Prize Courts Revived for Iran Seizures

Hey everybody. Peter Zeihan here. Coming to you from above. Barney Lake in the Hoover National Wilderness. Today, I want to talk about something that I saw in the news while I was on the plane to this trip, and that’s that the Trump administration is in the process of setting up a prize court, which is kind of cool. Prize court basically makes legal rulings on products that are seized by the US military, sold on behalf of the US government, and the proceeds go to the Treasury. And basically, they are getting ready to go after every aspect of Iran’s shadow fleet. And I find this fascinating. 

Okay, a couple things to keep in mind. Number one, a lot of people are going to say that. Why didn’t they do this earlier? Is this because the Trump administration is incompetent? Let’s put the incompetent thing to the side. On this issue, I’m going to side with the Trump administration. No one’s done this in a long time. Prize courts were set up. God. Maybe 1800s. The last time the US used them was in World War two against Japan and Germany. And really, the last time was really used was in the Spanish-American War, specifically the operations around in the Caribbean, around Cuba and Puerto Rico. So, there’s no one alive today who did any of the case law. So while the laws have been on the books for well over century, there’s no one with practical experience. 

So to make this work, you need three things. Number one, you need a military that has changed its training a little bit so it can land on ships in the open ocean, seize them, and then sail them somewhere else. That’s a lot harder than it sounds. Number two, you need a port that you can go to unload the cargo. And as we saw in the Indian Ocean, when the Trump administration grabbed a couple Iranian tankers, they kind of just sat there for two weeks because the order had been given from the top. But the military didn’t know what to do with these things. And the Indians were like, you know what? If you’re going to just start seizing things, you might seize hours so you can’t come here. Third, you need that court. You need a legal ruling to say that this is cargo that has been legally seized under U.S. law, so it can then be sold to someone else. And in the case of oil, that means you have to go to a port with a refinery. 

So this court, this prize court system is being set up in the Southern District, which includes Houston, because Houston is one of the world’s great petrochemical hubs. Now, there are a couple of things that you should probably be aware of. Number one, according to the law that was passed in the 1800s. You have to be at war. Not only has Congress not declared war on Iran, but the Trump administration, despite six months of hostilities, still hasn’t gone to Congress even for a temporary authorization. So a defendant could say you’re not at war. Therefore, prize court law doesn’t apply. Perfectly reasonable argument that they would probably carry the day. But number two, that argument will probably not be made because these are shadow vessels ultimately owned by the Iranians. And so the Iranians are not going to show up in a Houston court and submit to American jurisdiction because they be arrested on site. So basically, the US government will be arguing to an empty chair, and the judges will be like, well, you know, this is a little wobbly, but no one is standing up for the defense. So rule for the plaintiff. 

So this could mean that the rest of this year is going to get really interesting. And the only real loophole is Congress, for the reasons I’ve mentioned before. And the fact that it’s been six months still hasn’t gone to Congress. Anyway, that’s it for me. I’ll see you guys at the next lake, bye.