The U.S. Jurisdiction Over Transfers of U.S. Dollars Between Foreigners and Over Ownership of U.S. Dollar Accounts in Foreign Bans

Abstract

For a long time, the blocking or freeze of U.S. dollar transfers, including transfers taking place outside the United States, has been an important tool of U.S. foreign policy. After the attack on the United States on September 11, 2001, the U.S. government raised the issue of international terrorism and its financial aspects to a level of primary concern for the international community. The U.S. government has adopted a series of controls on domestic and foreign banking and other financial institutions that might facilitate or assist designated terrorist groups. To prevent the funding of terrorist activities, the United States not only may order the freeze of U.S. dollar transfers but also the seizure of dollar accounts that are maintained by foreign banks outside the United States. These measures against foreign transfers and foreign accounts have a great impact because fifty-five to seventy percent of all U.S. dollars are held abroad. This Article examines the legal basis for the jurisdiction of the United States over U.S. dollar assets that are either transferred through the international payment system or deposited at banks outside the United States.