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How Supreme Court decision to freeze Iran assets undermines US foreign policy

The US Supreme Court’s decision to seize Iranian assets to compensate terror victims is creating a backlash that undermines US business interests and could sabotage US foreign policy.
The U.S. Supreme Court is seen in Washington March 29, 2016. The U.S. Supreme Court on Tuesday split 4-4 for the first time in a major case since the death of Justice Antonin Scalia on a conservative legal challenge to a vital source of funds for organized labor, affirming a lower-court ruling that allowed California to force non-union workers to pay fees to public-employee unions. REUTERS/Gary Cameron - RTSCOU4

The dysfunctional relationship between the United States and Iran has produced its share of victims over the years. On the Iranian side, they include nationalist political figures, civilian airline passengers, chemical warfare survivors, businessmen caught up in sanctions enforcement and average people harmed by decades of sanctions. The United States can claim harm done to American diplomats, soldiers and a wide range of Iranian-Americans whose lives have been torn apart by the Iranian government’s distrust of dual nationals. The grievances are real, but victims have largely been blocked from redress by a foundational principle of international law called state immunity, which says that governments cannot use their judicial systems to sit in judgment of one another.

The concept that a nation is immune from lawsuits in the courts of another is accepted internationally, even in cases where the alleged harm is egregious. The United States enshrined state immunity as law through the Foreign Sovereign Immunities Act (FSIA) of 1976. Since its enactment, FSIA has gone through transformations resulting in exceptions to the law that include the right of victims of terrorism to sue states listed as “state sponsors of terrorism.” This list includes Iran, but not US allies such as Saudi Arabia. Recent actions under the FSIA exceptions include the US Supreme Court’s decision to uphold the seizing of $2 billion of Iranian assets to compensate victims of the 1983 Marine barracks bombing in Beirut, a lawsuit against Iran filed by former Marine and prisoner Amir Hekmati and a widely mocked decision by a federal court that found Iran liable for the Sept. 11 attacks. The United States seems to be moving forward with the aggressive use of FSIA exceptions to account for past Iranian actions, but the further weakening of state immunity will have unintended consequences that are likely to backfire.

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