[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 3442 Introduced in Senate (IS)]

<DOC>






114th CONGRESS
  2d Session
                                S. 3442

 To amend the Terrorism Risk Insurance Act of 2002 to provide for the 
       release of certain blocked assets, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 28, 2016

Mr. Blumenthal introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
 To amend the Terrorism Risk Insurance Act of 2002 to provide for the 
       release of certain blocked assets, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Terrorism Victims Protection Act''.

SEC. 2. EXECUTION OF PAYMENT.

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

SEC. 3. EXCEPTIONS TO THE IMMUNITY FROM ATTACHMENT OR EXECUTION.

    Section 1610 of title 28, United States Code, is amended by 
striking subsection (g) and inserting the following:
    ``(g) Property in Certain Actions.--
            ``(1) Definitions.--In this subsection--
                    ``(A) the term `financial agency' has the meaning 
                given the term in section 5312(a) of title 31;
                    ``(B) the term `financial asset'--
                            ``(i) has the meaning given the term in 
                        Article 8-102 of the Uniform Commercial Code; 
                        and
                            ``(ii) includes cash;
                    ``(C) the term `financial institution' has the 
                meaning given the term in section 5312(a) of title 31;
                    ``(D) the term `intermediary bank' has the meaning 
                given the term in Article 4A-104 of the Uniform 
                Commercial Code; and
                    ``(E) the term `property of a foreign state against 
                which a judgment is entered under section 1605A, and 
                the property of an agency or instrumentality of such a 
                state' includes--
                            ``(i) a financial asset beneficially owned 
                        by a terrorist party or its agency or 
                        instrumentality;
                            ``(ii) any interest, sale, and redemption 
                        payment related to a financial asset described 
                        in clause (i) that is received in an account 
                        maintained in the United States at a financial 
                        agency or financial institution regardless of 
                        where the terrorist party or its agency or 
                        instrumentality maintains an account in its 
                        name to which the financial asset has been 
                        credited; and
                            ``(iii) a transfer of funds, including any 
                        mid-stream electronic funds transfer in 
                        possession of an intermediary bank if--
                                    ``(I) such terrorist party or its 
                                agency or instrumentality is the 
                                originator or the beneficiary of the 
                                fund transfer; or
                                    ``(II) the transfer was conducted 
                                for the direct or indirect benefit of 
                                such terrorist party or its agency or 
                                instrumentality, including the central 
                                bank or monetary authority of the 
                                terrorist party, regardless of whether 
                                the transfer was initiated by a non-
                                state-owned, non-U.S. financial 
                                institution located outside of the 
                                United States and only passes through 
                                the financial system of the United 
                                States to another non-state-owned, non-
                                U.S. financial institution located 
                                outside of the United States.
            ``(2) Transfers null and void.--
                    ``(A) In general.--Except as provided in 
                subparagraph (C), any attempted direct or indirect 
                transfer from an account located in the United States 
                to an account located outside of the United States 
                shall be null and void, and the asset that is the 
                subject of the transfer shall be treated as if the 
                asset remains in the United States, if the transfer--
                            ``(i) relates to any financial asset 
                        described in paragraph (1)(E);
                            ``(ii) is for the direct or indirect 
                        benefit of a foreign state or an agency or 
                        instrumentality of that foreign state, 
                        regardless of whether the transfer is completed 
                        by means of a book entry, wire transfer, or 
                        otherwise; and
                            ``(iii) violates any court order, 
                        retraining notice, judgment lien, or other 
                        process in aid of enforcement of, or that 
                        constitutes a fraudulent conveyance or transfer 
                        with respect to, a judgment under section 1605A 
                        against that foreign state or the agency or 
                        instrumentality of that foreign state.
                    ``(B) Jurisdiction.--A court that has personal 
                jurisdiction over the transferee of a transfer 
                described in subparagraph (A) may--
                            ``(i) order the transferee to return the 
                        financial asset to the United States; and
                            ``(ii) if the transferee fails to obey an 
                        order under clause (i)--
                                    ``(I) deem any asset that is an 
                                amount not greater than the value of 
                                the transferred asset to be an asset of 
                                a foreign state or an agency or 
                                instrumentality of the foreign state; 
                                and
                                    ``(II) issue an award against the 
                                transferee in an amount that is not 
                                greater than the value of the 
                                transferred asset.
                    ``(C) Exception.--Any transfer that otherwise would 
                be null and void under subparagraph (A) shall not be 
                deemed to be null and void if the person who held or 
                maintained the asset that was the subject of the 
                transfer establishes that the transfer did not 
                represent a willful violation of the provisions of any 
                court order, retraining notice, judgment lien, or other 
                process in aid of enforcement of a judgment under 
                section 1605A against a foreign state or an agency or 
                instrumentality of that foreign state.
            ``(3) Applicable property.--Subject to paragraph (4) and 
        notwithstanding any other provision of law, including any 
        provision of law relating to sovereign immunity and the 
        provisions of section 1611, the property of a foreign state 
        against which a judgment is entered under section 1605A or 
        under section 1605(a)(7) (as such section was in effect on 
        January 27, 2008), and the property of an agency or 
        instrumentality of such a state, including property that is a 
        separate juridical entity or is an interest held directly or 
        indirectly in a separate juridical entity, is subject to 
        attachment in aid of execution, and execution, upon that 
        judgment as provided in this subsection, regardless of--
                    ``(A) the level of economic control over the 
                property by the government of the foreign state;
                    ``(B) whether the profits of the property go to 
                that government;
                    ``(C) the degree to which officials of that 
                government manage the property or otherwise control its 
                daily affairs;
                    ``(D) whether that government is the sole 
                beneficiary in interest of the property; or
                    ``(E) whether establishing the property as a 
                separate entity would entitle the foreign state to 
                benefits in United States courts while avoiding its 
                obligations.
            ``(4) United states sovereign immunity inapplicable.--Any 
        property of a foreign state, or agency or instrumentality of a 
        foreign state, to which paragraph (1) applies shall not be 
        immune from attachment in aid of execution, or execution, upon 
        a judgment entered under section 1605A or under section 
        1605(a)(7) (as such section was in effect on January 27, 2008), 
        because the property is regulated by the United States 
        Government by reason of action taken against that foreign state 
        under the Trading With the Enemy Act (50 U.S.C. 4301 et seq.) 
        or the International Emergency Economic Powers Act (50 U.S.C. 
        1701 et seq.).
            ``(5) Third-party joint property holders.--Nothing in this 
        subsection shall be construed to supersede the authority of a 
        court to prevent appropriately the impairment of an interest 
        held by a person who is not liable in the action giving rise to 
        a judgment in property subject to attachment in aid of 
        execution, or execution, upon such judgment.
            ``(6) Discharge from liability.--The final judgment 
        directing attachment in aid of execution or execution against 
        an asset described in paragraph (1)(E)(iii), including any mid-
        stream electronic funds transfer to a judgment creditor under 
        this section shall provide that--
                    ``(A) any financial agency or financial institution 
                ordered to attach in aid of execution or execute 
                against any such asset that is involved in processing 
                any transfer related to those assets shall be 
                discharged of any and all liability to any party with 
                respect to such funds transfer;
                    ``(B) for purposes of determining the liability of 
                the originator of any mid-stream funds transfer to a 
                foreign state against which a judgment has been entered 
                under section 1605A or under section 1605(a)(7) (as 
                such section was in effect on January 27, 2008), or to 
                the agency or instrumentality of such a state, the mid-
                stream transfer shall be treated as if it were 
                completed and payment were received by the intended 
                beneficiary; and
                    ``(C) the foreign state against which a judgment 
                has been entered under section 1605A or under section 
                1605(a)(7) (as such section was in effect on January 
                27, 2008), and each agency and instrumentality of such 
                a state shall be barred from pursuing any claim related 
                to the assets turned over pursuant to this subsection 
                against any entity discharged pursuant to subparagraphs 
                (A) and (B).
            ``(7) State preemption.--To the extent that any State or 
        local law is inconsistent with the requirements of this 
        subsection, the requirements of this subsection shall preempt 
        such State or local law.''.
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