Terrorism Victims Protection Act

Bill: 114-s-3442
Sponsor: full_name: Sen. Blumenthal, Richard [D-CT]
Introduced: 2016-09-28
Policy area: Finance and Financial Sector
Subjects: Bank accounts, deposits, capital

Civil actions and liability

Crime victims

Foreign property

Government liability

Iran

Middle East

Securities

Terrorism
Latest action: action_date: 2016-09-28
text: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Summaries:
action_date: 2016-09-28
action_desc: Introduced in Senate
text: <p><b>Terrorism Victims Protection Act </b></p> <p>This bill amends the Terrorism Risk Insurance Act of 2002 to allow a person's judgment against a terrorist party or a state sponsor of terrorism to be satisfied with: (1) assets blocked by the U.S. government that pass through the U.S. financial system as a transfer of funds between non-state owned, non-U.S. financial institutions located outside the United States or as a mid-stream electronic fund transfer in possession of an intermediary bank; (2) assets located outside the United States that, if located in the United States, would be subject to seizure or freezing under the Trading with the Enemy Act or the International Emergency Economic Powers Act, if a U.S. court has jurisdiction over the person in possession; or (3) attempted transfers for the benefit of a terrorist party to accounts located outside the United States. </p> <p> The bill protects the interests of non-terrorist third parties in the blocked assets, but these third-party protections do not apply to custodial interests of a foreign securities intermediary holding blocked assets outside the United States for the government of Iran. </p> <p>The bill nullifies attempted transfers outside the United States of assets of a state sponsor of terrorism liable for personal injury or death, unless the person who held the asset establishes that the transfer was not a willful violation of a court order or an enforcement process. </p>

tv_txt: II 114th CONGRESS 2d Session S. 3442 IN THE SENATE OF THE UNITED STATES September 28, 2016 Mr. Blumenthal introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To amend the Terrorism Risk Insurance Act of 2002 to provide for the release of certain blocked assets, and for other purposes.

1. Short title This Act may be cited as the Terrorism Victims Protection Act . 2. Execution of payment Section 201 of the Terrorism Risk Insurance Act of 2002 ( 28 U.S.C. 1610 note) is amended— (1) in subsection (a), by striking subsection (b) and inserting subsections (b) and (e) ; (2) by redesignating subsection (d) as subsection (g); (3) by inserting after subsection (c) the following: (d) Discharge from liability for funds transfers The final order directing attachment in aid of execution or execution against an asset described in subsection (g)(3)(A)(iii), including any mid-stream electronic funds transfer to a judgment creditor under this section, shall provide that— (1) any financial agency or financial institution ordered to attach in aid of execution or execute against any such asset that is involved in processing any transfer related to those assets shall be discharged of any and all liability to any party with respect to such funds transfer; (2) for purposes of determining the liability of the originator of any mid-stream funds transfer to a terrorist party, or to the agency or instrumentality of such a terrorist party, the mid-stream funds transfer shall be treated as if it were completed and payment were received by the intended beneficiary; and (3) the terrorist party, and any agency or instrumentality of that terrorist party, shall be barred from pursuing any claims related to the assets turned over pursuant to this section against any entity discharged under paragraphs (1) and (2). (e) Third-Party interest in blocked assets (1) In general Except as provided in paragraph (2), if a court determines that a person other than a terrorist party or any agency or instrumentality of that terrorist party holds equitable title to, or a beneficial interest in, the blocked assets of that terrorist party (including the blocked assets of any agency or instrumentality of that terrorist party) or has a constitutionally protected interest in those blocked assets, the court may make the blocked assets available for execution or attachment in aid of execution under subsection (a) only to the extent that— (A) the terrorist party or any agency or instrumentality of a terrorist party has an ownership interest, as described in subsection (g)(3)(A), in the blocked assets; and (B) the execution or attachment does not infringe upon the constitutionally protected interest in the assets. (2) Exception Paragraph (1) shall not apply to any custodial interest of a foreign securities intermediary or a related intermediary that holds the blocked assets outside of the United States for the benefit of the Government of Iran. (f) International transfers (1) In general Except as provided in paragraph (2)(C)— (A) a transfer described in subsection (g)(3)(C) shall be null and void; and (B) the asset that is the subject of the transfer shall be treated as if the asset remains in the United States. (2) Jurisdiction Any court that has personal jurisdiction over the transferee of an asset described in paragraph (1)(B) may— (A) order the transferee to return the asset to the United States; and (B) if the transferee fails to obey an order described in subparagraph (A)— (i) deem any asset in an account of the transferee in the United States that is an amount not greater than the value of the transferred asset described in paragraph (1)(B) to be an asset of a terrorist party or any agency or instrumentality of that terrorist party; and (ii) issue an award against the transferee in an amount that is not greater than the value of the transferred asset described in paragraph (1)(B). (C) Exceptions A transfer of an asset that would otherwise be null and void under paragraph (1) may not be deemed to be null and void with respect to any person who held or maintained the property before the transfer if that person establishes that— (i) the person no longer has possession or control of the asset; (ii) the transfer of the asset was not a willful violation by the person— (I) of the provisions of any orders or regulations issued by the United States that seized or froze assets under section 5(b) of the Trading With the Enemy Act ( 50 U.S.C. 4305(b) ); or (II) under sections 202 and 203 of the International Emergency Economic Powers Act (50 U.S.C. 1701 and 1702); (iii) the person did not have reasonable cause to know or suspect, in view of all the facts and circumstances known by or available to the person— (I) that the transfer required a license or authorization issued by the Office of Foreign Assets Control of the Department of the Treasury (in this subparagraph referred to as the Office ); or (II) that a license or authorization described in subclause (I), if the license or authorization purports to cover the transfer, had been obtained by— (aa) the misrepresentation of a third party; (bb) withholding material facts; or (cc) other fraudulent means; and (iv) the person submitted to the Office a report containing a full description of the circumstances relating to the transfer promptly upon discovering that— (I) the transfer violated any of the provisions described in clause (ii); (II) the transfer was not licensed or authorized by the Office; or (III) if the person had obtained a license or authorization that purported to apply to the transfer, the license had been obtained under circumstances described in clause (iii)(II). ; and (4) in subsection (g), as so redesignated— (A) by redesignating paragraphs (3) and (4) as paragraphs (4) and (9), respectively; (B) by inserting after paragraph (2) the following: (3) Blocked asset of that terrorist party The term blocked assets of that terrorist party (including the blocked assets of any agency or instrumentality of that terrorist party) means— (A) any blocked asset in which the terrorist party or any agency or instrumentality of that terrorist party has a direct, indirect, beneficial, equitable, or legal ownership interest under State or Federal law, including— (i) a financial asset beneficially owned by a terrorist party or any agency or instrumentality of that terrorist party; (ii) any interest, sale, and redemption payment related to a financial asset described in clause (i) that is received in an account maintained in the United States at a financial agency or financial institution regardless of where the terrorist party or any agency or instrumentality of that terrorist party maintains an account in the name to which the financial asset has been credited; and (iii) a transfer of funds, including any mid-stream electronic funds transfer in possession of an intermediary bank if— (I) the terrorist party or any agency or instrumentality of the terrorist party is the originator or the beneficiary of the fund transfer; or (II) the transfer was conducted for the direct or indirect benefit of the terrorist party or any agency or instrumentality of that terrorist party, including the central bank or monetary authority of the terrorist party, regardless of whether the transfer was initiated by a non-state-owned, non-U.S. financial institution located outside of the United States and only passes through the financial system of the United States to another non-state-owned, non-U.S. financial institution located outside of the United States; (B) any asset located outside the United States that, if located in the United States, would be subject to an order or regulation seizing or freezing assets under section 5(b) of the Trading With the Enemy Act ( 50 U.S.C. 4305(b) ) or sections 202 and 203 of the International Emergency Economic Powers Act (50 U.S.C. 1701 and 1702), if a court in the United States has personal jurisdiction over the person in possession or custody of the asset located outside the United States; and (C) any attempted direct or indirect transfer from an account located in the United States to an account located outside of the United States that— (i) relates to any financial asset described in subparagraph (A); and (ii) is for the direct or indirect benefit of the terrorist party or any agency or instrumentality of the terrorist party, regardless of whether the transfer is completed by a book entry, a wire transfer, or any other means. ; and (C) by inserting after paragraph (4), as so redesignated, the following: (5) Financial agency The term financial agency has the meaning given the term in section 5312(a) of title 31, United States Code. (6) Financial asset The term financial asset — (A) has the meaning given the term in Article 8–102 of the Uniform Commercial Code; and (B) includes cash. (7) Financial institution The term financial institution has the meaning given the term in section 5312(a) of title 31, United States Code. (8) Intermediary bank The term intermediary bank has the meaning given the term in Article 4A–104 of the Uniform Commercial Code. . 3. Exceptions to the immunity from attachment or execution Section 1610 of title 28, United States Code, is amended by striking subsection (g) and inserting the following: (g) Property in certain actions (1) Definitions In this subsection— (A) the term financial agency has the meaning given the term in section 5312(a) of title 31; (B) the term financial asset — (i) has the meaning given the term in Article 8–102 of the Uniform Commercial Code; and (ii) includes cash; (C) the term financial institution has the meaning given the term in section 5312(a) of title 31; (D) the term intermediary bank has the meaning given the term in Article 4A–104 of the Uniform Commercial Code; and (E) the term property of a foreign state against which a judgment is entered under section 1605A, and the property of an agency or instrumentality of such a state includes— (i) a financial asset beneficially owned by a terrorist party or its agency or instrumentality; (ii) any interest, sale, and redemption payment related to a financial asset described in clause (i) that is received in an account maintained in the United States at a financial agency or financial institution regardless of where the terrorist party or its agency or instrumentality maintains an account in its name to which the financial asset has been credited; and (iii) a transfer of funds, including any mid-stream electronic funds transfer in possession of an intermediary bank if— (I) such terrorist party or its agency or instrumentality is the originator or the beneficiary of the fund transfer; or (II) the transfer was conducted for the direct or indirect benefit of such terrorist party or its agency or instrumentality, including the central bank or monetary authority of the terrorist party, regardless of whether the transfer was initiated by a non-state-owned, non-U.S. financial institution located outside of the United States and only passes through the financial system of the United States to another non-state-owned, non-U.S. financial institution located outside of the United States. (2) Transfers null and void (A) In general Except as provided in subparagraph (C), any attempted direct or indirect transfer from an account located in the United States to an account located outside of the United States shall be null and void, and the asset that is the subject of the transfer shall be treated as if the asset remains in the United States, if the transfer— (i) relates to any financial asset described in paragraph (1)(E); (ii) is for the direct or indirect benefit of a foreign state or an agency or instrumentality of that foreign state, regardless of whether the transfer is completed by means of a book entry, wire transfer, or otherwise; and (iii) violates any court order, retraining notice, judgment lien, or other process in aid of enforcement of, or that constitutes a fraudulent conveyance or transfer with respect to, a judgment under section 1605A against that foreign state or the agency or instrumentality of that foreign state. (B) Jurisdiction A court that has personal jurisdiction over the transferee of a transfer described in subparagraph (A) may— (i) order the transferee to return the financial asset to the United States; and (ii) if the transferee fails to obey an order under clause (i)— (I) deem any asset that is an amount not greater than the value of the transferred asset to be an asset of a foreign state or an agency or instrumentality of the foreign state; and (II) issue an award against the transferee in an amount that is not greater than the value of the transferred asset. (C) Exception Any transfer that otherwise would be null and void under subparagraph (A) shall not be deemed to be null and void if the person who held or maintained the asset that was the subject of the transfer establishes that the transfer did not represent a willful violation of the provisions of any court order, retraining notice, judgment lien, or other process in aid of enforcement of a judgment under section 1605A against a foreign state or an agency or instrumentality of that foreign state. (3) Applicable property Subject to paragraph (4) and notwithstanding any other provision of law, including any provision of law relating to sovereign immunity and the provisions of section 1611, the property of a foreign state against which a judgment is entered under section 1605A or under section 1605(a)(7) (as such section was in effect on January 27, 2008), 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, is subject to attachment in aid of execution, and execution, upon that judgment as provided in this subsection, 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 affairs; (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. (4) United states sovereign immunity inapplicable Any property of a foreign state, or agency or instrumentality of a foreign state, to which paragraph (1) applies shall not be immune from attachment in aid of execution, or execution, upon a judgment entered under section 1605A or under section 1605(a)(7) (as such section was in effect on January 27, 2008), because the property is regulated by the United States Government by reason of action taken against that foreign state under the Trading With the Enemy Act ( 50 U.S.C. 4301 et seq. ) or the International Emergency Economic Powers Act ( 50 U.S.C. 1701 et seq. ). (5) Third-party joint property holders Nothing in this subsection shall be construed to supersede the authority of a court to prevent appropriately the impairment of an interest held by a person who is not liable in the action giving rise to a judgment in property subject to attachment in aid of execution, or execution, upon such judgment. (6) Discharge from liability The final judgment directing attachment in aid of execution or execution against an asset described in paragraph (1)(E)(iii), including any mid-stream electronic funds transfer to a judgment creditor under this section shall provide that— (A) any financial agency or financial institution ordered to attach in aid of execution or execute against any such asset that is involved in processing any transfer related to those assets shall be discharged of any and all liability to any party with respect to such funds transfer; (B) for purposes of determining the liability of the originator of any mid-stream funds transfer to a foreign state against which a judgment has been entered under section 1605A or under section 1605(a)(7) (as such section was in effect on January 27, 2008), or to the agency or instrumentality of such a state, the mid-stream transfer shall be treated as if it were completed and payment were received by the intended beneficiary; and (C) the foreign state against which a judgment has been entered under section 1605A or under section 1605(a)(7) (as such section was in effect on January 27, 2008), and each agency and instrumentality of such a state shall be barred from pursuing any claim related to the assets turned over pursuant to this subsection against any entity discharged pursuant to subparagraphs (A) and (B). (7) State preemption To the extent that any State or local law is inconsistent with the requirements of this subsection, the requirements of this subsection shall preempt such State or local law. .