ICJ Case Regarding Illegal Freezing of Iranian Assets Remains Open

By: Tiffany D. Johnson

Impunity Watch News Staff Writer

THE HAUGUE, The Netherlands – In March of 2023, the International Court of Justice (ICJ) rendered a landmark judgment in the case concerning “Certain Iranian Assets” (United States Diplomatic and Consular Staff in Tehran, United States of America v. Iran), requiring the United States to justly compensate the Islamic Republic for economic sanctions that violated the Treaty of Amity. However, both parties have yet to come to an agreement on the amount due.

Members of the Delegation of the Islamic Republic of Iran listen to the International Court of Justice’s judgment in the case concerning Certain Iranian Assets on March 30, 2023, at the Peace Palace in The Hague. | Photo courtesy of Wiebe Kiestra via the International Court of Justice.

The case stems from a dispute between the United States and Iran regarding the freezing of Iranian assets by the U.S. government during the Iranian Revolution in 1979. The Foreign Sovereign Immunities Act (FSIA) was modified by the US in 1996 to revoke immunity for states identified as “State sponsors of terrorism.” Many plaintiffs filed lawsuits against Iran, which the US designated as a “State sponsor of terrorism” in 1984, alleging that Iran supported acts that caused damages. This was due to the FSIA’s terrorism exception. Enacted in 2002, the Terrorism Risk Insurance Act (TRIA) allowed for the enforcement of judgments entered in accordance with the FSIA’s 1996 amendment.

Crucially, Section 201 of TRIA states that in these situations, an entity designated as a “terrorist party” may have its assets executed or attached in order to aid in its execution. Executive Order 13599 issued by President Barack Obama in 2012 resulted in the blocking of all Iranian government assets within U.S. jurisdiction. Then, in order to comply with default judgments against Iran, the United States passed the Threat Reduction and Syria Human Rights Act (ITRSHRA), which put Bank Markazi’s assets up for execution.

Iran filed a suit against the United States with the ICJ in 2016, alleging that by allowing private litigants to pursue lawsuits against Iran and attaching confiscated Iranian assets to satisfy judgments obtained against Iran in those actions, the United States had violated both the 1955 Treaty of Amity between the two nations and international law norms on State immunity. Iran argued that these actions constituted a violation of international law, specifically the Treaty of Amity, Economic Relations, and Consular Rights between the two nations. The ICJ was tasked with adjudicating on the legality of the U.S. government’s actions and determining the reparations owed to Iran.

In its March 2023 judgment, the ICJ acknowledged the delicate balance between state sovereignty and international obligations. The Court affirmed that the U.S. government’s freezing of Iranian assets indeed violated the Treaty of Amity. Notably, the ICJ emphasized the principle that states must respect the rights of other nations, irrespective of political tensions or conflicts.

The Court held that the freezing of assets had adversely affected Iran’s economic interests and, by extension, violated its rights under the Treaty. Although the Court ruled that it could not order the United States to unfreeze assets held by the Iranian central bank worth nearly $1.75 billion, it did mandate that the U.S. reimburse Iranian companies for the sanctions it had imposed and the other assets it had seized.

If the U.S. and Iran are unable to agree on the amount of compensation due to Iran within 24 months of the ruling, the matter, at the request of either party, will be settled by the Court. As of right now, there has been no agreement on appropriate compensation between the United States and Iran and the case remains open on the Court’s General List.

For further information, please see:

Just Security – After ICJ’s “Certain Iranian Assets” Judgement, Iran and United States Both Claim Victory – 17 April 2023.

International Court of Justice – Certain Iranian Assets (Islamic Republic of Iran v. United States of America), Judgment – 30 March 2023.

International Court of Justice – Press Release: The Court delivers its Judgment on the merits of the case – 30 March 2023

Treaty of Amity, Economic Relations, and Consular Rights between the United States of America and Iran, 1955, 8 U.S.T. 899.

UN Press – International Court of Justice Docket Reflects Legal Questions Concerning All Humanity in Every Region, President Says, as General Assembly Takes Up Report – 26 Oct 2023

Author: Sydney Krause