Damage Actions Authorized by 1991 Anti-Terror Act

Mr. Ungar was a Brooklyn-born rabbinical student in Israel where he lived with his wife and two young children. His wife, Erfat, also was killed in the attack, but, because she was an Israeli citizen, her estate could not sue for damages under the Anti-Terrorism Act, 18 U.S.C. § § 2331-2338. Only U.S. citizens may avail themselves of the 1991 law, which for the first time authorized victims of terrorist acts anywhere in the world to bring damage actions in federal court.

The problem confronting Justice Kornreich was determining ownership of the $30 million frozen at the Bank of New York.

Mr. Strachman contended that the Palestine Monetary Authority is an "alter ego" of the Palestinian National Authority and the Palestine Liberation Organization.

Ownership of $30M at Stake

Justice Kornreich rejected the argument, finding that the Palestine Monetary Authority "deals at arm's length with the [national authority] and is treated as a separate profit center."

Both the Palestinian National Authority and the Palestine Monetary Authority were established by the 1994 Oslo Accords. The monetary authority was not named as a defendant in the underlying damage action in federal court nor did U.S. Judge Ronald R. Lagueux, who assessed the $116 million damage award, name the monetary authority in his order listing entities whose assets could be frozen to satisfy the judgment. Judge Lagueux sits in Providence, R.I., where Mr. Strachman lives.

According to Justice Kornreich's opinion, evidence at the hearing showed that the monetary authority performed many of the functions of a national central bank, such as the Federal Reserve in the United States, though not precisely the same functions, because the Palestinian National Authority is not a state. Those functions included insuring the soundness of the banking system, maintaining monetary stability and encouraging economic growth.