Hostile State Asset Denial and Settlement Act
A discussion draft that puts the blocking, confiscation, and use of a hostile state’s assets under the control of Congress — published with the adversarial review that tests it and the drafting memorandum behind its structure.
- Type
- Legislative discussion draft with supporting analysis. A starting point for staff deliberation and referral to the Office of the Legislative Counsel, not a finished measure. Not official U.S. government analysis and not the product of the Office of the Legislative Counsel.
- What it does
- Congress names the conflict. The hostile state’s property in United States jurisdiction is blocked under this Act rather than under the International Emergency Economic Powers Act. Earnings on sovereign assets are held in custody while title stays with the owner. Only a second vote of Congress converts custody into confiscation, after which a Treasury Custodian liquidates vested assets into a Settlement and Claims Account that pays adjudicated claims of United States nationals, funds the named operation, and receives a levy on the hostile state’s licensed export revenue.
- Why Congress
- Existing law already lets the President confiscate: section 203(a)(1)(C) of IEEPA, section 5(b) of the Trading with the Enemy Act, and the REPO for Ukrainians Act. None requires a finding by Congress, a claims process, or an appropriation. Brown v. United States (1814) holds that confiscation of enemy property is for Congress. The bill is Congress exercising that power on its own terms.
- Documents
- LD-2026-02, the bill and transmittal memorandum; LD-2026-02A, an adversarial review of twenty-two challenges; LD-2026-02B, the drafting memorandum that produced the version 3 structure. All dated 2 October 2026.
- Supersession
- Version 3 supersedes the draft of 22 September 2026. Reassess on enactment of related confiscation authority, on a Supreme Court or International Court of Justice decision bearing on sovereign-asset immunity or the Captures Clause, or on a change in the status of hostilities.
- Revision history
- Version 3, 2 October 2026 — adds a confiscation tier that only Congress can trigger, four channels for using vested property, an express statement of what the Act displaces, and citation corrections from a source-verification pass. Published on this site 5 October 2026.
- Congress names the conflict. Section 101 designates the hostile state, the commencement date, and the theaters. Only Congress may change them. The draft can be enacted dormant, with no state named, and activated later by joint resolution under an expedited procedure.
- Independent of IEEPA, and exclusive. Blocking rests on this Act alone. Once a state is designated, the Act is the exclusive authority for confiscating its sovereign assets, displacing the IEEPA, Trading with the Enemy Act, and REPO Act confiscation authorities as to those assets.
- Custody first. Earnings on sovereign assets go into a segregated sub-account under a statutory lien. Title stays with the owner, and principal cannot vest except as the Act provides.
- Confiscation only by a second vote of Congress. A conversion resolution requires findings of armed attack or aggression and of failure to cease and make reparation within twelve months. Only then do covered sovereign assets vest, with third-party interests protected.
- Claims paid without a further Act. The Foreign Claims Settlement Commission adjudicates claims of United States nationals, paid from the Account under a permanent appropriation; existing terrorism judgments are satisfied on the model of 22 U.S.C. 8772.
- Operations funded through an existing account. A congressionally set share of vested proceeds, after a claims reserve, goes to the Defense Cooperation Account for the named operation.
- Future revenue reached by levy. Any license for the hostile state’s commodity exports is conditioned on paying a fixed percentage of proceeds into the Account, on the model of the United Nations Compensation Commission.
- Sunset. Authorities end five years after enactment unless reauthorized. Due process includes notice, disclosure of the unclassified basis for designation, judicial review, an express innocent-owner defense, and preserved Tucker Act remedies. Diplomatic and consular property is excluded.
The bill is the proposal; the adversarial review is the argument against it; the drafting memorandum is why it is built the way it is. Read LD-2026-02 for what the Act does and the case for it. Read LD-2026-02A for every serious challenge the Act would face, stated as the court or tribunal would state it at full strength, with the response, the probable outcome, and the textual change that reduces the exposure. Read LD-2026-02B for the legal framework that moved the Act from reversible custody to congressionally triggered confiscation. The review’s bottom line: in United States courts the Act stands on firm ground; internationally the picture reverses for central bank reserves, and the Act is drafted so that accepting that risk is a decision Congress makes by a second vote.
The three documents in this series
Each document opens as a PDF in a new tab. Read them in this order.
What this series does not establish
This is a discussion draft prepared for staff deliberation. It is not a bill introduced in Congress, it is not the product of the Office of the Legislative Counsel, and it is not official U.S. government analysis. Bracketed values are open policy choices, and executable strike-and-insert text for some conforming amendments is left to Legislative Counsel.
The adversarial review states probable outcomes, not predictions of how any court or tribunal will rule. Its calls depend on the facts of a particular designation and on the forum, and its international-law assessments describe the current state of authority, which no international tribunal has yet applied to the confiscation of sovereign reserves on a belligerent-rights or collective-countermeasures theory.
Nothing in this series is legal advice or a substitute for counsel.
Suggested citations
George, Collin B. Hostile State Asset Denial and Settlement Act. Legislative series LD-2026-02, version 3. Sanctir LLC, 2 October 2026.
George, Collin B. Hostile State Asset Denial and Settlement Act — Version 3: Discussion Draft and Transmittal Memorandum. Sanctir LD-2026-02, 2 October 2026.
George, Collin B. Hostile State Asset Denial and Settlement Act (v3): Anticipated Challenges, Responses, and Probable Outcomes. Sanctir LD-2026-02A, 2 October 2026.
George, Collin B. Hostile State Asset Denial and Settlement Act: Restructuring Options for Confiscation and Use. Sanctir LD-2026-02B, 2 October 2026.