CBI Assets at Deutsche Boerse Come Under US Assault
Economy, Business And Markets

CBI Assets at Deutsche Boerse Come Under US Assault

German exchange operator Deutsche Boerse faces a renewed legal battle in the United States over dealings by its Clearstream subsidiary with the Central Bank of Iran (CBI), US court documents show.
Hundreds of US plaintiffs are seeking access to $1.7 billion in assets belonging to Iran’s central bank, and held by Clearstream, owned by Deutsche Boerse, in Luxembourg, Reuters reported, citing the documents.
The potential tug of war may test the reach of US law in Europe. “This could be a precedent,” said Stephane Ober, who heads the Luxembourg office of law firm Simmons&Simmons.
The plaintiffs are the families of US soldiers who were killed or wounded in the bombing of the marine barracks in Beirut, Lebanon in 1983. A US court ordered Iran to pay $2.65 billion in compensation to the families, who have often hurled baseless charges against Tehran over the attack.
Iran has denied any involvement in the bombing.
In a similar case in late 2013, Clearstream agreed to transfer to the plaintiffs $1.8 billion of CBI’s funds held in a Clearstream account at lender Citigroup in the United States.
The plaintiffs hope they can use US law to force Clearstream in Luxembourg to do the same.
Patrick Rocco, a lawyer for the plaintiffs, said the US Congress made clear when it passed the Terrorism Risk Insurance Act (TRIA) that the law should apply also to assets blocked outside the United States if there was a US connection.
“It was meant to have extraterritorial reach,” Rocco said at a hearing on the case in the New York in September, according to a transcript seen by Reuters on Tuesday.
 Immune in Luxembourg
Gaining access to the Luxembourg-held funds, which were frozen in 2012 as part of European sanctions, will require the plaintiffs to demonstrate a connection to the United States, Simmons&Simmons’ Ober said.
Lawyers have argued that Clearstream has an office in New York and that the Iranian assets are denominated in dollars, with proceeds from the assets arriving in a Clearstream account at lender JP Morgan Chase in New York.
But Clearstream argues that the case should be dismissed, saying the funds in the New York account belonged exclusively to Clearstream and that the US court has no jurisdiction in Luxembourg, the company’s lawyers said in a court statement.
“The sovereign assets targeted by Plaintiffs are in Luxembourg ... and thus are categorically immune from execution under US law,” Clearstream’s lawyers wrote.
Deutsche Boerse and Clearstream declined further comment, Reuters said.
It is now up to US District Judge Katherine Forrest to decide whether to allow the case to proceed.
Legal analysts said they expected the case to last years, a prediction that could disappoint Deutsche Boerse, which had hoped to consign its tussles with US authorities to the past.
In early 2014, the company agreed to a $152 million settlement with the Office of Foreign Assets Control (OFAC), the Treasury office enforcing US sanctions on Iran.
A few months after reaching that agreement, the US Attorney for the Southern District of New York launched a new investigation into the sanctions affair.
Sources close to the company said it had not yet set aside reserves for the latest cases.

Short URL : http://goo.gl/iTByBY

You can also read ...

First Vice President Es'haq Jahangiri on Monday officially...
Exporters and even local traders say they have put everything on hold for now until the dust settles on the new normal.
The foreign exchange market recently went in a frenzy, with...
Jahangiri officially notified the process of repatriation that obligates exporters to return 95% of their currency yields.
When President Hassan Rouhani’s administration decided to...
Gov’t Weighing Impact of Forex Measures on Trade
The government is assessing the effect of unified exchange...
Snapp, Iran’s First Unicorn Startup?
The widely used ride-hailing application Snapp will pursue new...
GM has sought wage concessions from its labor union as well as government funding and incentives to save its remaining three South Korean factories.
General Motors Co’s South Korean unit on Monday said it has...
Iran Business Environment Improves
Iran’s National Business Environment Index improved slightly...
Subsidized Currency for Specified Imports
The head of Management and Planning Organization has presented...