Court Opinion

ID: 4302237
Source: CourtListenerOpinion
Date Created: 2018-08-09 15:00:17.574679+00
Date Added: 2024-06-11T14:29:41.624626
License: Public Domain

17-759-cv
     Doe v. JPMorgan Chase Bank, N.A.

 1                                               In the
 2                       United States Court of Appeals
 3                                      For the Second Circuit
 4
 5
 6                                          August Term 2017
 7
 8
 9                                            No. 17-759-cv
10
11                                              John Doe,
12                                          Plaintiff-Appellant,
13
14                                                   v.
15
16                                JPMorgan Chase Bank, N.A.,
17                 Respondent-Third-Party-Petitioner-Counter-Claimant-Appellee,
18
19   Deutsche Bank Trust Company Americas, Commerzbank AG, New York Branch,
20                             Respondents-Appellees.1
21
22
23                        Appeal from the United States District Court
24                           for the Southern District of New York
25                         Laura T. Swain, District Judge, Presiding.
26                    (Argued: December 15, 2017; Decided: August 9, 2018)
27
28   Before:        Parker, Wesley, and Chin, Circuit Judges.
29                                        ________
30
31         Judgment creditor of sanctioned foreign entities sought attachment and
32   turnover of blocked electronic funds transfers (“EFTs”) under Section 201(a) of
     1
            The Clerk of Court is respectfully directed to amend the caption as above.
 1   the Terrorism Risk Insurance Act, Pub. L. No. 107–297, § 201, 116 Stat. 2322, 2337
 2   (2002) (codified at 28 U.S.C. § 1610 note). The District Court (Swain, J.) denied
 3   the request on the grounds that a blocked EFT held at an intermediary bank is
 4   subject to execution only if the judgment debtor or its agent transmitted the EFT
 5   directly to the bank where the EFT is blocked. The judgment of the District Court
 6   is AFFIRMED.
 7
 8         Judge Chin dissents in a separate opinion.
 9                                       ________
10
11                     ORLANDO DO CAMPO, Do Campo & Thorton, P.A., Miami, FL,
12                     and BRETT E. VON BORKE, Buckner + Miles, Miami, FL, for John
13                     Doe
14
15                     STEVEN B. FEIGENBAUM AND GREGORY P. FEIT, Levi Lubarsky
16                     Feigenbaum & Weiss LLP, New York, NY, for JPMorgan Chase
17                     Bank, N.A.
18
19                     MARK P. GIMBEL, Covington & Burling LLP, New York, NY, for
20                     Deutsche Bank Trust Company Americas
21
22                     TERRY MYERS AND PAUL A. SASO, Gibbons P.C., New York, NY,
23                     for Commerzbank AG, New York Branch
24
25                     CHAD D. READLER, Acting Assistant Attorney General;
26                     SHARON SWINGLE AND BENJAMIN M. SHULTZ, Department of
27                     Justice; and PETER ARONOFF AND CHRISTOPHER CONNOLLY,
28                     Assistant U.S. Attorneys, for Geoffrey S. Berman, U.S.
29                     Attorney for the Southern District of New York, for Amicus
30                     Curiae United States of America
31                                       ________
32
33
34

                                             2
 1   BARRINGTON D. PARKER, Circuit Judge:

 2           John Doe is a judgment creditor who seeks attachment and turnover of

 3   electronic fund transfers (“EFTs”) initiated by sanctioned foreign terrorist

 4   organizations which, after passing through foreign intermediary banks, were

 5   blocked and held by domestic banking institutions. See Section 201(a) of the

 6   Terrorism Risk Insurance Act (“TRIA”), Pub. L. No. 107–297, § 201, 116 Stat. 2322,

 7   2337 (2002) (codified at 28 U.S.C. § 1610 note). Specifically, Doe applied below

 8   for turnover orders against JPMorgan Chase Bank, N.A. (“JPMorgan”), Deutsche

 9   Bank Trust Company Americas (“Deutsche Bank”), and Commerzbank AG, New

10   York Branch (“Commerzbank”), the institutions which blocked and held the

11   EFTs.

12           The United States District Court for the Southern District of New York

13   (Swain, J.), denied the applications on the grounds that the EFTs were not the

14   property of the originators—the terrorist organizations—but instead were the

15   property of the intermediaries that transferred the funds to the U.S. institutions.

16   See Doe v. Ejercito De Liberacion Nacional, No. 15-cv-8652, 2017 WL 591193

17   (S.D.N.Y. Feb. 14, 2017). In reaching that conclusion, the District Court relied on

                                             3
 1   Calderon-Cardona v. Bank of N.Y. Mellon, 770 F.3d 993 (2d Cir. 2014) and Hausler v.

 2   JP Morgan Chase Bank, N.A., 770 F.3d 207 (2d Cir. 2014) (per curiam), in which we

 3   held that blocked wire transfers held at an intermediary bank are subject to

 4   execution under Section 201(a) only if the judgment debtor or an agency or

 5   instrumentality of the judgment debtor “transmitted the EFT directly to the bank

 6   where the EFT is held pursuant to the block.” Calderon-Cardona, 770 F.3d at 1002;

 7   see also Hausler, 770 F.3d at 212. Because the record reflects that the judgment

 8   debtors did not do so, we AFFIRM.

 9                                      BACKGROUND

10         The International Emergency Economic Powers Act, 50 U.S.C. §§

11   1701–1706, empowers the President to impose economic sanctions to respond to

12   unusual and extraordinary international threats to the United States. 50 U.S.C. §§

13   1701, 1702(a). In 2001, the President invoked that authority to authorize the

14   Treasury Department to designate a persons as a Specifically Designated Global

15   Terrorist (“SDGT”) if the Treasury finds that the person is “owned or controlled

16   by” a designed terrorist group; assists in, sponsors, or provides material or

17   financial support to a terrorist group; or is “otherwise associated with” a terrorist

                                              4
 1   group. See Executive Order 13,224, 66 Fed. Reg. 49,079 (Sept. 23, 2001) § 1(c)–(d).

 2   Executive Order 13,224 also authorizes the Treasury to “take such actions,

 3   including the promulgation of rules and regulations . . . as may be necessary to

 4   carry out the purpose of this order.” Id. § 7. Pursuant to this authority, the

 5   Department of the Treasury’ Office of Foreign Asset Control (“OFAC”)

 6   promulgated Global Terrorism Sanction Regulations that, among other things,

 7   require United States banks to block transactions involving SDGTs that are

 8   subject to sanctions. See 31 C.F.R. Part 594. These regulations provide that

 9   “property and interests in property” of SDGTs are “blocked” and “may not be

10   transferred, paid, exported, withdrawn or otherwise dealt in” if the property or

11   interest is either in the United States or comes within the possession or control of

12   a U.S. person. Id. § 594.201(a).

13         Doe’s motion seeking a turnover order and his brief on appeal alleged the

14   following facts. In December 2010, OFAC identified Tajco Ltd. (“Tajco”) as a

15   SDGT. Joint App’x A-370. A few days later, Tajco originated an EFT from Arab

16   Gambian Islamic Bank Ltd. in the amount of $120,416 for the benefit of an

17   account holder at the Lebanese Canadian Bank. Id. A-371. From the originating

                                              5
 1   bank, the funds flowed to AHLI United Bank UK PLC (“AHLI”), an intermediary

 2   bank, which then transmitted the funds to JPMorgan, as the beneficiary bank. Id.

 3   at A-371–72. JPMorgan blocked and held the transfer because Tajco was referred

 4   to in the payment instructions of the EFT and appeared on the OFAC’s list of

 5   terrorist organizations. Id. at A-371.

 6          In April 2012, OFAC identified Grand Stores Ltd.’ (“Grand Stores”)

 7   Gambian location as an alias of Tajco and as a SDGT. Id. at A-370. In May 2012,

 8   Grand Stores, from its Gambian operation, originated an EFT in the amount of

 9   $400,951.41 from Trust Bank Ltd. Id. at A-371–72. Trust Bank then wired the

10   funds to its correspondent bank Credit Suisse AG (“Credit Suisse”), which then

11   wired the funds to JPMorgan, as the beneficiary bank. Id. at A-371. JPMorgan

12   blocked the transfer and held the funds because at the time of the wire transfer,

13   Grand Stores was on the OFAC’s list of SDGTs. Id. Credit Suisse and AHLI then

14   disclaimed any interest in the blocked accounts and all remaining possible

15   claimants other than Doe have either defaulted, or have dismissed or withdrawn

16   any claims to the funds which have remained in the blocked accounts. Id. at A-

17   372.

                                              6
 1         A.    Proceedings Below

 2         This action began in June 2015 when Doe registered in the Southern

 3   District of New York a $36.8 million judgment he had obtained in the Southern

 4   District of Florida against Ejercito de Liberacion Nacional (the “ELN”) and

 5   Fuerzas Armadas Revolucionarios de Colombia (the “FARC”) terrorist

 6   organizations that he alleges kidnaped and tortured him in Venezuela and

 7   Colombia. In an attempt to collect on the judgment, Doe initiated a turnover

 8   proceeding and named JPMorgan as a respondent.        The petition sought the

 9   turnover of funds blocked and held by JPMorgan and alleged to belong to Grand

10   Stores and Tajco, both of which Doe alleged to be agents of the FARC.       In

11   response, JPMorgan brought an interpleader action in which it named Credit

12   Suisse and AHLI respondents. Credit Suisse and AHLI then reached settlements

13   with JPMorgan in which they agreed to relinquish any claims to the blocked

14   Tajco and Grand Stores accounts and also to release JPMorgan from any liability

15   with respect to the accounts. Doe later joined Deutsche Bank and Commerzbank

16   in the turnover proceedings, also alleging that the blocked funds they held

17   belonged to agents of the ELN and the FARC.

                                           7
 1            The District Court denied Doe’s turnover application directed at

 2   JPMorgan. Because the parties agree that the issues raised in the JPMorgan

 3   petition were similar to those raised in the petitions against Deutsche Bank and

 4   Commerzbank, Doe requested, and the District Court agreed, to enter an order

 5   denying the petitions directed at Commerzbank and Deutsche Bank for

 6   substantially the reasons that it denied the one directed at JPMorgan.                      Doe

 7   appeals the denial of the three petitions.

 8            We review de novo the threshold issue of whether EFTs are property of a

 9   particular party. Hausler, 770 F.3d at 211 (quoting Calderon-Cardona, 770 F.3d at

10   1000).

11                                           DISCUSSION2

12            Unless a judgment creditor acquires a license from the OFAC, the creditor

13   is typically barred from attaching blocked assets. See, e.g., 31 C.F.R. §§ 594.201(a),

14   594.202(e) (providing that attachment and other similar judicial process related to

15   property blocked pursuant to the Global Terrorism Sanctions Regulations are

     2
             As noted, this appeal principally concerns Doe’s turnover petitions directed at JPMorgan,
     Deutsche Bank, and Commerzbank. While this opinion recounts facts and engages in analysis
     solely with respect to the JPMorgan petition, it disposes of the appeals of the Deutsche Bank and
     Commerzbank turnover petitions, as all parties agree that they involve the same issues.

                                                    8
 1   null and void).       However, to assist victims of terrorism in satisfying their

 2   judgments, Congress enacted TRIA in 2002. Calderon-Cardona, 770 F.3d at 998.

 3   Section 201(a) of TRIA allows a plaintiff to execute a judgment on blocked assets

 4   of a terrorist party, or its agency or instrumentality, to satisfy a judgment against

 5   the terrorist party, where:

 6       (1) a person has obtained a judgment against a terrorist party;

 7       (2) the judgment is either

 8             (a) for a claim based on an act of terrorism, or

 9             (b) for a claim for which a terrorist party is not immune under §

10                 1605(a)(7);

11       (3) the assets are “blocked assets” within the meaning of TRIA; and

12       (4) execution is sought only to the extent of any compensatory damages.3

     3
            Section 201(a) of TRIA provides:

            (a) IN GENERAL.—Notwithstanding any other provision of law, and except as
            provided in subsection (b), in every case in which a person has obtained a judgment
            against a terrorist party on a claim based upon an act of terrorism, or for which a
            terrorist party is not immune under section 1605(a)(7) of title 28, United States Code,
            the blocked assets of that terrorist party (including the blocked assets of any agency
            or instrumentality of that terrorist party) shall be subject to execution or attachment
            in aid of execution in order to satisfy such judgment to the extent of any
            compensatory damages for which such terrorist party has been adjudged liable.

                                                      9
 1         Courts applying TRIA in the EFT context look to state law to define the

 2   rights a judgment debtor has in the property a creditor seeks to reach. See

 3   Calderon-Cardona, 770 F.3d at 1001. In Hausler, after analyzing what property

 4   interests are attachable under New York law, we held that under Article 4A of

 5   the New York Uniform Commercial Code, EFTs are neither the property of the

 6   originator nor the beneficiary while briefly in the possession of an intermediary

 7   bank. 770 F.3d at 212. We held that “the only entity with a property interest in

 8   the stopped EFT is the entity that passed the EFT on to the bank where it

 9   presently rests.”   Id. (quoting Calderon-Cardona, 770 F.3d at 1002) (emphasis

10   added). This is so because “wire transfers, which include EFTs, are a unique type

11   of transaction to which ordinary rules do not necessarily apply.”         Calderon-

12   Cardona, 770 F.3d at 1001 (quoting Export-Import Bank of U.S. v. Asia Pulp & Paper

13   Co., 609 F.3d 111, 118 (2d Cir. 2010)). EFTs function “as a chained series of debits

14   and credits between the originator, the originator’s bank, any intermediary

15   banks, the beneficiary’s bank, and the beneficiary[;] ‘the only party with a claim

16   against an intermediary bank is the sender to that bank.’” Id. (quoting Asia Pulp,

17 609 F.3d at 119–20). In other words, under the N.Y. UCC’s statutory scheme, “the

                                             10
1   only entity with a property interest in an EFT while it is midstream is the entity

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

3   at 1002.4 “It is beyond cavil that attachment will only lie against the property of

4   the debtor, and that the right to attach the property ‘is only the same as the

5   defendant’s own interest in it.’” Bank of N.Y. v. Nickel, 14 A.D.3d 140, 145 (N.Y.

6 A.D. 1st Dep’t 2004) (quoting Sidwell & Co. v. Kamchatimpex, 166 Misc. 2d
7   639, 644 (N.Y. Sup. Ct. Co. 1995)).

8          Doe contends that Grand Stores or Tajco are agencies or instrumentalities

9   of the FARC and that turnover of the FARC’s assets to satisfy his judgment is

    4
           The dissent takes issue with, among other things, this recitation of the N.Y. UCC statutory
    scheme, as embraced by our decisions in Calderon-Cardona and Hausler. In so doing, the dissent sees
    a tension between a SDGT’s interest in funds being, “in effect, entirely extinguished while
    temporarily midstream,” on the one hand, and OFAC’s authority to block “property [or] interests
    in property” of a SDGT, on the other. See Dissent, op. at 7-9. We, however, see no such tension.
    The terms “interest” and “title” are “clearly not synonymous.” Asia Pulp, 609 F.3d at 120 (quoting
    Bank of N.Y. v. Nickel, 14 A.D.3d 140, 145–47 (N.Y. App. Div. 1st Dep’t 2004)). “[A]lthough Article
    4-A establishes that neither an originator nor a beneficiary owns or has title to a midstream EFT,
    Article 4-A does not address the separate issue of who has an ‘interest’ in an EFT.” Id. (emphasis
    in original). By contrast, the Global Terrorism Sanctions Regulations define “property” and
    “property interest” very expansively to include, among other things, “any other property, real,
    personal, or mixed, tangible or intangible, or interest or interests therein, present, future or
    contingent.” 31 C.F.R. § 594.309. Similarly, the Regulations further define “interest” when used
    with respect to property very broadly to mean “an interest of any nature whatsoever, direct or
    indirect.” Id. § 594.306. As such, our holding here that the SDGTs at issue did not hold title to the
    blocked assets—such that attachment under Section 201(a) is unavailable—does not preclude the
    blocking of such assets under the Global Terrorism Sanctions Regulations. As the propriety of the
    blocking of the assets is not properly before us, we need not reach that issue.

                                                     11
 1   authorized by Section 201(a). All parties agree that Doe obtained a judgment

 2   against a terrorist party, based upon an act of terrorism, and seeks execution only

 3   to the extent of compensatory damages. Consequently, the only disputed issue

 4   before us is whether the assets in the blocked accounts are property of SDGTs.

 5         Here, as in Hausler, it is undisputed that no SDGT transmitted any of the

 6   blocked EFTs directly to a blocking bank. See 770 F.3d at 212. Credit Suisse and

 7   AHLI transmitted the funds held in the Grand Stores and Tajco blocked accounts

 8   to JPMorgan, and neither Credit Suisse nor AHLI are SDGTs. See Ejercito, 2017

 9 WL 591193, at *2. Consequently, our decisions in Calderon-Cardona and Hausler

10   compel the conclusion that neither Grand Stores nor Tajco has any attachable

11   property interest in the blocked funds at JPMorgan since they were not the

12   entities that directly passed the EFTs to JPMorgan. As such, as the District Court

13   correctly concluded, the blocked funds are not attachable under Section 201(a).

14         Doe invites us to depart from Calderon-Cardona and Hausler on the theory

15   that where, as here, the intermediary banks, which passed the EFTs on to

16   blocking banks, disclaim any interest in the blocked accounts and the originating

17   banks fail to appear or participate in the turnover proceedings, the funds

                                             12
 1   “move[] back up the chain or upstream” to the “sender[s] to that bank,” which

 2   would be Grand Stores and Tajco (the two SDGTs).              In other words, the

 3   transaction, Doe contends, should be recast as though the funds moved directly

 4   from the SDGTs to JPMorgan.

 5         We decline this invitation because the Global Terrorism Sanctions

 6   Regulations broadly prevent the unlicensed transfer of blocked assets and any

 7   transfer in violation of the Regulations is “null and void.”        See 31 C.F.R. §

 8   594.202(a).   The Regulations, section 594.312, go on define “transfer” in

 9   exceptionally expansive language as “any actual or purported act or transaction .

10   . . the purpose, intent, or effect of which is to create, surrender, release, convey,

11   transfer, or alter, directly or indirectly, any right, remedy, power, privilege, or

12   interest with respect to any property.”        These Regulations mean that any

13   disclaimer by the transmitting banks (Credit Suisse and AHLI) to an interest in

14   the blocked funds is incapable of effecting an unlicensed transfer to anyone and

15   certainly not a transfer “back up the chain” to an originating SDGT.

16   Consequently, disclaimers by intermediary banks can not serve to vest (or re-

                                              13
 1   vest) title to the transferred funds with the originators which were the initial

 2   targets of the sanctions.

 3          Moreover, we are not persuaded to depart from Calderon-Cardona and

 4   Hausler by two unpublished district court decisions in which correspondent

 5   banks waived their interests in blocked EFTs, Vera v. Republic of Cuba, No. 12-cv-

 6   01596, 2015 WL 13657629 (S.D.N.Y. May 8, 2015)5 and Gates v. Syrian Arab

 7   Republic, Nos. 11-cv-8715, 14-cv-6161, 2014 WL 5784859 (N.D. Ill. Nov. 6, 2014).

 8   Doe notes that both of these decisions post-date Calderon-Cardona and Hausler

 9   and analyze the disclaimer distinction in light of those opinions. We, however,

10   note that both Vera and Gates involved unique situations and, most importantly,

11   neither of them accounts for the applicable OFAC regulations which

12   unambiguously prohibit unlicensed transfers of blocked assets.6 Consequently,

13   we do not find them persuasive.

14                                            CONCLUSION

15          For the foregoing reasons, we AFFIRM the judgment of the District Court.

     5
             See also Vera v. Republic of Cuba, No. 12-cv-01596, ECF No. 814 (S.D.N.Y. Sept. 24, 2015) .
     6
             The dissent declines to conclude that the OFAC license requirement is clearly applicable in
     these circumstances. See Dissent, op. at 11. We respectfully see no authority for this view.

                                                     14
DENNY CHIN, Circuit Judge: 

             I respectfully dissent.   

             It is undisputed that Doe satisfies the first three requirements of the 

Terrorism Risk Insurance Act (ʺTRIAʺ), Pub. L. No. 107‐297, § 291, 116 Stat. 2322, 

2337 (2002) (codified at 28 U.S.C. § 1610 note):  (1) he obtained a judgment 

against a terrorist party, (2) based upon an act of terrorism, and (3) execution is 

sought only to the extent of compensatory damages.  The only question is 

whether the funds are ʺblocked assetsʺ of Specially Designated Global Terrorists 

(ʺSDGTsʺ), subject to attachment under Section 201(a) of the TRIA.  The majority 

concludes they are not, relying on this Courtʹs decisions in Hausler v. JP Morgan 

Chase Bank, 770 F.3d 207 (2d Cir. 2014) (per curiam), and Calderon‐Cardona v. Bank 

of N.Y. Mellon, 770 F.3d 993 (2d Cir. 2014).  I believe the cases are distinguishable, 

however, and for the reasons set forth below, I disagree. 

             It is undisputed that the funds at issue originated with Grand Stores 

Ltd. (ʺGrand Storesʺ) and Tajco Ltd. (ʺTajcoʺ), as they initiated the electronic fund 

transfers (ʺEFTsʺ) that have been blocked by JPMorgan Chase Bank, N.A. 

(ʺJPMorganʺ).  It is also undisputed that Grand Stores and Tajco are agents and 

instrumentalities of the Fuerzas Armadas Revolucion de Colombia (ʺFARCʺ), a 
designated SDGT, and Doe holds judgments against the Ejército De Liberación 

Nacional (ʺELNʺ) and against FARC for his kidnapping and torture by them.  

Doe argues that because, under the New York Uniform Commercial Code (ʺN.Y. 

U.C.C.ʺ), the originators of an EFT retain an interest in interrupted fund 

transfers, and here, the originators are SDGTs, the funds in the blocked accounts 

are attachable ʺblocked assetsʺ under the TRIA for purposes of satisfying Doeʹs 

judgment.  See Heiser v. Islamic Republic of Iran, 735 F.3d 934, 941 (D.C. Cir. 2013) 

(explaining that under U.C.C. § 4A‐402(d)‐(e), ʺclaims on an interrupted funds 

transfer ultimately belong to the originatorʺ);1 Bank of N.Y. v. Nickel, 14 A.D.3d 

140, 145 (N.Y. App. Div. 1st Depʹt 2004) (ʺ[T]he right to attach the property is 

only the same as the defendantʹs own interest in it.ʺ) (internal quotation marks 

omitted)). 2 

                                                 
1           This provision has been adopted by the N.Y. U.C.C.  See N.Y. U.C.C. § 4‐A‐402.  
2           The TRIA defines a ʺblocked assetʺ as ʺany asset seized or frozen by the United 
States under section 5(b) of the Trading With the Enemy Act (50 U.S.C. App. 5(b)) or 
under sections 202 and 203 of the International Emergency Economic Powers Act (50 
U.S.C. 1701, 1702).ʺ  TRIA § 201(d)(2)(A).  As discussed in the majority opinion, the 
Department of the Treasury Office of Foreign Assets Control (ʺOFACʺ) regulations that 
blocked the EFTs at issue were promulgated pursuant to Executive Order 13224, 66 Fed. 
Reg. 49079 (Sept. 23, 2001) § 7, which executive authority was invoked under the IEEPA, 
50 U.S.C. §§ 1701 et seq.  The regulations block any ʺproperty and interests in propertyʺ 
of SDGTs.  31 C.F.R. § 594.201(a); see also id. § 594.310 (defining SDGT as ʺany person 
whose property and interests in property are blocked pursuant to § 594.201(a)ʺ). 
                                             2 
 
             I agree.  First, attachment is consistent with the plain language and 

purpose of the TRIA.  The TRIA was enacted to ʺaid victims of terrorism to 

satisfy their judgmentsʺ by authorizing judgment holders to attach the blocked 

assets of liable terrorist parties.  Calderon‐Cardona, 770 F.3d at 998; see also 

Weininger v. Castro, 462 F. Supp. 2d 457, 483 (S.D.N.Y. 2006) (explaining that the 

purpose of TRIA § 201 ʺis to ʹdeal comprehensively with the problem of 

enforcement of judgments rendered on behalf of victims of terrorism in any court 

of competent jurisdiction by enabling them to satisfy such judgments through 

the attachment of blocked assets of terrorist parties.ʹʺ) (quoting H.R. Conf. Rep. 

No. 107–779, at 27 (2002)).   

             In relevant part, section 201 of the TRIA, provides that: 

                  Notwithstanding any other provision of law, 
                  and except as provided in subsection (b), in 
                  every case in which a person has obtained a 
                  judgment against a terrorist party on a claim 
                  based on an act of terrorism, or for which a 
                  terrorist party is not immune under [28 
                  U.S.C. § 1605(a)(7)], the blocked assets of that 
                  terrorist party (including the blocked assets 
                  of any agency or instrumentality of that 
                  terrorist party) shall be subject to execution 
                  or attachment in the aid of execution in order 
                  to satisfy such judgment to the extent of any 
                  compensatory damages for which such 
                  terrorist party has been adjudged liable.   

                                            3 
 
TRIA § 201(a).  As Doe is a victim of terrorism and holds a judgment against a 

terrorist party, and the EFTs were blocked pursuant to OFAC regulations as 

ʺproperty or [an] interest[] in propertyʺ of that terrorist partyʹs agents or 

instrumentalities, this case seems precisely to fall within the situation 

contemplated by the TRIA.  31 C.F.R. § 594.201(a). 

             Second, Hausler and Calderon‐Cardona are not factually analogous, 

and, in my view, do not preclude attachment under these circumstances.  Hausler 

involved non‐terrorist entities who had attempted to transfer funds to a terrorist 

party, but the funds were blocked and never became the property of the terrorist 

party.  There, we held that the funds were not subject to execution under the 

TRIA because they were not the ʺassets ofʺ a terrorist party.  Hausler, 770 F.3d at 

211 (citing TRIA § 201). 

             Calderon‐Cardona, on the other hand, involved blocked EFTs that 

allegedly contained funds belonging to North Korea or an agency or 

instrumentality of North Korea.  In that case, we held that TRIA § 201(a) did not 

apply because North Korea was not designated as a ʺterrorist partyʺ at the time 

the judgment was issued.  See Calderon‐Cardona, 770 F.3d at 999.  We considered, 

however, whether victims could instead recover under the Foreign Sovereign 

                                           4 
 
Immunities Act, 28 U.S.C. § 1602 et seq., which also utilizes New York law 

governing EFTs.  Nevertheless, we held that there were factual issues 

surrounding whether the entities that transmitted the EFTs to the blocking banks 

were agencies or instrumentalities of North Korea and remanded the case to 

develop that information.  See id. at 1002. 

             Unlike in Hausler and Calderon‐Cardona, there is no dispute in this 

case that the originating parties are designated terrorist parties.  See, e.g., Martinez 

v. Republic of Cuba, 149 F. Supp. 3d 469, 479 (S.D.N.Y. 2016) (explaining that Vera 

v. Republic of Cuba, No. 12 Civ. 1596 (AKH) (S.D.N.Y. Sept. 24, 2015), was 

distinguishable from Calderon‐Cardona and Hausler because it involved a 

transaction that undisputedly originated with a terrorist party).  Moreover, 

unlike in Hausler and Calderon‐Carona, the upstream banks in this case have 

disclaimed any interest they might have in the funds.   

             There appear to have only been two other cases involving blocked 

fund transfers that were originated by terrorist parties and where the upstream 

banks had waived or disclaimed any interest in the funds.  In both cases, the 

district courts concluded that our decisions in Hausler and Calderon‐Cardona did 

not prevent turnover. 

                                           5 
 
             In Vera v. Republic of Cuba, No. 12 Civ. 1596 (AKH) (S.D.N.Y. Sept. 24, 

2015), a Cuban bank, as originator, was attempting to move money between two 

of its accounts at other banks.  The money was blocked midstream pursuant to 

U.S. banking regulations.  The correspondent bank in that case argued that it was 

merely acting as an agent for the originatorʹs bank, which was acting as an agent 

for the originator that was subject to sanctions.  The court held that because the 

funds could not be returned to the Cuban bank, petitioners were entitled to them 

under U.S. law. 

             In Gates v. Syrian Arab Republic, 2014 WL 5784859 (N.D. Ill. Nov. 6, 

2014), the originator and beneficiary of a blocked funds transfer was an 

instrumentality of Syria, and Syria was subject to U.S. sanctions.  As in this case, 

the intermediary bank disclaimed any interest it had in the blocked EFT.  The 

defendant in Gates also argued that, under Hausler and Calderon‐Cardona, the 

blocked funds could not be attached because they were solely the property of the 

intermediary bank.  See id., at *2.  The district court, however, rejected the 

argument, and concluded that the funds were attachable because:  (1) when the 

ʺtransferor immediately preceding [the beneficiary bank] disclaim[s] any interest 

in the fundsʺ then, ʺ[u]nder the U.C.C., the only party to whom those funds 

                                           6 
 
would belong would be [the originator],ʺ id. at *2; and (2) allowing attachment 

was consistent with the ʺbroad purpose of [the TRIA],ʺ which ʺis to compensate 

victims of state sponsored terrorism at the expense of state sponsors of terror,ʺ id. 

at *3.  The court specifically noted that when the upstream bank disclaims any 

interest in the blocked accounts, any risk of impact to innocent parties is obviated 

and the ʺEFTs are attachable.ʺ  Id. at *3.   

              Here, because Grand Stores and Tajco retained an interest in the 

funds as the originators of the EFTs, and all parties with superior claims have 

disclaimed any interest they might have, I would conclude that the blocked 

funds are ʺblocked assetsʺ subject to attachment under § 201(a) of the TRIA.  

Under the majorityʹs opinion, the funds remain frozen indefinitely in a blocked 

account at JPMorgan, which does nothing to further the purpose of the TRIA.3   

              Finally, I have some technical concerns with the majorityʹs analysis.  

Its conclusion is as follows:  The funds are not the ʺblocked assetsʺ of the SDGTs 

                                                 
3           Defendants‐appellees contend that because, under Hausler and Calderon‐Cardona, 
the banks were the rightful owners of the EFTs, their disclaimers have likely rendered 
the funds ʺabandoned property under New Yorkʹs Abandoned Property Law and 
therefore subject to turnover to the State of New York upon the lifting of sanctions or 
the receipt of a license from OFAC.ʺ  Def.‐Appellee Deutsche Bank Br. at 5 n.2.  Giving 
the funds to New York State, rather than to Doe, certainly would not further the 
purpose of the TRIA. 
                                             7 
 
because (a) under New York law, EFTs are ʺneither the property of the originator 

nor the beneficiary while briefly in the possession of an intermediary bankʺ; (b) 

here, Credit Suisse AG and AHLI United Bank UK PLC, the intermediary banks, 

ʺimmediately preced[ed]ʺ the holding bank and thus are the ʺonly entit[ies] with 

[] property interest[s]ʺ in the EFTs; and (c) Credit Suisse and AHLI are not 

SDGTs so the funds do not constitute the ʺblocked assetsʺ of a designated 

terrorist party.  See Maj. Op. at 10‐12. 

             This conclusion is inherently at odds with OFAC regulations that 

require the ʺproperty and interests in propertyʺ of SDGTs to be blocked in the 

first place.  See 31 C.F.R. § 594.201(a).  If an SDGTʹs interest in funds is, in effect, 

entirely extinguished while temporarily midstream, there would be no 

authorization to block those midstream funds as ʺproperty [or] interests in 

propertyʺ of a designated terrorist party because that property would belong 

solely to the intermediary bank, not a designated terrorist party.  See Maj. Op. at 

10 (ʺ[T]he only entity with a property interest in an EFT while it is midstream is 

the entity immediately preceding the bank ʹholdingʹ the EFT in the transaction 

chain.ʺ (emphasis in original)).  That result is inconsistent with our 

understanding of how the economic sanctions regime works.  See Maj. Op. at 5 

                                            8 
 
(explaining that the relevant economic sanctions require U.S. banks to block 

ʺproperty and interests in propertyʺ of designated entities, see 31 C.F.R. § 

594.201(a), which includes transactions to and from SDGTs); see also FDA v. 

Brown & Williamson Tobacco Corp., 529 U.S. 120, 133 (2000) (ʺA court must . . . 

interpret [a] statute as a symmetrical and coherent regulatory scheme, and fit, if 

possible, all parts into a harmonious whole.ʺ (internal citation and quotation 

marks omitted)).  Under that theory, JPMorgan should not have blocked the 

funds at all, as the funds would not then be assets of an SDGT. 

              Hence, if we are to read Hausler and Calderon‐Cardona to compel 

such a result, it is not clear what funds transfer could ever be blocked while 

midstream.  See 31 C.F.R. § 594.201(a) (blocking the ʺproperty and interests in 

propertyʺ of SDGTs).  A vast amount of everyday banking occurs through EFTs.  

It is difficult to imagine a scenario where a terrorist party would directly pass 

funds to a blocking bank without using its own bank or an intermediary bank to 

execute that transaction on its behalf.4  If we are to adhere to the majorityʹs 

                                                 
4           This scenario would only seem to occur where the terrorist party is designated as 
a state sponsor of terrorism and utilizes its state‐owned financial institutions to conduct 
its banking.  See, e.g., Calderon‐Cardona, 770 F.3d at 1002 (explaining, in the context of 
EFTs involving North Korea, that EFTs are attachable only where ʺeither the state itself 
or an agency or instrumentality thereof (such as a state‐owned financial institution) 
transmitted the EFT directly to the bank where the EFT is held pursuant to the blockʺ).  
                                              9 
 
reasoning, a significantly high‐risk area of terror financing would, in effect, be 

read entirely out of reach of the sanctions.   

                                            . . . 

              In this case, the United States also filed an amicus brief in which it 

argued that, even assuming the SDGTs had an interest in the funds, the banksʹ 

purported disclaimers were without effect because OFAC regulations prohibit 

entities from transferring interests in blocked property without receiving an 

OFAC license. 5  The majority agrees with the Government that ʺany disclaimer  

. . . is incapable of effecting an unlicensed transfer to anyone and certainly not a 

transfer ʹback up the chainʹ to an originating SDGT.ʺ  Maj. Op. at 13. 

              In Harrison v. Republic of Sudan, however, we held that TRIA 

judgment holders ʺare exempt from the normal OFAC licensure requirement.ʺ  

802 F.3d 399, 406‐07 (2d Cir. 2015), cert. granted on other grounds, ‐‐ S. Ct. ‐‐‐‐, 2018 

                                                 
This is, however, only one of many areas of terror financing that OFAC sanctions target.  
The sanctions also encompass lists of designated terrorist parties, which include 
transnational terrorist organizations and individuals.  See Executive Order 13224, 66 
Fed. Reg. 49079 (Sept. 23, 2001) § 1(c)‐(d). 
5           A ʺtransferʺ is defined as including ʺany actual or purported act or transactionʺ 
to ʺsurrenderʺ or ʺreleaseʺ an interest ʺwith respect to any [blocked] property.ʺ  31 
C.F.R. § 594.312.  Any transfer in violation of this restriction ʺis null and void and shall 
not be the basis for the assertion or recognition of any interest in or right, right, power, 
or privilege with respect toʺ the blocked property.  Id. § 594.202(a).   
                                             10 
 
WL 3096369 (Mem) (June 25, 2018) (relying on a number of Statements of Interest 

from the Government that stated that TRIA judgment holders were exempt from 

OFAC licensure requirements).  Although we did not face the question of 

whether an OFAC license was required prior to a bankʹs disclaimer of its property 

interests in blocked assets, I disagree with the majority that the OFAC license 

requirement is clearly applicable in these circumstances.6    

              For the reasons set forth above, in my view, the funds are attachable 

as consistent with the TRIAʹs broad purpose of allowing victims of terrorism to 

use blocked assets of liable terrorist parties to satisfy judgments.  See Gates, 2014 

WL 5784859, at *2. 

              Accordingly, I dissent. 

                                                 
6           The district court in Vera relied on our decision in Harrison and allowed 
attachment without an OFAC license.  See Vera, No. 12 Civ. 1596 (AKH), ECF No. 814 at 
6 n.2.  In a later case, Martinez v. Republic of Cuba, 149 F. Supp. 3d 469 (S.D.N.Y. 2016), 
the Government filed a Statement of Interest and raised the same arguments as it does 
here with respect to the OFAC license requirement.  It argued that a bank cannot 
disclaim its interest without an OFAC license, but that, ʺsetting aside [this] error . . . [the 
courtʹs] reasoning in [Vera] is inapplicable here for the additional reason that there is no 
indicationʺ that the terrorist party was the ʺoriginatorʺ of the funds in Martinez unlike in 
Vera.  See Martinez, No. 07 Civ. 6607 (VM), ECF No. 97, at 6. 
                                              11