The European Union has been tightening its grip on the criminal laws of the member states. Article 31 of the Treaty on European Union introduced the framework decision as the appropriate instrument to harmonize criminal law. In this way, member states may be required to adopt minimum levels of criminal definitions and sanctions. This is a matter of ‘third pillar’ law. The case under scrutiny, however, is a perfect illustration of the delicate relationship between EU first pillar law and domestic criminal law.

Plaintiffs, Sperry Corp. and Sperry World Trade Inc. (Sperry), received an award from the Iran-United States Claims Tribunal (Tribunal). Upon payment of the award, the United States deducted 2 percent of the total amount pursuant to a directive license issued by the Secretary of the Treasury regarding recovered claims by U.S. nationals against Iran. When plaintiffs challenged the authority of the Treasury to make the deduction and the United States Claims Court announced a preliminary ruling that concurred with plaintiffs’ position, the Executive persuaded Congress to approve legislation authorizing specified percentages to be deducted by the United States from Tribunal awards to U.S. citizens. Responding to the plaintiffs’ challenge to the constitutionality of the newly enacted statute, the United States Claims Court dismissed the suit and, on appeal, the United States Court of Appeals for the Federal Circuit (per Meyer, J.) reversed and held: that the deduction constitutes a taking without compensation in violation of the Fifth Amendment to the United States Constitution. In September 1988, the United States filed notice of appeal with the Supreme Court.