Assets of one government usually enjoy immunity in another country, meaning that local courts cannot rule to confiscate, seize or freeze them. However, this principle does not apply to assets on American soil owned by the Islamic Republic of Iran.

The Iranian government’s assets, which, in effect, belong to the Iranian people, have lost their immunity in the US and the Islamic Republic now owes billions of dollars to American citizens as a result of American court verdicts.

How Did the Guards Manage to Wreck Iran’s Immunity?

The story goes back to the early years after the 1979 Islamic Revolution. At 6:22 on the morning of Sunday, October 23, 1983, a truck carrying hundreds of kilograms of explosives made its way into the parking lot next to the barracks of the US 8th Marine Regiment in Beirut, where more than 300 American soldiers and other members of a multinational peace-keeping force were sleeping.

The explosion that followed killed 241 American soldiers, more than 50 French soldiers and a number of civilians and injured several, some of whom were maimed for life. Less than three months after the attack, in January 1984, the US government designated Iran as a “state sponsor of terrorism,” which was authorized by an act of Congress.

The marines killed in that terrorist attack represented the largest loss of life in a single day for the Marine Corps since the Battle of Iwo Jima in World War II, and, before the 9/11 attacks, the highest number of fatalities of Americans in one day. A group calling itself Islamic Jihad claimed responsibility for the attack, but there were doubts that such a group existed. A short while later, some analysts concluded that the modus operandi of the attack indicated that the Lebanese Hezbollah, organized and supported by Islamic Revolutionary Guards Corps, were most likely responsible (IRGC).

Thirteen years after the attack on the marine barracks in Beirut, the US Congress amended the American law on the immunity of foreign governments, allowing Americans who have been hurt by terrorist attacks anywhere in the world or their families to file lawsuits in US courts against state sponsors of terrorism.

The US government had already designated the Islamic Republic as a state sponsor of terrorism, so after the Congress passed the amendment, the Iranian government’s immunity from the rulings of American courts was automatically voided.

What happened After Iran Was Stripped of its immunity in the US

Shortly after American courts were authorized to accept lawsuits by the victims of terrorism, Stephen Flatow, the father of Alisa Flatow, a 20-year-old American college student who had been killed in a suicide bombing in Gaza in 1995, filed a lawsuit in a federal court in New York against the Supreme Leader Ayatollah Khamenei, President Akbar Hashemi Rafsanjani and Intelligence Minister Ali Fallahian. The Palestinian Islamic Jihad claimed responsibility for the suicide attack and, since the Islamic Republic supports this group, the court ruled that Iran must be held accountable for the attack.

In March 1998 the court ruled in favor of Alisa Flatow’s father and sentenced the Islamic Republic to pay $248 million in damages to the victim’s family. Iran has refused to abide by the verdict, dismissing it and the lifting of the immunity as violations of international laws. This was the first American court ruling that went against the traditional immunity of foreign governments after US Congress’ revocation of that provision. But the Iranian government’s assets in the US had yet to be seized or frozen and the Flatow family were looking for a way to force the government of the Islamic Republic to abide by the court’s ruling and pay the damages that the verdict had set.

How Iranian Assets in the US became Subject to Confiscation

One of the most important and effective lawsuits against the Islamic Republic in US courts was brought by the families of the victims of the 1983 terrorist attack on Marine barracks in Beirut. Even though the US had accused Iran of involvement in this attack and had designated Iran a state sponsor of terrorism three months later, it took so many years before American courts were authorized to handle lawsuits against the Islamic Republic that the victims’ families and their survivors filed their own lawsuit.

Finally, 20 years after the deadly terrorist attack in Beirut, an American federal court granted a number of plaintiffs the right to reparations. The plaintiffs argued that the Islamic Republic was responsible for the actions of the Lebanese Hezbollah because the group had been established, organized, trained and supported by the Revolutionary Guards. The court accepted their arguments and awarded them a total of $2.65 billion of damages against the Islamic Republic.

Nevertheless, the courts still refused to order the seizure of the Islamic Republic’s assets in the United States. However, in 2012 Congress passed the “Iran Threat Reduction and Syria Human Rights Act,” which explicitly allowed American courts to order the seizure and freezing of assets belonging to the Islamic Republic of Iran.

It took another five years for the US courts to issue such orders. Now the families of the victims of the Beirut attack had the task of identifying assets belonging to the Islamic Republic and informing the court so the assets could be seized to pay them reparations. In one case they identified $1.75 billion dollars belonging to the Iranian Central Bank, which the court blocked.

Iranians Lose a Staggering Sum to Pay Reparations

This asset was frozen by order of the court. This time the government of the Islamic Republic, which had never appeared before US courts, appealed the verdict and the appeals court ruled in favor of the Islamic Republic. The plaintiffs then appealed to the US Supreme Court, which ruled against the Islamic Republic 6 to 2 and ordered that the frozen asset must be distributed among victims’ families. The order was carried out.

But this $1.75 billion was only part of the court-ordered reparations. The families of Beirut victims have continued their search for Iranian assets both inside and outside the United States and, as of now, they have won court orders to freeze some of these assets. In some cases the Islamic Republic has succeeded in unfreezing assets. This battle between US citizens and the Islamic Republic has been ongoing.

Since the lifting of the immunity for the Islamic Republic government as a result of the Revolutionary Guards’ actions and since the US courts were authorized to accept lawsuits against Iran and to freeze its assets, scores of final verdicts against Iran, worth close to $90 billion, have been issued. Iran has filed a lawsuit with the International Court of Justice in the Hague over its frozen assets in the United States.

To get an idea of what $90 billion means to Iran, it is instructive to compare it to the Iranian government’s projected 2019 income from its oil exports. The best estimate is approximately $30 billion but even this amount is uncertain due to strict American sanctions. In addition, the sums payable by Iran to American victims of terrorism accrue interest over time. For example, the initial verdict for the families of the Beirut victims awarded them $800 million but it took 16 years for this verdict to be carried out — and by that time the sum had reached 2.65 billion.

In summary, in addition to everything else, the actions of the Revolutionary Guards have robbed the Iranian people of a staggering sum, and continue to do so to this day.

Related Coverage:

The Iranian Government Has No Sway Over the Revolutionary Guards, July 1, 2019

Why the US Cannot Believe Iran's Denials, July 1, 2019

Sanctions Against Zarif: How Far Will They Go?, June 27, 2019

Sanctions on Ayatollah Khamenei are Much More Than Symbolic, June 25, 2019

The Revolutionary Guards: The Usual Suspects in the Persian Gulf, June 24, 2019

Guards Fear Internal Turmoil as Much as US Attack, June 21, 2019

Does Iran Really Want to Negotiate with the US?, June 21, 2019

Will Iran Violate the Nuclear Deal on June 27?, June 17, 2019

Decoding Iran’s Politics: The JCPOA Ultimatum, May 16, 2019

Iran's Partial Withdrawal from the Nuclear Agreement: What are the Consequences?, May 8, 2019

Decoding Iran’s Politics: The 12-Point US Ultimatum, July 6, 2018

Can Iran Legally Close the Strait of Hormuz?, July 5, 2018