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already been licensed to set off amounts owed them by Iran against these accounts. Once withdrawal licenses are issued, there should be no legal impediment to Iranian withdrawal of the remaining balances of the accounts.8

5 Our preceding analysis, concluding that the President may enter agreements resulting in final settlements of the claims of American citizens, makes it clear that an incident of such a settlement would be the voiding of attachments and other inchoate interests relating to those claims. United States v. The Schooner Peggy, 5 U.S. (1 Cranch) 103 (1801).

6 Because of the reservation of the right to revoke these attachments, it is clear that they can be revoked under IEEPA without giving rise to a successful takings claim. See, e.g, Bridge Co. v. United States, 105 U.S. 470 (1881); United States v. Fuller, 409 U.S. 488 (1973).

7 Nor do the Iranian Assets Control Regulations conclusively determine the effects of a possible revocation of the existing licenses for judicial proceedings on the rights of private parties inter se. Although $535.805 provides that licenses "may be amended, modified, or revoked at any time," other ambiguous provisions suggest that private rights, if not public ones, may have accrued in the meantime. See § 535.203(c), which states that "unless otherwise provided," licenses render transactions enforceable "to the same extent" as they would be absent IEEPA. See also § 535.502(c), providing that unless otherwise specified, licenses do not create interests in property which "would not otherwise exist under ordinary principles of law," and § 535.402, stating that revocation of licenses, "unless otherwise specifically provided," do[es] not affect the validity of prior actions. The reservation in these regulations of power to specify special conditions, however, may provide a sufficient warning to attachment lienors that their interests may be negated entirely. Revocation orders should attempt to destroy the attachments for all purposes, relying on the special conditions power.

8 It is possible that after withdrawal licenses are issued, creditors of Iran will attempt to attach some of these accounts through actions in foreign courts. Such an eventuality could raise jurisdictional conflicts. In an analogous context, the United States Supreme Court has assented to an executive policy of denying foreign claimants resort to formerly blocked assets, at least unless their claims related to transactions in this country. United States v. Pink, . . . [315 U.S. 203 (1942)]. International law principles of comity suggest that foreign courts would therefore allow their own domestic claimants a special priority in adjudicating rights to Iranian funds found there.

Ops. Off. Legal Counsel, Vol. 4A (1985), pp. 248, 249, 253-258; Dept. of State File No. P85 0118-1016.

Assistant Attorney General Harmon transmitted the memorandum, ante, jointly to Robert Carswell, Deputy Secretary of the Treasury, and Roberts B. Owen, Legal Adviser of the Department of State, under cover of a memorandum dated Sept. 16, 1980 that noted:

While several of the points considered probably will not be raised in the immediate discussion, the analysis and conclusions may provide useful background for your present purposes. . . .

Dept. of State File No. P85 0118-1139.

See, also, as of related interest, Asst. Attorney General Harmon's memorandum for the Attorney General, "Congressional Power to Provide for the Vesting of Iranian Deposits in Foreign Branches of United States Banks”, also dated Sept. 16, 1980, at Ops. Off. Legal Counsel, Vol. 4A (1985), pp. 265-272.

On January 19, 1981, the United States and Iran reached agreement, through the Government of the Democratic and Popular Republic of Algeria, as intermediary, on the terms and conditions under which Iran would release the fifty-two Americans who had been taken hostage at the American Embassy at Tehran on November 4, 1979.

The overall agreement consisted of: (1) the Declaration of the Government of the Democratic and Popular Republic of Algeria (the first, basic Declaration), (2) the Declaration of the Government of the Democratic and Popular Republic of Algeria Concerning the Settlement of Claims by the Government of the United States of America and the Government of the Islamic Republic of Iran (the Claims Settlement Agreement), and (3) the Undertakings of the Government of the United States of America and the Government of the Islamic Republic of Iran With Respect to the (first) Declaration of the Government of the Democratic and Popular Republic of Algeria, all initialled on January 19, 1981; and (4) the Escrow Agreement, among the Government of the United States of America, the Federal Reserve Bank of New York (the "FED"), as Fiscal Agent of the United States, Bank Markazi Iran, as an interested party, and the Banque Centrale D'Algérie as Escrow Agent, and (5) the Technical Arrangement Between Banque Centrale D'Algérie as Escrow Agent and the Governor and Company of the Bank of England and the Federal Reserve Bank of New York as Fiscal Agent of the United States, both signed on January 20, 1981. (See, this Digest, Ch. 9, §3, ante, and Ch. 13, §§ 1 and 2, post.)

In the first, basic Declaration, the United States agreed, in return for the release of the hostages, to restore the financial position of Iran, insofar as possible, to that existing prior to November 14, 1979 (the date of Executive Order 12170, blocking all official Iranian assets subject to, or becoming subject to, the jurisdiction of the United States or in, or coming within, the possession or control of persons subject to the jurisdiction of the United States). Within that context, the United States committed itself to "ensure the mobility and free transfer" of all such assets as set forth in paragraphs 4-9 of

the Declaration and agreed to release them to Iran through the Algerian Central Bank as Escrow Agent.

In accordance with the Understandings, Iranian official assets in the Federal Reserve Bank of New York (paragraph 4 of the Declaration) and those in foreign branches of United States banks (paragraph 5 of the Declaration) were paid into escrow at the Bank of England; these assets amounted to $7.955 billion. Of this amount, approximately $3.67 billion was used to pay off principal and interest outstanding on syndicated loan agreements in which a United States banking institution was a party. An additional $1.418 billion was retained in the escrow account to pay all other loans held by United States banking institutions not previously paid and for paying disputed amounts of deposits, assets, and interest, if any, owing on Iranian deposits in United States banking institutions. The remainder of approximately $2.88 billion was paid to Iran through Bank Markazi.

Other categories of Iranian official assets were also required to be transferred to Iran: (a) within six months from the date of the Declaration, assets in United States branches of United States banks (pars. 6 and 7 of the Declaration); (b) assets held in United States non-banking institutions in the United States and abroad (par. 8 of the Declaration); and (c) other property held in the United States or abroad (par. 9 of the Declaration). Of the Iranian official assets in United States branches of United States banks, however, Iran agreed that $1 billion was to be placed in a security account for the purpose of paying claims against Iran in accordance with the Claims Settlement Agreement (agreed to in principle in the first, basic Declaration, the details thereof being set out in the second Declaration, the Declaration of the Government of the Democratic and Popular Republic of Algeria Concerning the Settlement of Claims by the Government of the United States of America and the Government of the Islamic Republic of Iran). Iran agreed, further, to maintain a $500 million minimum balance in the security account established for the purpose of paying claims against Iran until the President of the Iran-United States Claims Tribunal established by the second Declaration had certified to the Central Bank of Algeria that all arbitral awards against Iran had been satisfied.

For the texts of the two Declarations, the (separate) Undertakings of the two Governments (regarding the first Declaration), the Escrow Agreement, and the Technical Arrangement, see: American Foreign Policy: Current Documents, 1981 (1984), pp. 737-746, 758-761; Dept. of State Bulletin, Vol. 81, No. 2047, Feb. 1981, pp. 1-7, 14-15; International Legal Materials, Vol. 20 (1981), pp. 224-240.

On January 19, 1981, President Carter issued ten Executive Orders (Nos. 12276-12285) to implement the agreements. Executive Orders 12277-12281 implemented the U.S. obligation to effect

transfers of the various categories of blocked Iranian assets specified under the respective provisions of the (first, basic) Declaration of the Government of Algeria, dated January 19, 1981.

Executive Order 12277, "Direction to Transfer Iranian Government Assets," related to assets in the custody of the Federal Reserve Bank, including gold bullion. Executive Order 12278, "Direction to Transfer Iranian Government Assets Overseas," related to assets in foreign branches of U.S. banks. The other orders were: No. 12279, "Direction to Transfer Iranian Government Assets Held by Domestic Banks," No. 12280, "Direction to Transfer Iranian Government Financial Assets Held by Non-Banking Institutions," and No. 12281, "Direction to Transfer Certain Iranian Government Assets" (properties, not including funds and securities).

Exec. Order 12282 revoked the prohibition against transactions involving Iran set out in Exec. Orders 12205, Apr. 7, 1980, and 12211, Apr. 17, 1980, and in Proc. 4702, Nov. 12, 1979.

For the texts of Exec. Orders 12278-12282, see 3 CFR, 1981 Comp. (Jan. 1, 1982), pp. 107-114; American Foreign Policy: Current Documents, 1981 (1984), pp. 748-753; Dept. of State Bulletin, Vol. 81, No. 2047, Feb. 1981, pp. 7-11.

For the opinion of Attorney General Benjamin R. Civiletti, “Legality of the International Agreement with Iran and Its Implementing Executive Orders”, Jan. 19, 1981, see Ops. Off. Legal Counsel, Vol. 4A (1985), pp. 302-313.

See, further, this Chapter, §12, post.

Vested Assets-World War II

United States-Switzerland: Settlement of Claims

In an exchange of notes at Washington on March 12, 1980, the United States and Switzerland concluded an agreement on settlement of claims regarding three categories of property vested by the Office of Alien Property Custodian as German enemy property during World War II or shortly thereafter.

The categories of property involved were: (A) property in the United States owned by Swiss citizens resident in Germany ($40,000); (B) property in the United States owned by Swiss women who had married Germans and become German nationals ($600,000); and (C) share interests in United States corporations owned by Swiss citizens who could not prove their predecessors in interest were non-enemy ($60,000).

The Government of Switzerland had pursued the claims since 1963 with the Departments of State and Justice, which had disputed their validity. In more recent years prior to 1980 the Swiss Government had emphasized only those claims that involved Swiss citizens resident in Germany.

The agreement provided for a payment of $20,000 to the Swiss Government, the payment to be “ex gratia without prejudice to the views of either Government as to the validity of claims involved." The

agreement also provided that the payment was subject to the enactment of legislation by the United States Congress making available the necessary funds.

Authorizing legislation was introduced in the House July 2, 1980 (H.R. 7729, 96th Cong., 2d Sess.) as part of a longer bill dealing with the operations of the Office of Alien Property, upon which hearings were held on July 11, 1980, with supporting testimony from representatives of the Departments of State and Justice. The bill was brought to the floor of the House on September 30, 1980, and was passed; see Cong. Rec., Vol. 126 (1980), pp. 28473-28475 for texts of the notes exchanged and the proposed legislation, which failed, however, to pass the Senate. (The notes may also be found at Department of State File Nos. P80 0036-1281 and P80 0036-1283.)

Similar legislation was proposed at succeeding sessions of Congress. The Department of State finally obtained inclusion of the necessary authorizing legislation to make the agreed payment of $20,000 to Switzerland as Section 803 of the Foreign Relations Authorization Act, Fiscal Years 1986 and 1987, Public Law 99-93, approved August 16, 1985, 99 Stat. 405, 449. Section 803 amended Section 39 of the Trading With the Enemy Act (62 Stat. 1246; 50 U.S.C. App. 39) to authorize the Attorney General to pay the $20,000 as an ex gratia payment to the Government of Switzerland, in accordance with the terms of the agreement of March 12, 1980, the funds to come from the proceeds of property vested in or transferred to the Attorney General under the Trading With the Enemy Act.

-E.M.

§6

Debt Rescheduling

Bilateral Agreements

United States-Sudan

On May 17, 1980, representatives of the United States of America and of the Democratic Republic of the Sudan signed an Agreement Regarding the Consolidation and Rescheduling of Certain Debts Owed to, Guaranteed or Insured by the United States Government and its Agencies; TIAS 9952; 32 UST 4373; entered into force, June 19, 1980.

Concluded in accordance with the provisions of the (annexed) Agreed Minute on the Consolidation of Sudan's Debts, signed at Paris on November 13, 1979, the Agreement was to be implemented by separate agreements between the Sudan and the United States with respect to Public Law 480 agreements, and between Sudan and the United States Agency for International Development and the Export-Import Bank of the United States (the "Agencies").

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