Business And Markets

Iran's CB Averts US Bid to Seize Its Assets Locked in Luxembourg

Iran's CB Averts US Bid to Seize Its Assets Locked in Luxembourg
Iran's CB Averts US Bid to Seize Its Assets Locked in Luxembourg

The Central Bank of Iran said it legal efforts prevented a Luxemburg court order to transfer its forex assets to the United States.
In a statement on its website, the CBI said a Luxembourg court ruled that Iranian funds locked in the European country cannot be transferred overseas without approval from its judicial authorities.
Based on the ruling, Luxemburg courts do not recognize verdicts issued by the US legal system.  It was referring to a recent piece of legislation that allows American courts to call for seizing Iran’s assets anywhere in the world.
It also obliges third countries to transfer assets owned directly or indirectly by the Iranian government to the US -- a law the CBI said explicitly is in breach of the sovereignty of nations.
“Acting in a timely manner, the CBI secured a Luxembourg court order to prevent transfer of its assets with Clearstream to the US”, the CBI said, referring to a securities depository owned by the German Deutsche Boerse based in Luxembourg.
The German stock exchange operator said earlier the US creditors were seeking to seize $1.6 billion in CBI assets. They had filed a suit in a New York court requiring Clearstream to surrender assets that belong to the central bank. The clearing house found the claims to be unfounded and would fight it in court.
The court in Luxemburg reiterated that any enforcement of a ruling issued by foreign courts must first be recognized by the domestic courts to be enforceable.
 “The ruling explicitly prevents Clearstream from arbitrarily complying with the US court’s decisions to transfer CBI assets to the United States. In case of violation the company will face heavy penalties,” the CBI said.
Success in this case, the CBI said, was thanks to the cooperation of the office of the Vice President for Legal Affairs that had “helped avoid seizure of its assets in Italy and France in the past.”“  
Iranian assets held by Clearstream have been a source of controversy for years. The money is claimed by US victims of the 9/11 al Qaeda attacks and are the basis of an extended investigation of Clearstream by US authorities for alleged sanction violations.
In April 2020, a Luxembourg court said $1.6 billion held by Clearstream would not be transferred to the 9/11 victims, saying the seizure demand was inadmissible under national law. However, Iran could also not claim the money as legal procedures were and still are ongoing.
This year a New York court accused Iran of providing “material support and resources to al Qaeda for acts of terrorism”. The militant group hijacked commercial planes to attack targets in New York and Washington in 2001.
That court awarded the plaintiffs damages worth over $7 billion. Families of victims are seeking access to $1.6 billion of Iranian funds in Luxembourg that were frozen as part of the US sanctions, Reuters reported.  Iran has denied any links to al Qaeda or any involvement in the deadly Sept. 11 attacks that killed more than 3,000 people.

Add new comment

Read our comment policy before posting your viewpoints