Terror Award Against|Iranian Bank Upheld

     (CN) – “Creative arguments” by Iran’s central bank cannot save it from paying nearly $17.6 million to the victims of terrorist attacks in Israel, Saudi Arabia and elsewhere, the Ninth Circuit ruled Wednesday.
     In 2002, a 24-year-old student named Marla Bennett died in a Hamas-sponsored cafeteria bombing at Hebrew University in Jerusalem.
     Blaming Iran for financing the attacks, her family filed a federal complaint in Washington, D.C., that ended in a $12.9 million judgment against the republic.
     Other lawsuits alleging that Iran bankrolled terrorism followed, leading to awards of $20 million for a bombing of a Jerusalem restaurant, $350 million for a 1990 mass shooting, and $590 million for the bombing of the Khobar Towers in Saudi Arabia.
     Though nobody disputes the validity of the judgments, the Ninth Circuit’s opinion Thursday notes that “winning a money judgment against a foreign state isn’t the end of the story, because sovereign immunity separately protects the assets of a foreign sovereign from attachment.”
     An apparent loophole under the Foreign Sovereigns Immunity Act had created a “right without a meaningful remedy,” Judge Alex Kozinski wrote for a three-person panel in San Francisco.
     Congress amended the statute twice in 2002 and 2008 to address this concern.
     “These two statutes give creditors a theoretical avenue to collect on the judgments they’ve obtained,” Kozinski wrote. “But, of course, they have to find the money first – and Iranian assets within the United States are notoriously hard to come by.”
     When the Department of the Treasury blocked the transfer of Iranian assets held in the United States in 2007, Visa and Franklin Resources were unable to transfer $17.6 million in assets that they owed Bank Melli.
     The case at hand stems from a lawsuit the creditors brought in California for that amount to seize on the opportunity.
     A federal judge in San Francisco advanced the case despite Bank Melli’s claims that, as Iran’s national bank, it is immune from the action because it is an instrumentality rather than an alter ego.
     The Ninth Circuit affirmed this finding Thursday.
     “Bank Melli has set forth numerous creative arguments as to why it shouldn’t be liable for Iran’s debt,” Kozinski’s 18-page opinion states. “But this is an arena in which Congress has spoken with unmistakable clarity.”
     The panel tore through Bank Melli’s argument that it does not “own” the Visa and Franklin Resources assets because the funds have been blocked.
     “The fact that Bank Melli is not yet in physical possession of the funds is immaterial,” the opinion says.
     Lawyers for Bank Melli and the creditors did not immediately respond to a request for comment.

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