintiffs could not attach them under § 201 or § 1610(g) to

collect their judgments against Iran. Id. at 20.

Both sides in this appeal, relying on Heiser, have set forth

opposing views on whether, in light of U.C.C. Article 4A, Iran

has a “sufficient property interest” in the blocked funds. A

7

“sufficient property interest,” that is, to warrant plaintiffs’

attachments under § 201 and § 1610(g). 

The focus on Heiser is understandable. That case is similar

to this one. In both, OFAC blocked an electronic funds transfer

The Owens plaintiffs argue in the alternative that the U.C.C. 7

does not apply:

The U.C.C. was not designed to address terrorist

behavior, and Article 4A was specifically drafted to

prevent the interruption of funds transfers. But

halting transfers is the entire point of sanctions

blocking, and that is precisely what OFAC did in this

case. As a result, Article 4A is ill-equipped to

address the issues of ownership here.

Owens Appellants’ Br. 20.
9

when it reached an intermediary U.S. bank. And in Heiser, as

here, the plaintiffs relied on § 201 and § 1610(g) to collect their

judgments. But there the material similarities end. 

Unlike this case, the plaintiffs in Heiser were seeking to

attach funds at intermediary banks under § 201 and § 1610(g)

because the beneficiary’s bank was Iranian. OFAC’s blocking

had prevented the funds from reaching the Iranian bank. This is

why we described the Iranian banks as having only “a contingent

future possessory interest in the funds.” Heiser, 735 F.3d at

937.8

Pursuant to the U.C.C. Article 4A, the Iranian bank in

Heiser “was not the beneficiary or originator” and under “the

principles of Article 4A,” the blocking foreclosed any claim that

legal title had passed to the Iranian bank. Id. at 941. For this

reason and in view of settled common law principles, we ruled 9

The intermediary banks in Heiser never contested that funds 8

blocked at an intermediary bank, where the originator or the

originator’s bank was or may have been an agency or instrumentality

of Iran, could be attached using § 201 and § 1610(g). Heiser, 735

F.3d at 936 n.3. In fact, there were many “uncontested accounts” with

those characteristics that the banks requested the district court turn

over to terrorist victim plaintiffs. Id.; see Joint Appendix at 160–61,

257, 277–78, Heiser v. Islamic Republic of Iran, 735 F.3d 934 (D.C.

Cir. 2013) (No. 12-7101); Third Party Petition Alleging Claims in the

Nature of Interpleader at 3–4, Heiser v. Islamic Republic of Iran,

00-cv-2329 (D.D.C. Aug. 31, 2012), R. Doc. 235. 

 We described the common law thus: 9

If a debtor merely holds property as an intermediary

for a third party, but does not own the property, then

a creditor cannot attach it. See Carpenter v. Nat’l

City Bank of Chi., 48 App. D.C. 133, 134–35, 136
10

against the plaintiffs. In our view Congress, in § 201 of TRIA

and § 1610(g) of FSIA, could not possibly have “intended

judgment creditors of foreign states to be able to attach property

those states do not own.” Id. at 938. 

These differences between Heiser and this case are

significant. As Professor Paul Mishkin, a “thoughtful legal

scholar[],” put it, when federal courts incorporate state law as 10

federal common law, such incorporation must be done “as to a

single issue at a time” and the court must consider whether the

“issue’s outcome” is consistent with the “federal program.” Paul

J. Mishkin, The Variousness of “Federal Law”:Competence and

Discretion in the Choice of National and State Rules for

Decision, 105 U. PA. L. REV. 797, 804–06 (1957); see Caleb

Nelson, The Persistence of General Law, 106 COLUM. L. REV.

503, 510–11 & n.33 (2006). It follows that we may use Article

4A if and only if, on the issue presented, doing so would be

consistent with TRIA § 201 and FSIA § 1610(g). Boyle v.

United Techs. Corp., 487 U.S. 500, 507–13 (1988); Burks v.

Lasker, 441 U.S. 471, 479–80 (1979). As we held in Heiser,

“Article 4A does not apply of its own force. . . . Federal law,

specifically § 201 and § 1610(g), is controlling.” 735 F.3d at

940. 

(D.C. Cir. 1918). These principles carry significant

weight because “statutes should be interpreted

consistently with the common law.” Manoharan v.

Rajapaksa, 711 F.3d 178, 179 (D.C. Cir. 2013) (per

curiam) (quoting Samantar v. Yousuf, 560 U.S. 305,

320 (2010)).

Heiser, 735 F.3d at 938.

Danforth v. Minnesota, 552 U.S. 264, 275 n.12 (2008); id. at 10

294–95 (Roberts, C.J., dissenting).
11

To sum up thus far, Heiser did not settle whether U.C.C.

Article 4A, or any provisions of it, would apply in a case such as

this as matter of “federal common law.” Henry J. Friendly, In 11

Praise of Erie—and of the New Federal Common Law, 39

N.Y.U. L. REV. 383, 410 (1964)); see Clearfield Tr. Co. v.

United States, 318 U.S. 363, 366–68 (1943); Caleb Nelson, The

Legitimacy of (Some) Federal Common Law, 101 VA.L.REV. 1,

35–36, 63 & n.220 (2015).

Most of what is set forth in the lengthy U.C.C. Article 4A

and its Commentaries, entitled “Funds Transfers,” deals with

technical banking subjects, of no concern here. The parties in

this case naturally focus on § 4A-402, the section dealing with

electronic funds transfers that have miscarried. This section, like

other Article 4A sections, seeks to avoid disruptions to funds

transfers. Its function is to allocate risks and to facilitate the

unwinding of uncompleted funds transfers in a fair and orderly

manner. Grain Traders, Inc. v. Citibank, N.A., 160 F.3d 97, 101

(2d Cir. 1998).12

 As applied in this case, the objectives of U.C.C. § 4A-402

and OFAC’s blocking are incompatible. While § 4A-402 seeks

to minimize disruptions in electronic funds transfers, OFAC’s

blocking does the opposite – its purpose is to disrupt terrorist

We acknowledge that the Second Circuit appears to have 11

adopted U.C.C. Article 4A, or at least New York’s version of it, as

federal common law for all electronic funds transfers in cases such as

this one within its non-diversity jurisdiction. See, e.g., Doe v.

JPMorgan Chase Bank, N.A., 899 F.3d 152, 156–57 (2d Cir. 2018). 

We also acknowledge that our opinion aligns with the dissenting

opinion in that case. Id. at 158–62 (Chin, J., dissenting).

Grain Traders is not a federal common law case; it is a

12

diversity case that applies New York law, specifically New York’s

version of Article 4A. 160 F.3d at 98. 
12

electronic fund transactions. While § 4A-402 is designed to

govern the unraveling of uncompleted electronic transfers,13

when OFAC blocks electronic funds transfers there will be no

unraveling. That is the point of blocking. Thus, the Permanent 14

Editorial Board for the Uniform Commercial Code, in its 15

Commentary No. 16, concluded that Article 4A should not be

“honored” when “a regulation of the Treasury Department’s

Office of Foreign Assets Control (‘OFAC’)” disrupts an

A funds transfer may not be completed because the 13

intermediary bank becomes insolvent after the originator’s bank

credits the intermediary’s account, there is a mistake in the payment

order, or a bank accidentally sends a duplicate payment order. 3

JAMESJ.WHITEETAL.,UNIFORMCOMMERCIAL CODE § 23:15, 21 (6th

ed. 2014).

At least not in the United States. We have no information on 14

potential causes of action in foreign jurisdictions.

 The Permanent Editorial Board 15

is a joint committee of the American Law Institute

and the Uniform Law Commission (also known as

the National Conference of Commissioners on

Uniform State Laws) that assists in attaining and

maintaining uniformity in state statutes governing

commercial transactions by discouraging

non-uniform amendments to the Uniform

Commercial Code by the states, and by approving

and promulgating amendments to the UCC when

necessary.

Export–Import Bank of the U.S. v. Asia Pulp & Paper Co., 609 F.3d

111, 119 n.8 (2d Cir. 2010) (internal quotation marks omitted).
13

electronic transfer. That of course describes this case. 16

When one steps back from § 4A-402’s elaborate – but

inapplicable – methods for unwinding misfired electronic

transfers, the path to our judgment seems clear. OFAC’s

blocking is aimed at terrorists and their financial transactions. 

The TRIA “subject[s] to execution or attachment” “the blocked

assets of [a] terrorist party,” such as a State Sponsor of Terrorism

like Iran, “including the blocked assets of any agency or

instrumentality of that terrorist party” against which plaintiffs

hold a judgment under 28 U.S.C. §§ 1605(a)(7) or 1605A. 

§ 201(a), 116 Stat. 2337. Again, section 201(a) specifies that

such assets can be attached “[n]otwithstanding any other

provision of law.”

Wells Fargo Bank is merely a stakeholder. It risks no

financial loss. Lloyds Bank is not on the hook – it received

$9.98 million from the Holman law firm and it transmitted $9.98

million to Wells Fargo. The Holman law firm held the $9.98

million as an escrow agent; it never owned the money. The 17

only entity that is out of pocket as a result of OFAC’s blocking

is the Iranian front Taif, and that is because it is subject to U.S. 18

sanctions. In terms of the TRIA, just quoted, the $9.98 million

 The district court relied on Commentary No. 16 in concluding 16

that Iran (through Taif) had no property interest in the $9.98 million

held at Wells Fargo. Levin, 523 F. Supp. 3d at 21. The court may not

have been aware of the Permanent Editorial Board’s caveat regarding

OFAC, quoted in the text above. 

Since these are for the most part instant transactions we

17

disregard the effect of interest on the funds.

At least according to U.S. law, which to our analysis is all that 18

matters.
14

therefore represents “blocked assets of [a] terrorist party.”19

The opposition of the United States rests on U.C.C. Article

4A, which we find inapplicable. The government agrees with the

district court’s decision to apply Article 4A and the conclusion

reached. There is another problem with the position of the

United States. The government’s argument here and the district

court’s holding that Iran (Taif) has no property interest in the 20

blocked funds “is inherently at odds with OFAC regulations that

require the ‘property and interests in property’ of [Specially

Designated Global Terrorists] to be blocked in the first place. 

See 31 C.F.R. § 594.201(a). If [a terrorist’s] interest in funds is,

in effect, entirely extinguished while temporarily midstream,

there would be no authorization to block those midstream funds

as ‘property [or] interests in property’ of a designated terrorist

party because that property would belong solely to the

intermediary bank, not a designated terrorist party.” Doe, 899

F.3d at 161 (Chin, J., dissenting) (third and fourth alterations in

original). 

Since U.C.C. Article 4A does not apply, the next question is

what does. Our answer is that under § 201, which deals only

with assets that have already been blocked by the United States,

terrorist victims may attach OFAC blocked electronic funds

transfers if those funds can be traced to a terrorist owner.

Tracing is used throughout federal law to attach

consequences to those having or having had interests in property. 

The Supreme Court has commented: “Courts use tracing rules in

cases involving fraud, pension rights, bankruptcy, trusts, etc.”

Because the funds can be attached using the TRIA, we need not 19

decide whether attachment is permissible under § 1610(g) ofthe FSIA. 

Levin, 523 F. Supp. 3d at 21. 20
15

Luis v. United States, 578 U.S. 5, 22 (2016) (plurality opinion)

(per curiam). The federal forfeiture statutes expressly

incorporate tracing. See, e.g., 18 U.S.C. §§ 981, 982; 21 U.S.C.

§ 881(a)(6); United States v. Daccarett, 6 F.3d 37, 55 (2d Cir.

1993). Consistent with other situations when tracing is used, 21

innocent third parties must be protected. Therefore, blocked

funds can be attached only if no intermediary or upstream bank

asserts an interest as an innocent third party. See Heiser, 735

F.3d at 938–39; Doe, 899 F.3d at 160–61 (Chin, J., dissenting). 

Tracing resolves this case in plaintiffs’ favor. The

government admits that the $9.98 million blocked funds at Wells

Fargo “are traceable to Taif” and thus to Iran. United States Br.

47. The premise of the government’s forfeiture action is that the

funds are traceable to Iran. See J.A. 51 ¶¶ 1–2; id. at 58–60

¶¶ 47–59. Neither Wells Fargo nor Lloyds has asserted a claim

to the blocked funds. The district court therefore erred in

concluding that the plaintiffs had failed to show that the blocked

funds were, under § 201(a) of the TRIA, “the blocked assets of

[a] terrorist party (including the blocked assets of any agency or

instrumentality of that terrorist party).” 116 Stat. 2337. The

district court’s judgment rested entirely on this holding and its

decision is all that we have addressed.

Reversed and remanded.

The U.C.C.’s Permanent Editorial Board, in its Commentary 21

No. 16, indicated that Article 4A does not apply in drug forfeiture

cases, and that with respect to blocked electronic funds, the

“Daccarett court, as appropriate in a forfeiture case, identified the

amount of the funds as ‘traceable’ to an illicit activity and therefore

subject to attachment under 21 U.S.C. § 881(a).”
16

EPILOGUE

In January 2020 the United Arab Emirates seized the Nautic

pursuant to a civil court order. Crystal initiated an arbitration

against Taif Mining to collect the $9.98 million balance. While

the arbitration was pending, and while the Nautic was moored

off the UAE coast, Iranians hijacked the ship.
PILLARD, Circuit Judge, concurring: I agree with the 

majority that the Uniform Commercial Code’s Article 4A is an 

inappropriate rule of decision for determining whether funds

owned by a terrorist party that initiates an EFT, during which 

the government blocks the funds based on 31 C.F.R. § 594.201, 

are property “of” a terrorist party for purposes of TRIA § 201. 

But in the place of Article 4A, I would make explicit that 

common-law ownership and agency principles apply instead of 

or in addition to tracing. Because the majority’s rule

apparently produces the same result in this case, I concur.

No party proposed we adopt tracing alone as our rule of 

decision in this context, and for good reason. That approach

does not fulfill a key requirement of TRIA that we highlighted 

in Heiser v. Islamic Republic of Iran: that the terrorist party be 

shown to have “an ownership interest” in the funds sought. 735 

F.3d 934, 941 (D.C. Cir. 2013); see id. at 938-40. Tracing

typically involves a sort of forensic accounting—a process of 

identifying how an asset has been transformed, transferred, or 

substituted such that a claim against the asset can instead be 

made against the new one. “With the help of [tracing] rules, 

the victim of a robbery, for example, will likely obtain the car 

that the robber used stolen money to buy.” Luis v. United 

States, 578 U.S. 5, 22 (2016). But tracing presupposes 

ownership; it does not identify any legal rule for establishing 

ownership, or even require that ownership be shown. The 

majority’s holding that the relevant funds may be attached so 

long as they are “traceable to Taif,” supra at 15, stops short of 

specifying any rule of decision to substitute for U.C.C. Article

4A in providing the statutorily required showing of ownership 

under Heiser.

Specifying only the tracing approach creates needless 

uncertainty. As we observed in Heiser, “[t]he blocking 

regulations cast a wide net,” and are “not based on legal 

ownership.” 735 F.3d at 936. The fact that the government has 

blocked funds is not itself assurance that the funds are or were 
2

owned by terrorists. Victims of terrorism seeking to attach 

OFAC blocked electronic funds must also show the funds can 

be traced to a terrorist owner, id. at 941, a showing the 

government itself need not make prior to the blocking. 

The court’s opinion helpfully limits its tracing-based

TRIA rule to circumstances in which “no intermediary or 

upstream bank asserts an interest as an innocent third party,” 

supra at 15. But it does not explain the legal basis of that 

limitation. And it leaves unclear, for example, whether a bank 

could make such an assertion after the TRIA plaintiffs had 

recovered against the property. We must avoid a rule that 

“risks punishing innocent third parties”—the result Heiser read 

TRIA to prevent. 735 F.3d at 939 (citing cases establishing 

that we strictly construe attachment statutes to protect innocent 

parties).

In a case in which the tracing rule alone does not eliminate 

such risk, an apt federal rule of decision was presented to us: 

the application of common-law ownership and agency 

principles in lieu of the U.C.C. Article 4A-based rule applied 

in Heiser. See Owens Appellants’ Br. 36-40. The relevant 

TRIA provision seeks to hold terrorist parties accountable by 

subjecting their assets to attachment. Treating banks 

effectuating EFTs as agents rather than owners in this context 

would ensure that even in financial transactions like EFTs that 

are designed to be quick and difficult to interrupt, that design 

does not defeat the ability of TRIA claimants to reach funds 

during terrorist-initiated EFTs that the blocking regime

succeeds in interrupting. This rule would allow the law to keep 

its eye on the ball as Congress plainly intended: The banks are 

just the tools for carrying out the transaction. Whether it is 

transferred by EFT or some more traditional means like a 

check, property in a transaction that a terrorist party funds, 
3

initiates, and primarily benefits from is appropriately subject to 

claims under TRIA.

The logic of this approach echoes the common law’s 

treatment of certain banking relationships in the decades before 

the U.C.C. added specialized treatment of electronic fund 

transfers. In Commercial National Bank v. Armstrong, for 

example, the Supreme Court recognized that “the relation 

created between the banks as to [a check to be cashed] was that 

of principal and agent,” which created a “trust obligation” over 

the funds to be transferred and permitted those funds to be 

“specifically trac[ed]” back to the principal’s rightful 

ownership. 148 U.S. 50, 56 (1893). Because of that agency 

relationship, 

[w]hether it be said that such funds are 

specifically traceable in the possession of the 

subagent, or that the agent has never reduced 

those funds to possession, or put itself in a 

position where it could rightfully claim that it 

has changed the relation of agent to that of 

debtor, the result [was] the same.

Id. at 57. The result was that traceable funds intended as cash 

payment on that check belonged to the principal, rather than the 

agent bank, even if those funds were stopped mid-transfer. Id.

at 57-58; see also, e.g., City of Miami v. First Nat. Bank, 58 

F.2d 561 (5th Cir. 1932). 

Under that approach, for purposes of TRIA § 201, 

plaintiffs must establish not only that funds have been blocked 

based on “any interest” that a terrorist party may have in them,

50 U.S.C. § 1702(a)(1)(B), but also that the funds are owned 

by the terrorist—not by an innocent EFT initiator, see Heiser, 

735 F.3d at 936, or other innocent party. Any bank 
4

downstream from a terrorist party originator of an EFT, for 

example, is not treated as owner of the funds, as it would be 

under U.C.C. Article 4A. Rather, under general common law 

rules applicable to non-EFT money transfers, it would be 

treated as an agent or subagent of the originator-owner. Here, 

Taif was the owner of the funds it asked Holman Fenwick to 

electronically transfer, and for current purposes it thus retained 

ownership of the contested funds, even as the funds passed 

through the hands of its agents and subagents until they were 

frozen in Wells Fargo’s possession. Thus, applying common 

law ownership and agency principles would treat Taif—and 

only Taif—as holding an ownership interest in the blocked 

funds.

I therefore concur in reversing the district court’s 

determination that the blocked funds were not “of” a terrorist 

party. Supra at 15. I write separately to emphasize that, in my 

view, tracing alone is a conceptually incomplete rule of 

decision. But I do not take the court’s tracing approach to be 

inconsistent with additional reliance on a federal rule based on 

common-law ownership and agency principles—to the extent 

it might be needed in future litigation—to harmonize today’s 

decision with Heiser and reduce legal uncertainty for innocent 

owners and third parties like Wells Fargo.