[HARTFORD, CT] – Earlier today, outside the U.S. District Court in Hartford, U.S. Senator Richard Blumenthal (D-CT) announced a new bill to hold state sponsors of terrorism accountable for atrocities committed against Americans. The Terrorism Victims Protection Act would amend current law to close loopholes that have allowed countries that are considered by the U.S. government to be state sponsors of terror – like Iran – to shield funds through transfers to and from foreign banks.
“Victims of terrorism and their families have waged courageous legal campaigns to hold state sponsors of terrorism accountable for their atrocities, only to be thwarted by legal loopholes that have allowed those nations to hide funds through illegal transfers to and from foreign banks. My bill will ensure that state sponsors of terrorism cannot hide from American justice,” Blumenthal said.
Blumenthal was joined at today’s announcement by survivors and families of U.S. Marines killed in the 1983 Beirut barracks bombing. Six Connecticut Marines were among the 241 U.S. peacekeepers killed in Beirut, Lebanon in 1983 by a suicide bomber who drove a truck into a military barracks. The victims and their families are seeking to collect $1.67 billion following a successful lawsuit against Iran for its role in supporting the attack, yet have been thwarted in their efforts due to legal loopholes that allow Iran to shield funds through transfers to and from foreign banks.
Under U.S. law, a victim of terrorism can sue in U.S. courts and win a civil judgment against the terrorist or sponsor of terror who victimized them. But since few terrorists or terror sponsors have assets subject to the jurisdiction of U.S. courts, terror victims who have won a judgment must then find a way to recover the funds they have been legally awarded. The Terrorism Victims Protection Act would close two loopholes in the current law that can prevent victims and their families from collecting on judgments against state sponsors of terrorism.
Funds-in-Transit: The Treasury Department often blocks assets sent by or to a terrorist or sponsor of terrorism by intercepting electronic fund transfers. However, courts currently classify funds that are transferred between banks as belonging to the financial institutions that temporarily hold them rather than as belonging to the persons or states that send or receive them. This loophole prevents terror victims from seizing blocked funds that were transiting the U.S. financial system. The Terrorism Victims Protection Act would clarify that blocked, in-transit funds are the property of the terrorist or state sponsor of terror.
Fund Transfers Out of the United States: A loophole in current law allows banks to avoid the jurisdiction of U.S. courts by transferring funds out of the United States, even when the banks should know that such transfers are illegal. Although financial institutions should not be held accountable for accidental transfers, the Terrorism Victims Protection Act would ensure that banks do not transfer funds out of accounts that should have been blocked pursuant to applicable Executive branch orders relating to state sponsors of terror.