Report text available as:

  • TXT
  • PDF   (PDF provides a complete and accurate display of this text.) Tip ?

106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     106-733

======================================================================



 
                  JUSTICE FOR VICTIMS OF TERRORISM ACT

                                _______
                                

 July 13, 2000.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Hyde, from the Committee on the Judiciary, submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 3485]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on the Judiciary, to whom was referred the bill 
(H.R. 3485) modifying the enforcement of certain anti-terrorism 
judgments, and for other purposes, having considered the same, 
reports favorably thereon with an amendment and recommends that 
the bill as amended do pass.

                                CONTENTS

                                                                   Page
The Amendment....................................................     2
Purpose and Summary..............................................     3
Background and Need for the Legislation..........................     3
Hearings.........................................................     6
Committee Consideration..........................................     6
Committee Oversight Findings.....................................     6
Committee on Government Reform Findings..........................     6
New Budget Authority and Tax Expenditures........................     7
Congressional Budget Office Cost Estimate........................     7
Constitutional Authority Statement...............................     9
Section-by-Section Analysis and Discussion.......................     9
Agency Views.....................................................    10
Changes in Existing Law Made by the Bill, as Reported............    21
Additional Views.................................................    25

  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. ENFORCEMENT OF CERTAIN ANTI-TERRORISM JUDGMENTS.

  (a) Short Title.--This Act may be cited as the ``Justice for Victims 
of Terrorism Act''.
  (b) Definition.--
          (1) In general.--Section 1603(b) of title 28, United States 
        Code, is amended--
                  (A) in paragraph (3) by striking the period and 
                inserting a semicolon and ``and'';
                  (B) by redesignating paragraphs (1), (2), and (3) as 
                subparagraphs (A), (B), and (C), respectively;
                  (C) by striking ``(b)'' through ``entity--'' and 
                inserting the following:
  ``(b) An `agency or instrumentality of a foreign state' means--
          ``(1) any entity--''; and
                  (D) by adding at the end the following:
          ``(2) for purposes of sections 1605(a)(7) and 1610 (a)(7) and 
        (f), any entity as defined under subparagraphs (A) and (B) of 
        paragraph (1), and subparagraph (C) of paragraph (1) shall not 
        apply.''.
          (2) Technical and conforming amendment.--Section 1391(f)(3) 
        of title 28, United States Code, is amended by striking 
        ``1603(b)'' and inserting ``1603(b)(1)''.
  (c) Enforcement of Judgments.--Section 1610(f) of title 28, United 
States Code, is amended--
          (1) in paragraph (1)--
                  (A) in subparagraph (A) by striking ``(including any 
                agency or instrumentality or such state)'' and 
                inserting ``(including any agency or instrumentality of 
                such state)''; and
                  (B) by adding at the end the following:
  ``(C) Notwithstanding any other provision of law, moneys due from or 
payable by the United States (including any agency, subdivision or 
instrumentality thereof) to any state against which a judgment is 
pending under section 1605(a)(7) shall be subject to attachment and 
execution, in like manner and to the same extent as if the United 
States were a private person.''; and
          (2) by adding at the end the following:
  ``(3)(A) Subject to subparagraph (B), upon determining on an asset-
by-asset basis that a waiver is necessary in the national security 
interest, the President may waive this subsection in connection with 
(and prior to the enforcement of) any judicial order directing 
attachment in aid of execution or execution against any property 
subject to the Vienna Convention on Diplomatic Relations or the Vienna 
Convention on Consular Relations.
  ``(B) A waiver under this paragraph shall not apply to--
          ``(i) if property subject to the Vienna Convention on 
        Diplomatic Relations or the Vienna Convention on Consular 
        Relations has been used for any nondiplomatic purpose 
        (including use as rental property), the proceeds of such use; 
        or
          ``(ii) if any asset subject to the Vienna Convention on 
        Diplomatic Relations or the Vienna Convention on Consular 
        Relations is sold or otherwise transferred for value to a third 
        party, the proceeds of such sale or transfer.
  ``(C) In this paragraph, the term `property subject to the Vienna 
Convention on Diplomatic Relations or the Vienna Convention on Consular 
Relations' and the term `asset subject to the Vienna Convention on 
Diplomatic Relations or the Vienna Convention on Consular Relations' 
mean any property or asset, respectively, the attachment in aid of 
execution or execution of which would result in a violation of an 
obligation of the United States under the Vienna Convention on 
Diplomatic Relations or the Vienna Convention on Consular Relations, as 
the case may be.
  ``(4) For purposes of this subsection, all assets of any agency or 
instrumentality of a foreign state shall be treated as assets of that 
foreign state.''.
  (d) Technical and Conforming Amendment.--Section 117(d) of the 
Treasury Department Appropriations Act, 1999 (Public Law 105-277; 112 
Stat. 2681-492) is repealed.
  (e) Effective Date.--The amendments made by this section shall apply 
to any claim for which a foreign state is not immune under section 
1605(a)(7) of title 28, United States Code, arising before, on, or 
after the date of enactment of this Act.

SEC. 2. PAYGO ADJUSTMENT.

  The Director of the Office of Management and Budget shall not make 
any estimates of changes in direct spending outlays and receipts under 
section 252(d) of the Balanced Budget and Emergency Deficit Control Act 
of 1985 (2 U.S.C. 902(d)) for any fiscal year resulting from enactment 
of this Act.

SEC. 3. TECHNICAL AMENDMENTS TO IMPROVE LITIGATION PROCEDURES AND 
                    REMOVE LIMITATIONS ON LIABILITY.

  (a) General Exceptions to Jurisdictional Immunity of Foreign State.--
Section 1605 of title 28, United States Code, is amended by adding at 
the end the following:
  ``(h) If a foreign state, or its agency or instrumentality, is a 
party to an action pursuant to subsection (a)(7) and fails to furnish 
any testimony, document, or other thing upon a duly issued discovery 
order by the court in the action, such failure shall be deemed an 
admission of any fact with respect to which the discovery order 
relates. Nothing in this subsection shall supersede the limitations set 
forth in subsection (g).''.
  (b) Extent of Liability.--Section 1606 of title 28, United States 
Code, is amended by adding at the end the following: ``No Federal or 
State statutory limits shall apply to the amount of compensatory, 
actual, or punitive damages permitted to be awarded to persons under 
section 1605(a)(7) and this section.''.

                          Purpose and Summary

    H.R. 3485 would allow victims of terrorism to satisfy 
judgments against foreign states by allowing assets frozen by 
the U.S. to be subject to attachment and execution. While 
providing for the protection of embassies and assets necessary 
for their actual operating expenses from attachment and 
execution if the President deems it necessary in the interest 
of national security, H.R. 3485 provides that protection is 
specifically denied under the bill for proceeds from any 
property which has been used for any non-diplomatic purpose 
(including rental property) or for proceeds from any asset 
which is sold or transferred for value to a third party.

                Background and Need for the Legislation

    In March 1985, Terry Anderson, an American journalist 
working in Beirut, was kidnapped by agents of the Islamic 
Republic of Iran. He was held captive by his kidnappers in 
deplorable conditions until early December 1991.
    During the 1980's, three other individuals working in 
Lebanon, David Jacobsen, an administrator of the American 
University hospital in Beirut, Joseph Ciccippio, a comptroller 
of the America University school and hospital and Frank Reed, a 
principal of a private secondary school in Beirut, were also 
held captive by agents of the Islamic Republic of Iran.
    In April 1995, Alisa Flatow, a 20-year-old college student 
from New Jersey, was on a bus on the Gaza strip going to a 
Passover holiday celebration. A terrorist from the Iranian 
backed Islamic Jihad rammed his car loaded with explosives into 
the bus, killing Ms. Flatow and seven others.
    Two Americans studying in Israel, Matthew Eisenfeld and 
Sara Duker were killed in a suicide bombing of a bus in 
Jerusalem in February 1996. Those responsible were provided 
training, money, and resources by Iran.
    Also in February 1996, Cuban MiG aircraft shot down two 
aircraft flown by the ``Brothers to the Rescue'' organization 
in international airspace over the Florida Straits. Three 
American citizens were killed in the attack.
    After the Brothers to the Rescue incident, at a February 
26, 1996, White House press briefing President Clinton stated 
``I am asking that Congress pass legislation that will provide 
immediate compensation to the families, something to which they 
are entitled under international law, out of Cuba's blocked 
assets here in the United States. If Congress passes this 
legislation, we can provide the compensation immediately.''
    The Brothers to the Rescue families did receive $300,000 
each ($1.2 million total) out of Cuban blocked assets as, in 
the President's words, a ``humanitarian gesture'' with 
assurances from the Department of State that those payments 
would not affect receiving their full judgment.
    In 1996, the Antiterrorism and Effective Death Penalty Act 
became law. That law allowed American citizens injured in an 
act of terrorism or their survivors to bring a private lawsuit 
against the terrorist state responsible for that act.
    Upon enactment of the Antiterrorism and Effective Death 
Penalty Act, several victims of terrorism or their families 
filed suit against terrorist states. There are several cases 
pending in U.S. courts by the families of victims of terrorism. 
To date, judgments have been awarded to families of victims in 
ten cases.
    The three Brothers to the Rescue victims' families went to 
court and on December 17, 1997, in separate but related 
judgments were awarded $48 million in compensatory damages and 
$132 million in punitive damages, plus nearly $20 million in 
post-judgment interest and costs. The administration fought to 
block the attempted attachment of any Cuban assets to satisfy 
that award.
    In March 1998, Alisa Flatow's family went to court and was 
awarded $22.5 million in compensatory damages and $225 million 
in punitive damages. The administration fought to block the 
attachment of any Iranian assets to satisfy the award.
    In August 1998, David Jacobsen, Joseph Ciccippio and his 
wife, and Frank Reed and his wife, were awarded a total of $65 
million in compensatory damages. They were not awarded any 
punitive damages. The administration fought to block the 
attachment of any Iranian assets to satisfy the award.
    In 1999, the Congress passed Section 117 of the Fiscal Year 
1999 Treasury Department Appropriations Act, mandating that the 
Executive Branch must allow Americans to attach the assets of 
terrorist states in the U.S. in order to collect judgments won 
in Federal court. That legislation included a provision for a 
Presidential waiver to block the attachment of assets if it was 
in the interest of national security.
    In Presidential Determination No. 99-1, the President 
determined that the authority granted by Section 117 for the 
attachment of assets of terrorist states in general would 
impede foreign policy and therefore would not be in the 
interest of national security. This determination effectively 
applied the Presidential waiver in Section 117 to all judgments 
attempting to attach to terrorist state assets.
    On August 11, 1999, in Alejandre v. Republic of Cuba, 183 
F.3d. 1277 (11th Cir. Aug. 11, 1999), the U.S. Court of Appeals 
ruled that congressional intent in passing Section 117 was 
unclear as to whether all blocked assets of an agency or 
instrumentality of a terrorist state could be executed upon to 
satisfy an Anti-Terrorism Act judgment. The Court cited the 
1983 Supreme Court ruling in First National City Bank v. Banco 
Para El Comercio de Cuba, 462 U.S. 611 (1983), when coming to 
the conclusion that without an indication of more explicit 
intent by the Congress, the court was compelled to determine 
that the Foreign Sovereign Immunities Act does not intend that 
there is cross-liability between parent and subsidiary entities 
without the presence of fraud or a determination that the 
subsidiary is an alter ego of the parent entity.
    On November 15, 1999, in Stephen M. Flatow v. The Islamic 
Republic of Iran, C.A. No. 97-396 (RCL), the U.S. District 
Court of the District of Columbia ruled in favor of the United 
States' motion to quash Mr. Flatow's attempt to attach certain 
assets and monies held by the U.S. to satisfy his judgment. In 
that ruling the court stated ``Because this Court finds that 
Congress has not clearly and unequivocally waived the United 
States' sovereign immunity, the Court grants the United States 
Motion to Quash the Writ of Attachment.''
    In March 2000, Terry Anderson and his family were awarded 
$41.2 million in compensatory damages and $300 million in 
punitive damages by the U.S. District Court for the District of 
Columbia. It is expected that the Presidential waiver will be 
used to the block the attachment of any Iranian assets to 
satisfy their judgement as well.
    On July 11, 2000, the families of Matthew Eisenfeld and 
Sara Duker were awarded $327 million in compensatory and 
punitive damages by the U.S. District Court for the District of 
Columbia. The administration will certainly assert the 
Presidential waiver to block the attachment of any Iranian 
assets to satisfy their judgement as well.
    The President's continued use of his waiver power has 
frustrated the legitimate rights of victims of terrorism, and 
thus this legislation is required. While still allowing the 
President to block the attachment of embassies and necessary 
operating assets, H.R. 3485 would amend the law to specifically 
deny blockage of attachment of proceeds from any property which 
has been used for any non-diplomatic purpose or of proceeds 
from any asset which is sold or transferred for value to a 
third party.
    Two amendments were adopted during committee consideration. 
One amendment was offerred by Congressman Bill McCollum and the 
other by Congressman John Conyers.
    The amendment offered by Mr. McCollum and accepted by the 
committee clarifies that property properly characterized as 
diplomatic under the Vienna Convention on Diplomatic Relations 
or the Vienna Convention on Consular Relations is not subject 
to attachment in aid of execution or execution. The 
administration had concerns that the bill could be construed to 
allow execution against diplomatic property under the Vienna 
Convention in a way that would create a liability on behalf of 
the United States. The McCollum amendment is intended to 
prevent such liability.
    It is important to note that for assets which could be 
deemed diplomatic property and which the administration fears 
execution against would violate international agreements, the 
administration has not provided any evidence that the execution 
of such blocked assets is inconsistent with any international 
agreement. Yet, in light of concerns expressed by the 
administration that execution, unlike blocking, would cause 
liability, the McCollum amendment assures that the definition 
of diplomatic property which is protected from execution in 
H.R. 3485 is the same definition of diplomatic property in the 
Vienna Convention.
    The amendment offered by Mr. Conyers and accepted by the 
committee would (1) provide that when a country which sponsors 
terrorism and is a party in a trial brought under the Anti-
Terrorism Act does not provide the necessary evidence required 
under any discovery order, the Court can impose any type of 
sanction available by law on that country; and (2) provide that 
no Federal or State statutory limits will apply to the amount 
of compensatory, actual, or punitive damages that can be 
awarded to individuals by the courts in these victim of 
terrorism cases.
    The committee would note that although the Congressional 
Budget Office estimates the cost of H.R. 3485 at $405 million, 
they admit that:

          Enactment of H.R. 3485 could result in savings in 
        later years if future disbursements that would 
        otherwise have to be made under current law were 
        reduced because of the payments made in 2001. CBO has 
        no basis for estimating these effects--if any--because 
        they would depend on future decisions of the 
        international Iran-U.S. Claims Tribunal and the 
        responses of the United States and Iran to these 
        decisions.

    The CBO scoring of this bill is based on all sources of 
money held by the U.S. that will potentially be available to 
pay out to claimants rather than actual known outlays. The 
committee believes that any attempt at a definitive cost 
analysis at this time on H.R. 3485 is futile due to the 
uncertainty of the many factors, some of which are mentioned in 
the above portion of the CBO estimate.

                                Hearings

    The committee's Subcommittee on Immigration and Claims held 
a hearing on H.R. 3485 on April 13, 2000. Testimony was 
received from Terry A. Anderson; Stephen M. Flatow; Maggie A. 
Khuly; and Ronald W. Kleinman, Esquire, with additional 
material submitted by Robin L. Higgins; Joseph & Elham 
Cicippio; Frank & Fifi Reed; David P. Jacobsen; Stewart 
Eizenstat, Deputy Secretary of the Treasury; and the Honorable 
Lincoln Diaz-Balart.

                        Committee Consideration

    On June 21, 2000, the committee met in open session and 
ordered favorably reported the bill H.R. 3485 with amendment by 
voice vote, a quorum being present.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the committee reports that the 
findings and recommendations of the committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

                Committee on Government Reform Findings

    No findings or recommendations of the Committee on 
Government Reform were received as referred to in clause 
3(c)(4) of rule XIII of the Rules of the House of 
Representatives.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of House Rule XIII is inapplicable because 
this legislation does not provide new budgetary authority or 
increased tax expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the committee sets forth, with 
respect to the bill, H.R. 3485, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, July 7, 2000.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3485, the Justice 
for Victims of Terrorism Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The principal CBO staff contact is 
Lanette J. Keith.
            Sincerely,
                                          Dan L. Crippen, Director.
    Enclosure.

H.R. 3485--Justice for Victims of Terrorism Act.

    H.R. 3485 would enable victims of Iranian terrorism who 
have won judgments against Iran in U.S. courts to collect 
monetary damages from that country--primarily by obtaining 
certain funds currently held by the U.S. government. As shown 
in the following table, CBO estimates that enacting this bill 
would increase direct spending by about $405 million in 2001; 
therefore, pay-as-you-go procedures would apply.
    Although the bill would pertain to victims of other nations 
that sponsor terrorism, CBO does not expect that any budgetary 
effects would result from judgments against other nations. As 
shown in the following table, CBO estimates that enacting this 
bill would increase direct spending by about $420 million in 
2001; therefore, pay-as-you-go procedures would apply. 
Enactment of H.R. 3485 could result in savings in later years 
if future disbursements that would otherwise have to be made 
under current law were reduced because of the payments made in 
2001. CBO has no basis for estimating these effects--if any--
because they would depend on future decisions of the 
international Iran-U.S. Claims Tribunal and the responses of 
the United States and Iran to these decisions.

                                    [By fiscal year, in millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                       2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING
Estimated Budget Authority                                               405        a        a        a        a
Estimated Outlays                                                        405        a        a        a        a
----------------------------------------------------------------------------------------------------------------
a. H.R. 3485 could result in savings after 2001, but CBO has no basis for estimating such savings--if any--
  because they would depend on future decisions made by the Iran-U.S. Claims Tribunal, the United States, and
  Iran.

    The legislation contains no intergovernmental or private-
sector mandates as defined in the Unfunded Mandates Reform Act 
and would not affect the budgets of state, local, or tribal 
governments.
    Iran is one of seven countries that is designated by the 
federal government as a sponsor of terrorism. (The provisions 
of H.R. 3485 would apply to the other six nations as well; 
however, according to information from the Department of State, 
the only budgetary effect of S. 1796 the bill would involve 
primarily affect assets of Iran.) Under current law, victims of 
state-sponsored terrorism may pursue claims against that 
state's government in U.S. courts. Information from the 
Department of State indicates that victims of Iranian terrorism 
have won punitive and compensatory damages in U.S. courts that 
exceed $650 million.
    The U.S. government currently holds, in the Foreign 
Military Sales (FMS) Trust Fund, about $400 million on behalf 
of Iran previously paid by Iran for the purchase of military 
equipment that was not delivered. The disposition of those 
funds is currently before the Iran-U.S. Claims Tribunal, an 
international body established to settle disputes between the 
two nations. Under current law, victims of terrorist acts may 
attach, by judicial order, property of the Iranian government 
held by the United States. Victims, however, have been unable 
to obtain payment in satisfaction of those judgments because 
the funds they have attached are protected by the federal 
government's sovereign immunity. As a result, those judgments 
remain unpaid.
    By explicitly waiving the federal government's sovereign 
immunity, H.R. 3485 would remove a barrier to the execution of 
the victims' judgments., resulting That action would likely 
result in the payment of these the judgment claims from the FMS 
Trust Fund. As a result, CBO estimates that enacting this 
provision would increase direct spending by $400 million in 
fiscal year 2001. CBO cannot determine whether the payment of 
these claims to terrorist victims would reduce, eliminate, or 
leave unaltered the any liability of the United States to Iran, 
which is yet to be determined by before the Iran-U.S. Claims 
Tribunal. Thus, it is possible that some or all of the funds we 
estimate will be paid to victims of terrorism under this bill 
could be offset by a reduction in payments that would be made 
from the FMS Trust Fund to Iran under current law. CBO, 
however, has no basis for predicting the future decisions of 
the Iran-U.S. Claims Tribunal, nor the response of the federal 
governments to such decisions.
    The bill would also make possible the attachment of rental 
proceeds from leasing Iranian diplomatic property in the United 
States. Under current law, the President has authority to 
preclude such assets from attachment and execution to satisfy 
judgments against states that sponsor terrorism. H.R. 3485 
would limit that authority for rental proceeds. Based on 
information from the Treasury Department, CBO estimates the 
value of such rental proceeds in this country that could be 
seized under this provision to be about $5 million.
    The United States has a custodial responsibility under 
international agreements to maintain diplomatic assets 
belonging to Iran; therefore, the federal government would 
likely be liable to Iran for the loss of this $5 million from 
rental proceeds. If those amounts are seized, CBO anticipates 
that the United States would have to promptly reimburse Iran 
for their value.
    On May 3, 2000, CBO transmitted a cost estimate for S. 
1796, the Justice for Victims of Terrorism Act, as reported by 
the Senate Committee on the Judiciary on March 9, 2000. S. 1796 
would have limited the President's authority to preclude most 
Iranian diplomatic property in the United States from 
attachment and execution to satisfy judgements against Iran. 
H.R. 3485 would limit the President's ability to preclude only 
the rental proceeds of such property. Because of that 
limitation, CBO estimates that H.R. 3485 would result in about 
$15 million less in direct spending than S. 1796.
    The CBO staff contacts for this estimate are Lanette J. 
Keith and John R. Righter, and Joseph C. Whitehill. This 
estimate was approved by Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the committee finds the authority for 
this legislation in Article 1, section 8 of the Constitution.

               Section-by-Section Analysis and Discussion


Section 1(a). Short Title

    This subsection provides that the short title of the 
legislation is the ``Justice for Victims of Terrorism Act''.

Section 1(b). Definition

    This subsection indicates that only part of the statutory 
definition of ``agency or instrumentality of a foreign state'' 
shall apply to any case concerning the attachment and execution 
of property in the United States of a foreign state based on a 
judgement against that foreign state for personal injury or 
death that was caused by an act of torture, extrajudicial 
killing, aircraft sabotage, hostage taking, or the provision of 
material support or resources for such acts by an official, 
employee, or agent of a foreign state.
    The new definition provides that an entity can be deemed an 
agency or instrumentality of the foreign state which sponsored 
the terrorist act regardless of where that entity is 
incorporated.
    This subsection also includes a technical and conforming 
amendment to 28 U.S.C. 1391(f)(3) to change ``1603(b)'' to 
``1603(b)(1)''.

Section 1(c). Enforcement of Judgments

    This subsection states that moneys due from or payable by 
the U.S. to any foreign state which sponsors terrorism and has 
a judgment pending against it for a terrorist act shall be 
subject to attachment and execution as if the U.S. were a 
private entity.
    The subsection also provides that, when it is determined 
that a waiver is necessary in the interest of national 
security, the President may waive this subsection and protect 
any property subject to the Vienna Convention on Diplomatic 
Relations or the Vienna Convention on Consular Relations from 
attachment and execution to satisfy a judgment as well as any 
funds necessary for actual operating expenses of those 
properties. If these properties have been used for any 
nondiplomatic purpose (including use as rental property), the 
proceeds of that use are not subject to such a waiver of this 
subsection. Additionally, this waiver does not apply to any 
proceeds from the sale or transfer to a third party of these 
properties.
    Finally, this subsection provides that there is cross 
liability between any agency or instrumentality of a foreign 
state and the foreign state itself. This provision specifically 
provides that a judgment against a foreign state that sponsors 
terrorism can be executed against assets of an agency or 
instrumentality of that foreign state even if there is no proof 
of fraud or any proof that the agency or instrumentality is an 
alter ego of the foreign state. This is intended to allow 
collection on judgments even in light of First National City 
Bank v. Banco Para El Comercio de Cuba, 462 U.S. 611 (1983).

Section 1(d). Technical and Conforming Amendment

    This subsection repeals Section 117(d) of the Treasury 
Department Appropriations Act of 1999.

Section 1(e). Effective Date

    This subsection provides that all amendments made in 
Section 1 of the bill will apply to any claim involving a 
foreign state that sponsors terrorism which arose before, on, 
or after the date of enactment of this legislation.

Section 2. Technical Amendments to Improve Litigation Procedures and 
        Remove Limitations on Liability

    Subsection (a) would amend 28 U.S.C. 1605 to provide that 
when a country which sponsors terrorism is a party in a trial 
brought under the Anti-Terrorism Act and does not provide the 
necessary evidence required under any discovery order, the 
Court can impose any type of sanction available by law on that 
country. Subsection (b) would amend 28 U.S.C. 1606 to provide 
that no Federal or State statutory limits will apply to the 
amount of compensatory, actual, or punitive damages that can be 
awarded to individuals by the courts in these victims of 
terrorism cases.

                              Agency Views


  TREASURY DEPUTY SECRETARY STUART E. EIZENSTAT, DEFENSE DEPARTMENT; 
UNDER SECRETARY FOR POLICY WALTER SLOCOMBE; AND STATE DEPARTMENT UNDER 
   SECRETARY FOR POLICY THOMAS PICKERING TESTIMONY BEFORE THE HOUSE 
   COMMITTEE ON THE JUDICIARY SUBCOMMITTEE ON IMMIGRATION AND CLAIMS

    Mr. Chairman and Members of the Committee:
    We are submitting this joint testimony as envisaged by the 
letters of Deputy Secretary Eizenstat of April 12 to Committee 
Chairman Hyde and Subcommittee Chairman Smith in response to 
letters to Secretary Summers and Secretary Albright from 
Chairman Hyde, inviting them or their designees to testify 
before this subcommittee on April 13 concerning H.R. 3485, the 
``Justice for Victims of Terrorism Act.'' Deputy Secretary 
Eizenstat has worked extensively on this issue for the 
Administration over the past 18 months, and we, on behalf of 
our Departments, join him in presenting our views on this 
proposed legislation. We share your goal that U.S. victims of 
terrorism and their families receive justice and compensation 
for their suffering. We are actively engaged with the Congress 
in ongoing discussions to resolve the complex issues identified 
and to address the needs of victims of terrorism. We also 
appreciate the opportunity to submit this statement into the 
record.
    Let us begin by expressing the Administration's and our own 
genuine and personal sympathy to victims of international 
terrorism--an evil that this administration has led the world 
in combating. It is the responsibility of the United States 
Government to do everything possible to protect American lives 
from international terrorism and other heinous acts. People 
like Mr. Flatow, Mr. Anderson, Mr. Cicippio, Mr. Jacobsen, and 
Mr. Reed and their families, and the families of the Brothers 
to the Rescue pilots, deserve support in their goal of finding 
fair and just compensation for their grievous losses and 
unimaginable experiences. Those of us who have met with them 
have been touched by their suffering and impressed with their 
strength and determination to seek justice. We understand their 
frustrations and the frustrations that have led the sponsors of 
this legislation to introduce it. We are dedicated to working 
with the Congress to achieve the goal of obtaining compensation 
for the victims and their families. But we feel strongly that 
this must be done in a way that is consistent with the broad 
national interests and international obligations of the United 
States.
    It is obvious that the states involved here--states that we 
have publicly branded as sponsors of terrorism--do not view the 
United States as a friendly environment in which to conduct 
financial transactions. As part of our efforts to combat 
terrorism, we impose a wide range of economic sanctions against 
state sponsors of terrorism in order to deprive them of the 
resources to fund acts of terrorism and to affect their 
conduct. Because of these measures, terrorism-list states 
engage in minimal economic activity in the United States. In 
many cases, the only assets that states which sponsor terrorism 
have in the United States are either blocked or diplomatic 
property. Such property should not be available for attachment 
and execution of judgments, for very good reasons involving the 
interests of the entire nation, which are described in detail 
below. As much as we join the sponsors of this bill in desiring 
to have victims of international terrorism and the heinous acts 
of the Cuban Air Force compensated, it would be unwise to 
ignore these reasons and prejudice the interests of all our 
citizens for this purpose.
    This question is complex and fraught with difficulties. For 
this reason, last year, we proposed, among other things, that a 
commission be established to review all aspects of the problems 
presented by acts of international terrorism. Such a commission 
would have specifically studied the issue of compensation with 
the goal of recommending proposals to the President and to the 
Congress to help the victims and their families receive 
compensation in a manner that would not impinge upon important 
U.S. national interests. While this proposal was not taken up, 
we believe this approach still has merit.
    H.R. 3485, though born of good intentions, is fundamentally 
flawed. The legislation would have five principal negative 
effects, all of which would be seriously damaging to important 
U.S. interests, and would, at the end of the day, result in 
substantial U.S. taxpayer liability.
    First, blocking of assets of terrorist states is one of the 
most significant economic sanctions tools available to the 
President. The proposed legislation would undermine the 
President's ability to combat international terrorism and other 
threats to national security by permitting the wholesale 
attachment of blocked property, thereby depleting the pool of 
blocked assets and depriving the U.S. of a source of leverage 
in ongoing and future sanctions programs, such as was used to 
gain the release of our citizens held hostage in Iran in 1981 
or in gaining information about POW's and MIA's as part of the 
normalization process with Vietnam.
    Second, it would cause the U.S. to violate its 
international treaty obligations to protect and respect the 
immunity of diplomatic and consular property of other nations, 
and would put our own diplomatic and consular property around 
the world at risk of copycat attachment, with all that such 
implies for the ability of the United States to conduct 
diplomatic and consular relations and protect personnel and 
facilities.
    Third, it would create a race to the courthouse benefiting 
one small, though deserving, group of Americans over a far 
larger group of deserving Americans. For example, in the case 
of Cuba, many Americans have waited decades to be compensated 
for both the loss of property and the loss of the lives of 
their loved ones. This would leave no assets for their claims 
and others that may follow. Even with regard to current 
judgment holders, it would result in their competing for the 
same limited pool of assets, which would be exhausted very 
quickly and might not be sufficient to satisfy all judgments.
    Fourth, it would breach the long-standing principle that 
the United States Government has sovereign immunity from 
attachment, thereby preventing the U.S. Government from making 
good on its debts and international obligations and potentially 
causing the U.S. taxpayer to incur substantial financial 
liability, rather than achieving the stated goal of forcing 
Iran to bear the burden of paying these judgments. The 
Congressional Budget Office (``CBO'') has recognized this by 
scoring the legislation at $420 million, the bulk of which is 
associated with the Foreign Military Sales (``FMS'') Trust 
Fund. Such a waiver of sovereign immunity would expose the 
Trust Fund to writs of attachment, which would inject an 
unprecedented and major element of uncertainty and 
unreliability into the FMS program by creating an exception to 
the processes and principles under which the program operates.
    Fifth, it would direct courts to ignore the separate legal 
status of states and their agencies and instrumentalities, 
overturning Supreme Court precedent and basic principles of 
corporate law and international practice by making state 
majority-owned corporations liable for the debts of the state 
and establishing a dangerous precedent for government owned 
enterprises like the U.S. Overseas Private Investment 
Corporation (``OPIC'').
    As the Washington Post observed in a fall 1999 editorial, 
``Victims of terrorism certainly should be compensated, but a 
mechanism that permits individual recovery to take precedence 
over significant foreign policy interests is flawed.'' The 
proposed legislation would indeed seriously compromise 
important national security, foreign policy, and other clear 
national interests, and discriminate among and between past and 
future U.S. claimants.
    For all these reasons, explained in more detail below, the 
Administration strongly opposes the proposed legislation.

(1) Attachment of Blocked and Diplomatic Property and the Elimination 
        of the Effectiveness of Our Blocking Programs

    The Administration has grave concerns with the provisions 
of the proposed legislation that seek to nullify the 
President's waiver of the 1998 FSIA amendments and thereby 
permit attachment of blocked and diplomatic property.
    The ability to block assets represents one of the primary 
tools available to the United States to deter aggression and 
discourage or end hostile actions against U.S. citizens abroad. 
Our efforts to combat threats to our national security posed by 
terrorism-list countries such as Iraq, Libya, Cuba, and Sudan 
rely in significant part upon our ability to block the assets 
of those countries.
    Blocking assets permits the United States to deprive those 
countries of resources that they could use to harm our 
interests, and to disrupt their ability to carry out 
international financial transactions. By placing the assets of 
such countries in the sole control of the President, blocking 
programs permit the President at any time to withhold 
substantial benefits from countries whose conduct we abhor, and 
to offer a potential incentive to such countries to reform 
their conduct. Our blocking programs thus provide the United 
States with a unique and flexible form of leverage over 
countries that engage in threatening conduct.
    The Congress has recognized the need for the President to 
be able to regulate the assets of foreign states to meet 
threats to the U.S. national security, foreign policy, and 
economy. In both the International Emergency Economic Powers 
Act and the Trading with the Enemy Act, the Congress has 
provided the President with statutory authority for regulating 
foreign assets. On the basis of this authority and foreign 
policy powers under the Constitution, Presidents have blocked 
property and interests in property of foreign states and 
foreign nationals that today amount to over $3.5 billion.
    The Supreme Court has also recognized the importance of the 
President's blocking authority, stating that such blocking 
orders ``permit the President to maintain the foreign assets at 
his disposal for use in negotiating the resolution of a 
declared national emergency. The frozen assets serve as a 
`bargaining chip' to be used by the President when dealing with 
a hostile country.'' Dames & Moore v. Regan, 453 U.S. 654, 673 
(1981).
    The leverage provided by blocked assets has proved central 
to our ability to protect important U.S. national security and 
foreign policy interests. The most striking example is the Iran 
Hostage Crisis. The critical bargaining chip the United States 
had to bring to the table in an effort to resolve the crisis 
was the almost $10 billion in Iranian Government assets that 
the President had blocked shortly after the taking of our 
embassy. Because the return of the blocked assets was one of 
Iran's principal conditions for the release of the hostages, we 
would not have been able to secure the safe release of the 
hostages and to settle thousands of claims of U.S. nationals if 
those blocked assets had not been available. This settlement 
with Iran also resulted in the eventual payment of $7.5 billion 
in claims to or for the benefit of U.S. nationals against Iran.
    In the case of Vietnam, the leverage provided by 
approximately $350 million in blocked assets, combined with 
Vietnam's inability to gain access to U.S. technology and 
trade, played an important role in persuading Vietnam's 
leadership to address important U.S. concerns in the 
normalization process. These concerns included assistance in 
accounting for POWs and MIAs from the Vietnam War, accepting 
responsibility for over $200 million in U.S. claims which had 
been adjudicated by the Foreign Claims Settlement Commission, 
and moderating Vietnamese actions in Cambodia.
    In addition, blocked assets have helped us to secure 
equitable settlements of claims of U.S. nationals against such 
countries as Romania, Bulgaria, and Cambodia in the context of 
normalization of relations. These results could not have been 
achieved without effective blocking programs.
    However, our blocking programs simply cannot function, and 
cannot serve to protect these important interests, if blocked 
assets are subject to attachment and execution by private 
parties, as the proposed legislation would permit. The need to 
deal with the increasing demands for information on assets, 
blocked and unblocked, of these terrorism-list governments as 
monetary judgments are awarded would seriously disrupt the 
operations of the Treasury Department in administering the 
blocking programs. These demands would greatly impair 
Treasury's investigative functions through the release of 
deliberative process and enforcement-related materials thereby 
divulging sensitive operational details and raising important 
issues of confidentiality with U.S. banks and others who 
provide information on assets. Additionally, the ability to use 
blocked assets as leverage against foreign states that threaten 
U.S. interests is essentially eliminated if the President is 
unable to preserve and control the disposition of such assets. 
Private rights of execution against blocked assets would 
permanently rob the President of the leverage blocking provides 
by depleting the pool of blocked assets.
    In the Cuban and Iranian contexts, for example, the value 
of judgments (including both compensatory and punitive damages) 
won by the Brothers to the Rescue families exceeds the total 
known value of the blocked assets of Cuba in the United States, 
and the value of the judgment won by the Flatow family, or the 
former Beirut Hostages, exceeds the total known value of the 
blocked assets of the Government of Iran in the United States. 
Attachment of these blocked assets to satisfy private judgments 
in these and similar cases would leave no remaining assets of 
terrorism-list governments in the President's control, denying 
the President an important source of leverage and seriously 
weakening his hand in dealing with threats to our national 
security.
    In addition, the prospect of future attachments by private 
parties would place a perpetual cloud over the President's 
ongoing control of all blocked assets programs. This would 
further undermine the President's ability to use such assets as 
leverage in negotiations, even where attachments had not yet 
occurred.
    Put simply, permitting attachment of blocked assets would 
likely seriously undermine the use of our blocking programs as 
a key tool for combating threats against our national security 
and, in the Iranian context, would not even achieve the goal of 
full payment of the compensatory damages of all existing 
judgments against Iran.

(2) Our Obligation and Interest in Protecting Diplomatic Property

    The proposed legislation also could cause the United States 
to violate our obligations under international law to protect 
diplomatic and consular property, and would undermine the legal 
protections for such property on which we rely every day to 
protect the safety of our diplomatic and consular property and 
personnel abroad. Even though the current legislation arguably 
provides protection for a slightly broader range of diplomatic 
property than previous legislative proposals, it is still 
fundamentally flawed in its failure to permit the President to 
protect properties, including consular properties, some 
diplomatic bank accounts, diplomatic residences, and properties 
of foreign missions to international organizations, which 
international law obligates us to protect.
    The United States' legal obligation to prevent the 
attachment of diplomatic and consular property could not be 
clearer. Protection of diplomatic property is required by the 
Vienna Convention on Diplomatic Relations, to which the United 
States and all of the states against which suits presently may 
be brought under the 1996 amendments to the FSIA are parties. 
Under Article 45 of the Vienna Convention on Diplomatic 
Relations we are obligated to protect the premises of 
diplomatic missions, together with their real and personal 
property and archives, of countries with which we have severed 
diplomatic relations or are in armed conflict. This would 
include diplomatic residences owned by the foreign state.
    Likewise, under Article 27 of the Vienna Convention on 
Consular Relations, the same protection is required for 
consular premises, property, and archives. Attachment of any of 
the types of property covered by the Vienna Conventions on 
Diplomatic and Consular Relations could place the United States 
in violation of our obligations under international law.
    The proposed legislation would only permit the President to 
ensure the protection of a narrow portion of the property 
covered by the Vienna Conventions, and would thereby place the 
United States in violation of our legal obligations. In 
addition, the proposed legislation as drafted could cause us to 
breach our obligations to ensure the inviolability of missions 
to the United Nations, pursuant to the UN Headquarters 
Agreement and the General Convention on Privileges and 
Immunities.
    Our national interest in the protection of diplomatic 
property could not be clearer or more important. [Italic for 
emphasis] The United States owns over 3,000 buildings and other 
structures abroad that it uses as embassies, consulates, 
missions to international organizations, and residences for our 
diplomats. The total value of this property is between $12 and 
$15 billion.
    Because we have more diplomatic property and personnel 
abroad than any other country, we are more at risk than any 
other country if the protections for diplomatic and consular 
property are eroded. [Italic for emphasis] If we flout our 
obligations to protect the diplomatic and consular property of 
other countries, then we can expect other countries to target 
our diplomatic property when they disagree strongly with our 
policies or actions. Defending our national interests abroad at 
times makes the United States unpopular with some foreign 
governments. We should not give those states who wish the 
United States ill an easy means to strike at us by declaring 
diplomatic property fair game.
    In the specific case of Iran, attachment of Iran's 
diplomatic and consular properties could also result in 
substantial U.S. taxpayer liability. Iran's diplomatic and 
consular properties in the United States are the subject of a 
claim brought by Iran against the United States before the 
Iran-U.S. Claims Tribunal. The Iran-U.S. Claims Tribunal is an 
arbitration court located at The Hague in the Netherlands. It 
was established as part of the agreement between Iran and the 
United States that freed the U.S. hostages in Iran and resolved 
outstanding claims that were then pending between the United 
States and Iran. Pursuant to this agreement and awards of the 
Tribunal, Iran has paid $7.5 billion in compensation to or for 
the benefit of U.S. nationals. The Tribunal also has 
jurisdiction over certain claims between the two governments.
    Although we are contesting Iran's claim vigorously, the 
Tribunal could find that the United States should have 
transferred Iran's diplomatic and consular property to it in 
1981. If it does so and the properties are not available 
because they have been liquidated to pay private judgments, the 
U.S. taxpayer would have to bear the cost of compensating Iran 
for the value of the properties. Under the Algiers Accords, 
Tribunal awards against the governments are enforceable in the 
courts of any country, under the laws of that country.

(3) Equity Among Claimants

    We are also deeply concerned that the proposed legislation 
would frustrate equity among U.S. nationals with claims against 
terrorism-list states. It would create a winner-take-all race 
to the courthouse, arbitrarily permitting recovery for the 
first, or first few, claimants from limited available assets, 
leaving other similarly-situated claimants with no recovery at 
all. In fact, it would take away assets potentially available 
to them.
    However, the Alejandre, Flatow, and Anderson cases do not 
represent the only claims of U.S. nationals against Cuba and 
Iran. No other claimants would benefit at all from the proposed 
legislation; indeed this legislation would seriously prejudice 
their interests.
    In the case of Cuba, the U.S. Foreign Claims Settlement 
Commission (``FCSC'') has certified 5,911 claims of U.S. 
nationals against the Government of Cuba, totaling 
approximately $6 billion with interest, dating back to the 
early 1960s. Contrary to statements made at the April 13 
hearing, these include not just expropriation claims, but also 
the wrongful death claims of family members of two individuals 
whom the Cuban Government executed after summary trial for 
alleged crimes against the Cuban state. Other claims relate to 
the Castro Government's seizure of homes and businesses from 
U.S. nationals. These claimants have waited over 35 years 
without receiving compensation for their losses. This bill will 
not help them at all.
    The same situation applies with respect to Iran. In 
addition to the Flatow and Anderson plaintiffs, who have 
judgments for compensatory and punitive damages totaling $589 
million, former hostages who were held captive in Lebanon--
David Jacobsen, Joseph Cicippio, Frank Reed, and their 
families--collectively have won a judgment against Iran 
totaling $65 million. Additional suits against Iran are 
currently pending in the Federal District courts.
    Moreover, given the nature of these regimes, it remains 
possible that in spite of our substantial efforts to combat 
terrorism, foreign terrorist states will commit future acts in 
violation of the rights of U.S. nationals, which may give rise 
to claims against them. If such incidents occur, these 
claimants will also have an interest in being compensated.
    Against this background, in which outstanding judgments for 
compensatory and substantial punitive damages far exceed 
available funds, the proposed legislation would permit the 
first claimants to reach the courthouse to deplete all the 
available assets of terrorism-list governments, leaving nothing 
for other similarly situated claimants to satisfy even 
compensatory damages they are awarded. Satisfaction of the 
judgments in the Alejandre, Flatow, and Anderson cases would 
come at the expense of all other claimants against Cuba and 
Iran, both past and future.
    In sum, permitting the attachment of blocked and diplomatic 
properties in individual cases, as the proposed legislation 
would do, would undermine our ability to combat threats to our 
national security, violate our obligations under international 
law, place our diplomatic and consular properties and personnel 
abroad at risk, and lead to arbitrary inequities in the 
treatment of similarly-situated U.S. nationals with claims 
against foreign governments.

(4) Breaching the Sovereign Immunity of the United States

    We are equally concerned about the provision of the 
proposed legislation that would permit garnishment of debts of 
the United States. Not only would this provision breach the 
long-established principle that the United States Government 
has sovereign immunity from garnishment actions, it would 
seriously undermine our Foreign Military Sales program, which 
is an important tool supporting U.S. national security policy 
and strategy, by creating an exception to the processes and 
principles under which the program operates that has not 
existed in the program's 40-year history.
    By allowing plaintiffs to attempt to tap the FMS Trust Fund 
to satisfy their judgments, the entire FMS program would be 
jeopardized as foreign customers question whether funds they 
are required to pay under the FMS program might be at risk of 
diversion or attachment. H.R. 3485 would therefore inject a 
major element of uncertainty and unreliability into the FMS 
program.
    Additionally, foreign governments make pre-payments into 
the FMS Trust Fund to ensure payment of U.S. suppliers for 
products and services provided to foreign governments in USG-
approved sales of defense products and services. Under section 
37 of the Arms Export Control Act, these funds are available 
solely for payments to U.S. suppliers, and for refunds to 
foreign purchasers in connection with such sales. If the FMS 
Trust Fund can be exposed to attachment through an act of 
Congress for purposes other than ensuring payment for arms 
sales, not only may foreign governments simply question the 
wisdom of engaging in such transactions with the United States, 
but payments to U.S. suppliers would be threatened.
    The proposed legislation also will negatively affect our 
defense industrial base. If passed as currently written, not 
only will U.S. defense firms be uncertain about whether and 
when they will be paid, but our ability to maintain open 
production lines needed to support the U.S. military, which the 
FMS program greatly facilitates, also would be disrupted.
    We have heard that the intent of the proposed legislation 
is to ``make terrorist states pay.'' However, exposing the 
Iranian FMS Trust Fund account (``Iran FMS account'') to 
attachment will not cause Iran to pay. Here too, at the end of 
the day, the U.S. taxpayer will bear this burden if this fund 
is tapped. The United States will have to pay Iran whatever 
amount in the Iran FMS account is held by the Iran-U.S. Claims 
Tribunal to be owed to Iran. The current balance of the Iran 
FMS account, which is approximately $400 million, is the 
subject of Iran's multi-billion dollar claim against the United 
States before the Tribunal, arising out of the Iran FMS 
program. Depleting Iran's FMS account through attachment by the 
plaintiffs in no way discharges any obligation to Iran the U.S. 
Government may ultimately be determined to have by the 
Tribunal. And if Iran prevails on its claims, it can seek to 
enforce its award against U.S. property anywhere in the world, 
since the awards of the Iran-U.S. Claims Tribunal are 
enforceable in the courts of any country. Any Tribunal award 
that cannot be satisfied from the Iranian FMS account will have 
to be satisfied with U.S. government funds. Thus American 
taxpayers, rather than Iran, would actually pay under H.R. 
3485. CBO's cost estimate for the bill has been confirmed that 
the legislation would cost the Treasury, and hence the 
taxpayer, $420 million, most of which is associated with the 
FMS Trust Fund.
    This provision is also of particular concern because it 
would prevent the United States from meeting its obligations to 
make payments in satisfaction of awards the Tribunal renders 
against the United States. Instead, the proposed legislation 
would permit private parties to garnish the funds of the U.S. 
Government in order to collect such payments before they reach 
Iran. Even without this change in the law, there have been 
efforts in the Flatow case to garnish the payment of a $6 
million Tribunal award in Iran's favor.
    It is important to understand that allowing private 
litigants to garnish amounts we owe Iran under Tribunal awards 
would not discharge the U.S. Government's liability to Iran to 
pay such money. For example, if the efforts in the Flatow case 
had succeeded, the Flatow family would have received $6 
million, but the United States still would have owed Iran $6 
million under the unpaid award. And again because the awards of 
the Iran-U.S. Claims Tribunal are enforceable in the courts of 
any country, Iran can seek to enforce awards against U.S. 
property in other countries if we do not pay them voluntarily. 
[Italic for emphasis]
    Permitting garnishment of the payment of such awards could 
thus result in the U.S. taxpayer paying twice: once when a 
private claimant garnishes the payment, and a second time upon 
Iran's successful enforcement of the still unsatisfied award 
against us abroad. Because the judgments against Iran received 
by these plaintiffs total in the hundreds of millions of 
dollars, permitting garnishment of debts owed by the United 
States to Iran as a means of satisfying these judgments could 
cost the U.S. taxpayer hundreds of millions of dollars.
    Finally, while we are vigorously contesting all of Iran's 
claims at the Tribunal, if we are unable to pay even the 
smallest awards against us, our position before the Tribunal in 
all other claims will clearly be undermined.

(5) Eliminating Legal Separateness of Agencies and Instrumentalities

    There are also significant problems with the provision of 
the proposed legislation that would change the way the FSIA 
defines a foreign state's agencies and majority-owned or 
controlled instrumentalities for terrorism-list countries where 
there is a terrorism-related judgment against it. This 
provision would overturn the Congress's own considered judgment 
when it passed the FSIA in 1976, as well as existing Supreme 
Court case law and basic principles of corporate and 
international law. In addition, it would prejudice the 
interests of U.S. citizens and corporations who invest abroad.
    This provision would make corporations that are majority-
owned or controlled by a terrorism-list foreign government 
liable for terrorism-related judgments awarded against that 
government. The Congress recognized the danger of this position 
when it passed the FSIA in 1976. The Conference Report to that 
bill observed that ``[i]f U.S. law did not respect the separate 
juridical identities of different agencies or 
instrumentalities, it might encourage foreign jurisdictions to 
disregard the juridical divisions between different U.S. 
corporations or between a U.S. corporation and its independent 
subsidiary.''
    We are concerned that this proposal to disregard separate 
legal personality, although limited in the bill to terrorism-
list states and their majority owned entities, could create the 
perception that the United States is unreliable as a location 
for banking or investment. Especially for companies with 
linkages to foreign governments, such a provision could be 
viewed as an expansion of U.S. economic sanctions. It could 
raise concerns about the United States as a safe financial 
center and about the likelihood of possible legal actions 
against their assets in the United States. This perception 
could undermine the competitive ability of U.S. financial firms 
to lead privatizations abroad and to attract banking business 
and investments to the United States.
    In addition, if the United States were to ``pierce the 
corporate veil'' in this manner, there could well be similar 
actions in foreign countries. Foreign countries may enact 
similar changes to their law or foreign courts might disregard 
the separate status of private, U.S. owned companies in cases 
where a litigant had a judgment against the U.S. Government.
    Compared to the billions of dollars the United States 
Government and private U.S. interests have invested abroad, the 
blocked assets of terrorism-list state entities, agencies, and 
instrumentalities located in the United States are small. In 
the case of Iran, we do not have a comprehensive picture of 
Iranian assets in the United States that might be affected by 
this proposed legislation. There is currently no blocking of 
Iranian assets in the United States (other than the residual of 
property blocked during the Hostage Crisis), and thus no 
obligation on the part of U.S. persons to report specific 
information on them.
    U.S. citizens, corporations, the United States Government, 
and taxpayers have far more money invested abroad than those of 
any other country, and thus have more to lose if investment 
protections such as those provided by the presumption of 
separate status is eroded. [Italic for emphasis] If we saddle 
the investors of other countries with the debts of foreign 
governments with which they are co-investors, as the proposed 
legislation would do, then we can expect U.S. investors and 
taxpayers to pay a considerably higher price when other 
governments follow our example.
    Finally, disregarding separate legal personality as 
provided for in this proposal could possibly lead to 
substantial U.S. taxpayer liability for takings claims in U.S. 
courts and possibly before international fora.
    We are grateful for this opportunity to address a very 
important subject involving the fight against terrorism, 
compensation for victims, and critical national interests. 
Unfortunately, however, the concerns raised here indicate that 
the 1996 amendment waiving sovereign immunity and creating a 
judicial cause of action for damages arising from acts of 
terrorism has not met its goals of providing compensation to 
victims and deterring terrorism. In fact, if blocked assets 
were exhausted to compensate the families, which would be the 
result of this bill, the leverage to affect the conduct of the 
terrorism-list states would be lost along with the blocked 
assets. We are not happy that these suits have not led to 
recovery for families who have brought cases under the 1996 
amendment. A system that has to date left no recovery option 
other than one that conflicts with U.S. national interests and 
would result in substantial U.S. taxpayer liability is not an 
acceptable system.
    We have been giving this a very hard look and have been 
working with several members of Congress to address this 
difficult problem. We are anxious to continue doing so. 
Together, we hope to formulate immediate and longer-term 
approaches that will address the concerns--of compensation for 
terrorist acts and the U.S. national interests and 
international obligations--that we all share in a much more 
satisfactory way. Most importantly, we believe that, for a 
workable and effective solution, we need a careful and 
deliberative review of the issues, informed by our experience 
since the 1996 amendment.
    As mentioned earlier, we suggested last year that the 
Administration and Congress commit to a joint commission to 
review all aspects of the problem, and to recommend to the 
President and the Congress proposals to find ways to help these 
families receive compensation, in a way consistent with our 
overall national interests and international obligations. We 
believe that this is the best way to deal with these issues and 
that it therefore merits further consideration. We believe that 
such a commission should be one of stature and with the right 
expertise to confront all the hard issues we have discussed 
today--including the lack of effective remedies in these cases 
because of sanctions against terrorism-list countries under 
U.S. law, which are absolutely necessary to maintain.
    A fundamental principle for this joint commission--by 
definition--would be the need to inventory outstanding claims 
and develop an effective and fair mechanism for compensation of 
victims of terrorism. The commission should be encouraged to 
think broadly, including consideration of avenues other than 
the judicial one created by the 1996 amendment.
    We hope discussions on the Commission and the broader issue 
of compensation for victims of terrorism will yield a solution 
that best addresses all parties' respective interests. Again, 
we are committed to working together with you, members of this 
Subcommittee, and others to find non-legislative and 
legislative means to achieve our shared goal of fair and just 
compensation for victims of terrorism.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

TITLE 28, UNITED STATES CODE

           *       *       *       *       *       *       *



PART IV--JURISDICTION AND VENUE

           *       *       *       *       *       *       *


CHAPTER 87--DISTRICT COURTS; VENUE

           *       *       *       *       *       *       *



Sec. 1391. Venue generally

  (a)  * * *

           *       *       *       *       *       *       *

  (f) A civil action against a foreign state as defined in 
section 1603(a) of this title may be brought--
          (1)  * * *

           *       *       *       *       *       *       *

          (3) in any judicial district in which the agency or 
        instrumentality is licensed to do business or is doing 
        business, if the action is brought against an agency or 
        instrumentality of a foreign state as defined in 
        section 1603(b)(1) of this title; or

           *       *       *       *       *       *       *


CHAPTER 97--JURISDICTIONAL IMMUNITIES OF FOREIGN STATES

           *       *       *       *       *       *       *



Sec. 1603. Definitions

  For purposes of this chapter--
  (a) * * *
  [(b) An ``agency or instrumentality of a foreign state'' 
means any entity--] (b) An ``agency or instrumentality of a 
foreign state'' means--
          (1) any entity--
                  [(1)] (A) which is a separate legal person, 
                corporate or otherwise, and
                  [(2)] (B) which is an organ of a foreign 
                state or political subdivision thereof, or a 
                majority of whose shares or other ownership 
                interest is owned by a foreign state or 
                political subdivision thereof, and
                  [(3)] (C) which is neither a citizen of a 
                State of the United States as defined in 
                section 1332(c) and (d) of this title, nor 
                created under the laws of any third country[.]; 
                and
          (2) for purposes of sections 1605(a)(7) and 1610 
        (a)(7) and (f), any entity as defined under 
        subparagraphs (A) and (B) of paragraph (1), and 
        subparagraph (C) of paragraph (1) shall not apply.

           *       *       *       *       *       *       *


Sec. 1605. General exceptions to the jurisdictional immunity of a 
                    foreign state

  (a) * * *

           *       *       *       *       *       *       *

  (h) If a foreign state, or its agency or instrumentality, is 
a party to an action pursuant to subsection (a)(7) and fails to 
furnish any testimony, document, or other thing upon a duly 
issued discovery order by the court in the action, such failure 
shall be deemed an admission of any fact with respect to which 
the discovery order relates. Nothing in this subsection shall 
supersede the limitations set forth in subsection (g).

Sec. 1606. Extent of liability

  As to any claim for relief with respect to which a foreign 
state is not entitled to immunity under section 1605 or 1607 of 
this chapter, the foreign state shall be liable in the same 
manner and to the same extent as a private individual under 
like circumstances; but a foreign state except for an agency or 
instrumentality thereof shall not be liable for punitive 
damages, except any action under section 1605(a)(7) or 1610(f); 
if, however, in any case wherein death was caused, the law of 
the place where the action or omission occurred provides, or 
has been construed to provide, for damages only punitive in 
nature, the foreign state shall be liable for actual or 
compensatory damages measured by the pecuniary injuries 
resulting from such death which were incurred by the persons 
for whose benefit the action was brought. No Federal or State 
statutory limits shall apply to the amount of compensatory, 
actual, or punitive damages permitted to be awarded to persons 
under section 1605(a)(7) and this section.

           *       *       *       *       *       *       *


Sec. 1610. Exceptions to the immunity from attachment or execution

  (a) * * *

           *       *       *       *       *       *       *

  (f)(1)(A) Notwithstanding any other provision of law, 
including but not limited to section 208(f) of the Foreign 
Missions Act (22 U.S.C. 4308(f)), and except as provided in 
subparagraph (B), any property with respect to which financial 
transactions are prohibited or regulated pursuant to section 
5(b) of the Trading with the Enemy Act (50 U.S.C. App. 5(b)), 
section 620(a) of the Foreign Assistance Act of 1961 (22 U.S.C. 
2370(a)), sections 202 and 203 of the International Emergency 
Economic Powers Act (50 U.S.C. 1701-1702), or any other 
proclamation, order, regulation, or license issued pursuant 
thereto, shall be subject to execution or attachment in aid of 
execution of any judgment relating to a claim for which a 
foreign state [(including any agency or instrumentality or such 
state)] (including any agency or instrumentality of such state) 
claiming such property is not immune under section 1605(a)(7).

           *       *       *       *       *       *       *

  (C) Notwithstanding any other provision of law, moneys due 
from or payable by the United States (including any agency, 
subdivision or instrumentality thereof) to any state against 
which a judgment is pending under section 1605(a)(7) shall be 
subject to attachment and execution, in like manner and to the 
same extent as if the United States were a private person.

           *       *       *       *       *       *       *

  (3)(A) Subject to subparagraph (B), upon determining on an 
asset-by-asset basis that a waiver is necessary in the national 
security interest, the President may waive this subsection in 
connection with (and prior to the enforcement of) any judicial 
order directing attachment in aid of execution or execution 
against the premises of a foreign diplomatic mission to the 
United States, or any funds held by or in the name of such 
foreign diplomatic mission determined by the President to be 
necessary to satisfy actual operating expenses of such foreign 
diplomatic mission.
  (B) A waiver under this paragraph shall not apply to--
          (i) if the premises of a foreign diplomatic mission 
        has been used for any nondiplomatic purpose (including 
        use as rental property), the proceeds of such use; or
          (ii) if any asset of a foreign diplomatic mission is 
        sold or otherwise transferred for value to a third 
        party, the proceeds of such sale or transfer.
  (4) For purposes of this subsection, all assets of any agency 
or instrumentality of a foreign state shall be treated as 
assets of that foreign state.

           *       *       *       *       *       *       *

                              ----------                              


    SECTION 117 OF THE TREASURY DEPARTMENT APPROPRIATIONS ACT, 1999

           exception to immunity from attachment or execution

  Sec. 117. (a) * * *

           *       *       *       *       *       *       *

  [(d) Waiver.--The President may waive the requirements of 
this section in the interest of national security.]

           *       *       *       *       *       *       *

                            Additional Views

    I take this opportunity to express my perspective on the 
committee's consideration of the Justice for Victims of 
Terrorism Act, H.R. 3485 and to describe several amendments I 
made to the bill. I continue to support Congress's efforts to 
ensure that victims of terrorism and their families are 
compensated by the foreign states that have committed such 
atrocious crimes. Monetary damages can never truly compensate 
the victims and their families. What Congress can do is ensure 
that judicial judgements against these terrorist nations are 
enforced so that monetary awards actually hurt these terrorist 
states rather than being merely a slap on the wrist.
    In considering H.R. 3485, I raised two concerns with 
provisions under current law that potentially restrict victims 
ability to obtain compensation for terrorist attacks against 
them or their family members. Both of these concerns were 
incorporated in an amendment I offered that was accepted by the 
Majority. In particular, I was concerned that road blocks put 
up by foreign states in the course of discovery can severely 
burden the litigation process to the victims' detriment. 
Moreover, it is important to ensure that the continuing efforts 
of Congress and numerous States to implement Federal and State 
statutory caps on damage awards do not apply to U.S. victims of 
terrorist attacks. A description of the history of the current 
law waiving sovereign immunity for certain foreign states that 
commit terrorist acts and H.R. 3485, as well as the amendment, 
are detailed herein.

                         HISTORY OF CURRENT LAW

    Until the beginning of the 1900s, the United States 
afforded foreign states absolute immunity from suit in U.S. 
courts as a matter of common law. With the rise of Communism 
and the growth of state owned trading and shipping companies, 
the United States began to recognize the restrictive theory of 
foreign sovereign immunity, which permitted suits arising from 
a foreign states' commercial activities. In 1952, the ``Tate 
Letter'' announced that the United States would follow the 
restrictive theory in making foreign sovereign immunity 
determinations.\1\ In 1976, in order to promote uniform and 
apolitical determinations, Congress transferred immunity 
determinations from the State Department to the judiciary and 
codified the restrictive theory in the Foreign Sovereign 
Immunities Act (``FSIA'').\2\
---------------------------------------------------------------------------
    \1\ Letter from Jack B. Tate, Acting Legal Advisor, to the Attorney 
General (May 19, 1952).
    \2\ 28 U.S.C.A. Sec. Sec. 1602-1611. See Flatow v. Islamic Republic 
of Iran, 999 F. Supp. 1 (D.C.D.C. 1998).
---------------------------------------------------------------------------
    Since enactment of the FSIA, U.S. courts consistently have 
refused to extend the scope of the FSIA, and thus, did not find 
within the FSIA the right to sue foreign states, beyond 
commercial activities, to reach public acts committed by such 
foreign states outside the United States. As a result, foreign 
states used the FSIA as a shield against civil liability for 
violations of the laws of nations committed against U.S. 
nationals overseas.\3\
---------------------------------------------------------------------------
    \3\ See Saudi Arabia v. Nelson, 507 U.S. 349 (1993).
---------------------------------------------------------------------------
    The Antiterrorism and Effective Death Penalty Act of 1996 
(``AEDPA'') was enacted in response to a number of terrorist 
attacks against U.S. citizens abroad.\4\ AEDPA amended the FSIA 
to lift the immunity of foreign states for a certain category 
of sovereign acts which are repugnant to the United States and 
the international community--namely acts of terrorism.\5\ AEDPA 
created an exception to sovereign immunity in the case of 
foreign states officially designated by the State Department as 
terrorist states when the foreign state commits a terrorist 
act, or provides material support and resources to an 
individual or entity which commits such an act, resulting in 
the death or personal injury of a U.S. citizen.
---------------------------------------------------------------------------
    \4\ There are several notable cases involving U.S. citizens in the 
1980s and 1990s, which spurred Congress' efforts to expand the FSIA to 
eliminate sovereign immunity for foreign states engaged in state-
sponsored terrorism. First, in March 1985, Terry Anderson, an American 
journalist working in Beirut, was kidnaped by agents of the Islamic 
Republic of Iran (``Iran''). He was held captive by his kidnappers in 
deplorable conditions until early December 1991. Second, during the 
1980s, three other individuals working in Lebanon, David Jacobsen, an 
administrator of the American University hospital in Beirut, Joseph 
Ciccipio, a comptroller of the American University school and hospital, 
and Frank Reed, the principal of a private secondary school in Beirut, 
were also held captive by agents of Iran. Third, in April 1995, Alisa 
Flatow, a 20 year old college student from New Jersey, was on a bus on 
the Gaza strip going to a Passover holiday celebration. A terrorist 
from the Iranian-backed Islamic Jihad rammed his car loaded with 
explosives into the bus, killing Ms. Flatow and seven others. Finally, 
in February 1996, Cuban MiG aircraft shot down two aircraft flown by 
the ``Brothers to the Rescue'' organization in international airspace 
over the Florida Straits. Three American citizens were killed in the 
attack.
    \5\ Pub. L. 104-132, Title II, Sec. 221(a) (Apr. 24, 1996), 110 
Stat. 1241 codified in 28 U.S.C.A. Sec. 1605 (West 2000 Supp.).
---------------------------------------------------------------------------
    In the 1997 Omnibus Consolidated Appropriations Act, the 
``Flatow Amendment'' revised the FSIA to expressly provide that 
punitive damages were available in actions brought under the 
state sponsored terrorism exception to immunity.\6\ This was 
done to ensure that the state sponsored terrorism exception had 
a deterrent effect--the potential for substantial civil 
liability. To further make the immunity exception have a real 
impact on state sponsored terrorism, in 1998 Congress amended 
the FSIA to allow plaintiffs holding judgements for acts of 
terrorism against those states on the terrorism list to bring 
enforcement actions against any blocked assets of those states. 
The legislation included a waiver provision which, according to 
the legislative history, was to be exercised by the President 
on a limited basis and only when in the national security 
interest of the United States.\7\ President Clinton in 1998 
issued a Presidential Proclamation, which was a finding that it 
is in the national security interest of the United States to 
waive the eligibility of plaintiffs to attach ``blocked'' 
assets in the United States in connection with all judgements 
against all terrorist states.\8\
---------------------------------------------------------------------------
    \6\ Pub. L. 104-208, Div. A., Title I, Sec. 101(c) [Title V 
Sec. 589] (Sept. 30, 1996), 110 Stat. 3009-172 codified in 28 U.S.C.A. 
Sec. 1605 note (West 2000 Supp.).
    \7\ Treasury Department Appropriations Act of 1999, Pub. L. 105-
277, Title I, Sec. 117(d) codified in 28 U.S.C.A. Sec. 1610 note (West 
2000 Supp.).
    \8\ Determination to Waive Requests Relating to Blocked Property of 
Terrorist-List States, Presidential Determination No. 99-1, 63 Fed. 
Reg. 59201 (Oct. 21, 1998) codified in 28 U.S.C.A. Sec. 1610 note (West 
2000 Supp.).
---------------------------------------------------------------------------
    There are several cases pending in U.S. courts by the 
families of victims of terrorism.\9\ The plaintiffs in these 
actions have been unable to collect on the judgements they 
received due to impediments in attaching the assets of foreign 
states. It is argued that the President's national security 
waiver prevents plaintiffs from attaching certain assets 
blocked, and thus held by the United States, to prevent such 
assets from being returned to the foreign state. Further, there 
are certain ``unblocked'' assets which are essentially 
immunized from attachment because they are independent 
juridical entities (e.g., an Iranian bank that does not have a 
direct nexus to the terrorist act). As described below, H.R. 
3485 amends the FSIA to remove the asserted impediments to 
plaintiffs attaching the assets of foreign states located in 
the United States.
---------------------------------------------------------------------------
    \9\ To date, judgements currently have been awarded to families of 
victims in the following cases: (1) in March 1998, Alisa Flatow's 
family was awarded $22.5 million in compensatory damages and $225 
million in punitive damages; (2) the three Brothers to the Rescue 
victims' families were awarded in separate, but related judgements, $48 
million in compensatory damages and $132 million in punitive damages, 
plus nearly $20 million in post-judgement interest and costs; (3) in 
March 2000, Terry Anderson and his family were awarded $41.2 million in 
compensatory damages and $300 million in punitive damages; and (4) 
David Jacobsen, Joseph Ciccipio and Frank Reed were awarded a total of 
approximately $20 million compensatory damages.
---------------------------------------------------------------------------

     SUMMARY OF THE JUSTICE FOR VICTIMS OF TERRORISM ACT, H.R. 3485

    H.R. 3485 amends the applicability of the FSIA's definition 
of an ``agency or instrumentality of a foreign state'' to make 
clear that the U.S. located assets of corporations majority-
owned by terrorism sponsoring governments would be liable for 
execution of judgement issued by U.S. courts against that 
government.
    H.R. 3485 directs that moneys due from, or payable by the 
United States to any foreign state against which a judgment is 
pending will be subject to attachment and execution in a like 
manner and to the same extent as if the United States were a 
private person. This provision waives the U.S. Government's 
immunity from suit on funds held or collected by the U.S. 
Government in connection with the activities of a foreign state 
(e.g., the U.S. Government holds the revenue of certain Iranian 
properties sold in the United States and are due to be paid to 
Iran. Such revenue cannot be attached because the United States 
is immunized from suit).
    H.R. 3485 authorizes the President, upon determining on an 
asset-by-asset basis that a waiver is necessary and in the 
national security interest, to prevent plaintiffs from 
attaching the premises of any property subject to the Vienna 
Convention on Diplomatic Relations or the Vienna Convention on 
Consular Relations. The presidential waiver would not apply to 
the proceeds of: (1) any property subject to the Vienna 
Convention on Diplomatic Relations or the Vienna Convention on 
Consular Relations that has been used for any non-diplomatic 
purpose (including use as rental property); or (2) a sale or 
transfer of an asset subject to the Vienna Convention on 
Diplomatic Relations or the Vienna Convention on Consular 
Relations. This provision prevents the President from issuing a 
blanket waiver and prevents the applicability of such a waiver 
to proceeds from non-diplomatic activities.
    H.R. 3485 treats all assets of any agency or 
instrumentality of a foreign state as assets of that foreign 
state. This change in the law eliminates the ``Bancec'' rule 
which limits the attachment of a foreign states' assets in the 
United States (e.g., a bank) only to those assets that are 
connected in a significant fashion with the terrorist act. This 
provision also would allow the attachment of the assets of 
certain private non-profit organizations in the United States 
that are allied with a foreign state and that are known to be 
involved in terrorist activities.
    Thus, H.R. 3485 eliminates many of the remaining barriers 
to victims and their families seeking to attach the assets of, 
and executing the judicial judgements against, foreign 
terrorist states.\10\
---------------------------------------------------------------------------
    \10\ According to Treasury Deputy Secretary Stuart E. Eizenstat, 
the Administration has several concerns with H.R. 3485: First, the 
ability to block assets represents one of the primary tools available 
to the United States to deter aggressions and discourage or end hostile 
actions against U.S. citizens abroad. The bill therefore would 
interfere with the President's power to block foreign assets by 
subjecting the assets to attachment and execution by private parties. 
Second, H.R. 3485 may result in the United States violating its 
obligations under the Vienna Convention on Diplomatic Relations and the 
Vienna Convention on Consular Relations to prevent the attachment of 
diplomatic and consular property. Without protecting the diplomatic and 
consular property of these terrorist-list countries, the Administration 
argues that we should expect such countries, and possibly others, to 
target our diplomatic property when they disagree strongly with our 
polices or actions. Third, the first claimants who reach the courthouse 
may be able to deplete the available assets of terrorism-list 
governments, leaving nothing for other similarly situated claimants. 
Fourth, the Administration argues that permitting the garnishment of 
debts of the United States would breach the principle that the United 
States government has sovereign immunity from garnishment actions. 
Finally, the bill would make corporations that are majority-owned or 
controlled by a terrorism-list foreign government liable for all of the 
individual debts of that government. According to the Administration, 
such an action would saddle the investors of other countries with the 
debts of foreign governments with which they are co-investors and we 
should expect U.S. investors to face the same consequences abroad. 
Letter from Stuart E. Eizenstat, Deputy Secretary of the U.S. Treasury 
Department, to the U.S. Senate Committee on the Judiciary (Oct. 27, 
1999).
---------------------------------------------------------------------------

                     CONYERS AMENDMENT TO H.R. 3485

    In order to further assist current and future victims of 
terrorism who file suits under the FSIA, I offered an amendment 
approved by voice vote that reduces litigation difficulties 
presented by unresponsive foreign states during the discovery 
stages of litigation as well as precludes any cap on damages 
awarded to victims and their families.
    In cases involving foreign terrorist states, obtaining 
discovery from such litigants can be difficult, if not 
impossible. American citizens are subject to a very burdensome 
discovery process under the FSIA and Hague Evidence Convention, 
which requires the involvement of foreign courts and diplomatic 
offices and are subject to foreign ``blocking statutes'' 
designed to thwart our discovery process. Moreover, foreign 
states have substantial incentives not to respond to discovery 
requests seeking information about their involvement in 
terrorist activities. My amendment therefore requires that when 
a foreign state fails to respond to a discovery order, the 
foreign state will be deemed to have admitted the facts to 
which the discovery order pertains.
    The amendment also precludes the application of Federal and 
Statute caps on compensatory, actual and punitive damages 
awarded to victims of terrorism under the FSIA. Many States and 
Congress are continually revising the law to cap or preclude 
damage awards to plaintiffs, regardless of the egregiousness of 
the offense. It is nearly impossible to keep track of all the 
cases where this Congress and States have enacted caps on 
damages, and it is now to the point where we cannot be sure 
that caps on damage awards do not currently, or will not some 
day in the future, apply to these types of cases. Therefore, my 
amendment ensures that caps on damage awards in these cases are 
not applicable.
    The aforementioned changes are fully consistent with 
Congressional intent regarding the FSIA. I am pleased that this 
modest and common sense amendment to further help victims of 
terrorism was adopted on a bipartisan basis.
                                                  John Conyers, Jr.