Vesting of Iranian Assets

Headnotes: 

Because the International Emergency Economic Powers Act does not authorize vesting of foreign property, and the Trading with the Enemy Act authorizes vesting only in wartime, in the absence of a declaration of war against Iran it would be necessary to seek new legislation in order for the United States to take title to the blocked Iranian assets.

No domestic constitutional issue would be raised by legislation authorizing the vesting of Iranian government property; moreover, vesting for the benefit of either private claimants or the U.S. government would be consistent with principles of international law, either as a self-help method of securing payment for damages, or as a reprisal for Iran’s continuing violations of international law.

Vesting legislation would have little effect on pending domestic litigation involving the blocked Iranian assets, and its effect on pre-judgment attachments would depend upon the validity of such attachments under state law.  Vesting legislation would not be enforceable against property located abroad, and would therefore have no effect on foreign litigation involving Iranian dollar deposits in U.S. branch banks abroad, unless foreign courts were to hold that such dollar deposits are in reality located at the home office of the banks in the United States.

Updated July 9, 2014