What will the Iran deal mean for judgment creditors?

At first blush, there’s nothing in the Iran deal that specifically relates to the scores of judgments against the Islamic Republic of Iran for its terrorist actions. Nor were there any leaks during the negotiation process that this was a subject of discussion.

However, after taking a deeper dive into the text of the agreement, a few troubling hints emerge.

First is the inclusion of Assa Corp and Assa Corp Ltd in Attachment 3, the list of individuals and entities scheduled for immediate sanction relief on “Implementation Day” (roughly 2-6 months from now).

Graph 7 on page 70 makes clear that the immediate sanctions relief offered these entities includes

 “unblocking of property and interests in property within U.S. jurisdiction for individuals set out in Attachment 3 of this Annex.”

Does that mean the 40% share in the 650 Fifth Avenue property owned by Assa Corp beneficially for Bank Melli, and currently the subject of federal foreiture proceedings, will be unblocked and released to Assa Corp and transferred back to Iran? If the law is any measure, probably not. But as Secretary Kerry pointed out in presenting this agreement, we are entering a world of new policies.

For example, in several places the agreement commits the United States government to intervening not only with Congress to repeal a broad array of sanctions laws, but also with state and local governments that have passed divestment laws.

Graph 25 of the main agreement states unequivocally:

 If a law at the state or local level in the United States is preventing the implementation of the sanctions lifting as specified in this JCPOA, the United States will take appropriate steps, taking into account all available authorities, with a view to achieving such implementation. The United States will actively encourage officials at the state or local level to take into account the changes in the U.S. policy reflected in the lifting of sanctions under this JCPOA and to refrain from actions inconsistent with this change in policy.

The agreement calls for the normalization of trade and economic relations with Iran, and spells out in great detail how and when specific sanctions will be lifted and specific laws mooted through presidential waivers pending legislative repeal.

Here’s where it gets tricky. In §29, the parties commit to:

refrain from any policy specifically intended to directly and adversely affect the normalisation of trade and economic relations with Iran…

Will Iran make a case, as allowed under the JCPOA, that monetary judgments against it under the Foreign Sovereign Immunity Act and/or TRIA “adversely affect the normalization of trade and economic relations?” If so, the agreement gives them the possibility of convening the Joint Commission, where Iran sits along with Russia and China, to seek to impose their will on the United States.

This could spell big potential trouble for judgment creditors.