Second Circuit Rules Creditors Can Require Garnishees to Bring Assets From Abroad to the United States to Satisfy Judgments Against Foreign Sovereigns: In a Noteworthy Ruling for Judgment Creditors, the Second Circuit Held That the Foreign Sovereign Immunities Act Poses No Obstacle to Requiring a Bank in New York to Bring Funds It Holds Outside the United States to New York to Satisfy a Judgment Against Iran

Sullivan & Cromwell LLP - December 1, 2017
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In Peterson v. Islamic Republic of Iran, the U.S. Court of Appeals for the Second Circuit became the first court to hold that U.S. courts can compel banks to bring funds held by foreign sovereigns outside the United States to New York to satisfy judgments against those sovereigns.  Peterson has significant implications for international banks, as the decision will encourage plaintiffs to seek to attach assets held by sovereign judgment debtors at foreign branches of U.S. banks, foreign headquarters of banks with New York branches, and other multinational entities holding foreign assets abroad.  That said, the Second Circuit made clear that there are significant prerequisites to forcing banks to bring a foreign sovereign’s money from abroad into the United States, which may limit the impact of the opinion.