Collecting Judgments in Foreign Sovereign Immunities Act Terrorism Cases: Legal Framework, Economic Analysis, and Practical Realities

The Foreign Sovereign Immunities Act of 1976 (FSIA), 28 U.S.C. §§ 1602–1611, codified the restrictive theory of sovereign immunity and moved immunity determinations from the Executive Branch to the Judiciary (28 U.S.C. §§ 1602–1611). In 2008, Congress created the terrorism exception at 28 U.S.C. § 1605A through the National Defense Authorization Act for Fiscal Year 2008 (NDAA). Section 1605A authorizes civil actions by specified plaintiffs against designated state sponsors of terrorism for acts including torture, extrajudicial killing, hostage taking, and the provision of material support, and it permits compensatory and punitive damages. Federal courts have awarded substantial damages under § 1605A, with the Supreme Court confirming in Opati v. Republic of Sudan that punitive damages are available for pre-enactment conduct when a case proceeds under § 1605A (May 18, 2020). Converting judgments to money is difficult. Execution immunities, the scarcity and mobility of attachable assets, licensing limits administered by the Office of Foreign Assets Control (OFAC), and diplomatic protections under the Vienna Convention on Diplomatic Relations (VCDR) of 1961 and the Vienna Convention on Consular Relations (VCCR) of 1963 all constrain recoveries. This article explains the legal background, synthesizes decisions that shape liability and collection (including Bank Markazi v. Peterson and Rubin v. Islamic Republic of Iran), outlines how creditors pursue collection under the FSIA, the Terrorism Risk Insurance Act of 2002 (TRIA) Section 201, and targeted statutes, and summarizes accepted approaches to economic damages in default settings. It concludes with practical observations about recoveries, which often depend in part on the U.S. Victims of State Sponsored Terrorism Fund (USVSST Fund) and announcements by the U.S. Department of Justice.