Justice for United States Victims of State Sponsored Terrorism Act: Eligibility and Funding

Updated November 25, 2025

Justice for United States Victims of State Sponsored Terrorism

Act: Eligibility and Funding

Since 1996, the Foreign Sovereign Immunities Act (FSIA,

28 U.S.C. §§ 1602-11) has authorized U.S. courts to order

designated state sponsors of terrorism—namely, Iran, North

Korea, Cuba, and Syria and previously Libya, Iraq, and

Sudan—to pay monetary damages to terrorism victims.

Courts have since awarded billions of dollars against these

states. Although these states have largely not participated in

this litigation at the merits phase, some have appeared in

court to prevent plaintiffs from collecting their assets.

Satisfaction of Terrorism Judgments

Claims against Libya, and some claims against Sudan, were

ultimately resolved through bilateral claims settlement

agreements. Congress preserved claims against Sudan

involving victims and family members of the 9/11 attacks

in the Consolidated Appropriations Act, 2021 (P.L. 116260). Judgments against Iraq were paid through liquidating

Iraqi assets frozen pursuant to the International Emergency

Economic Powers Act (IEEPA, 50 U.S.C. §§ 1701-10)

prior to vesting the remaining Iraqi assets in the United

States for contribution to the Development Fund for Iraq.

Some judgment holders against other state sponsors of

terrorism received compensation through Section 2002 of

the Victims of Trafficking and Violence Protection Act

(P.L. 106-386) or by attaching frozen assets pursuant to

Section 201 of the Terrorism Risk Insurance Act (28 U.S.C.

§ 1610 note) to satisfy the judgments. Due to the scarcity of

these states’ attachable assets in the United States, the vast

majority of terrorism judgments remain outstanding.

Congress has taken steps to enable these judgment creditors

to obtain at least some of the damages owed to them.

Passed as part of the Consolidated Appropriations Act,

2016 (P.L. 114-113), the Justice for United States Victims

of State Sponsored Terrorism Act (Act), 34 U.S.C. § 20144,

established the United States Victims of State Sponsored

Terrorism Fund (USVSST Fund or Fund) to provide a

means for creditors with terrorism judgments against

designated state sponsors of terrorism to satisfy the

compensatory portion of their judgments. Congress has

since amended the Act to expand the scope of eligibility for

compensation under the Fund, among other things.

2019 Clarification Act

In 2019, Congress passed the Justice for United States

Victims of State Sponsored Terrorism Clarification Act

(Title VII of P.L. 116-69) (Clarification Act). The

Clarification Act amended the Act to provide coverage for

9/11 victims with judgments against Iran, some of whom

were prohibited under the original Act from receiving

compensation from the Fund because they had received

compensation from the September 11th Victim

Compensation Fund established by Section 405 of the Air

Transportation Safety and System Stabilization Act (49

U.S.C. § 40101 note). The Clarification Act also enabled

some previously excluded Iran hostage claimants to receive

compensation.

Fairness for 9/11 Families Act

In 2022, Congress passed the Fairness for 9/11 Families Act

(Division MM of P.L. 117-328) (Fairness Act), which

amended the Act to provide for catch-up payments for 9/11

victims made eligible by the Clarification Act and payments

for certain victims of either the 1983 Beirut Marine

barracks bombing or the 1996 Khobar Towers bombing.

The catch-up payments allow eligible 9/11 victims to

receive a percentage of their claims from the Fund equal to

the percentage other 9/11 family members received in

earlier rounds. The Fairness Act appropriates sufficient

funds to make these one-time catch-up payments as

assessed by the Government Accountability Office (GAO)

pursuant to the Clarification Act—which is approximately

$2.7 billion.

The Fairness Act also directs GAO to assess catch-up

payments for victims of the 1983 Beirut Marine barracks

bombing and the 1996 Khobar Towers bombing who

obtained final judgments prior to December 29, 2022, and

who file a claim within the prescribed window. That Act

establishes a $3 billion reserve fund for catch-up payments.

In 2024, GAO determined that these claimants are entitled

to receive $614 million but that some claimants who had

previously been deemed eligible might also be entitled to

receive about $116 million in catch-up payments. The

Department of Justice (DOJ) believes that claimants who

had previously been deemed eligible are not entitled under

the Fairness Act to receive catch-up payments and notes

that many of them have already recovered at least 30% of

the amount of their claims and are not eligible for payments

from regular rounds. Under the statute, anything remaining

from the reserve fund will be rolled over into the USVSST

Fund for future rounds of payments.

Eligibility

In order to be eligible for compensation from the USVSST

Fund, a claimant must be a natural person (i.e., not a

corporation or some other legal entity), regardless of

citizenship, who has not been found criminally culpable for

an act of international terrorism and who:

1. (i) holds a final judgment, decree, or order on

liability and damages (ii) issued by a U.S. federal

district court (iii) against a designated state

sponsor of terrorism (iv) based on an injury arising

from an act of torture, extrajudicial killing, aircraft

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Justice for United States Victims of State Sponsored Terrorism Act: Eligibility and Funding

sabotage, or hostage taking, or the provision of

material support for such an action (v) for which

the state is not immune under the FSIA’s terrorism

exception (28 U.S.C. § 1605A or previous 28

U.S.C. § 1605(a)(7)) (vi) that has not been

satisfied, relinquished, espoused by the United

States, or resolved pursuant to a bilateral claims

agreement; or

2. was held hostage by Iran from November 4, 1979,

through January 20, 1981, or is the spouse or child

of such a person if identified as a member of the

proposed class in Roeder v. Islamic Republic of

Iran, Docket No. 1:00-CV-03110 (D.D.C.); or

3. was held hostage by Iran during the period from

November 4, 1979, through January 20, 1981, did

not have an eligible claim before November 21,

2019, and submitted a payment application by

February 19, 2020.

The USVSST Fund entitles eligible claimants to receive up

to $20 million per individual or $35 million for families.

Family members of 9/11 victims who are not spouses or

dependents of 9/11 decedents are capped at $20 million for

each family. Qualifying victims of the Iran hostage crisis

are eligible for compensation up to $4.4 million per former

hostage ($10,000 per day) who was held hostage for the

entire 441 days or the amount of $600,000 each for their

spouses and children. Hostages taken from the U.S.

embassy in Tehran but held for less than the entire period of

the Iran hostage crisis are eligible to receive $10,000 per

day of captivity. Their spouses and children remain

ineligible. Applicants whose claims are denied may request

a hearing with the Special Master of the Fund, but awards

or denials of awards are not subject to judicial review.

Eligible claimants who provide information to the Attorney

General that leads to a forfeiture required to be paid into the

Fund may receive a reward amounting to 10% of the

deposit into the Fund.

Funding

Congress established the USVSST Fund with an initial

deposit of $1,025,000,000, the amount paid to the United

States pursuant to a 2014 settlement between the United

States and the French bank BNP Paribas for sanctions

violations. Currently, the Fund is financed:

• from all funds and the net proceeds from the sale of

property forfeited or paid to the United States as

criminal penalty or fine arising from the violation of

regulations issued under IEEPA; the Trading with the

Enemy Act; or any related civil or criminal conspiracy,

scheme, or other federal offense related to doing

business or acting on behalf of a state sponsor of

terrorism;

• from 75% of all funds and net proceeds from the sale of

property forfeited or paid to the United States as a civil

penalty or fine arising out of these types of violations.

The Act also provided for potential assignment to the Fund

of compensation received by participants in two cases

attempting to attach Iranian funds: Peterson v. Islamic

Republic of Iran and In re 650 Fifth Ave. These litigants had

three options, as explained by the Special Master: (1) opt

out of the USVSST Fund, (2) opt in but assign their portion

of proceeds to the Fund, or (3) apply for conditional

payments. The Fairness Act, however, permitted the Beirut

and the Khobar Towers victims who had initially opted out

to file claims without assigning any litigation proceeds to

the Fund or filing conditionally.

Due to the shortfall in funds that has resulted in claimants’

receiving only a small portion of the compensation owed

them, Congress, in the Fairness Act, directed GAO to assess

potential means for increasing deposits into the Fund. In

addition, the American Victims of Terrorism Compensation

Act (H.R. 1530/S. 706) has been introduced in the 119th

Congress. This bill would modify the funding mechanism

so that all net proceeds of forfeitures in connection with

covered violations would be paid into the Fund. The bills

would also direct 50% of the excess unobligated balance of

the Treasury and DOJ Forfeiture Funds into the USVSST

Fund, as well as $1,912,031,763 in proceeds from a case

that DOJ had determined do not qualify for the Fund.

Payments

Since 2017, the USVSST Fund has made five rounds of

payments totaling more than $7 billion. In 2025, the Special

Master reported that, after the fifth-round payments,

$102,238,100,613.37 will remain outstanding. That amount

will likely increase as courts continue to award judgments.

Payments are made on a pro rata basis. The Clarification

Act bifurcated payments so that, beginning with the third

round, half of the available funds are to be distributed to

9/11 claimants and half are to be distributed among non9/11 claimants. Claimants who have received 30% or more

of the amount of their compensatory damages from sources

other than the USVSST Fund (including life insurance;

pension funds; death benefit programs; federal, state, or

local government payments except for the September 11

Victim Compensation Fund; and court-awarded

compensation) will not receive payment from the USVSST

Fund until all other eligible claimants have received 30% of

their compensatory damages. Applicants who have received

some but less than 30% of compensatory damages from

other sources may apply for a proportionate sum.

The Act prohibits claimants’ attorneys from charging more

than 25% of any payment made from the USVSST Fund.

For 9/11-related claims, attorneys’ fees are capped at 15%.

The United States is to be subrogated to the rights of

applicants who receive payment from the USVSST Fund,

meaning it can seek to recover from the debtor state

sponsors of terrorism any amounts the Fund pays to eligible

claimants in satisfaction of those states’ judgments. The Act

requires the President to pursue subrogation rights as claims

or offsets of the United States in appropriate ways, such as

through potential negotiations surrounding the

normalization of relations. Judgment holders are permitted

to pursue satisfaction of any unpaid portion of their

judgments—including punitive damages and pre- or postjudgment interest awarded by the district court—through

enforcement actions in court.

Jennifer K. Elsea, Legislative Attorney

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IF10341

Justice for United States Victims of State Sponsored Terrorism Act: Eligibility and Funding

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