Background and Complexities of the U.S. Supreme Court Ruling on Central Bank Assets

Since the U.S. Supreme Court announced its ruling allowing compensation to the families of victims of terrorist attacks from the assets of the Central Bank of Iran, Tehran has repeatedly stated that it does not recognize this ruling and considers the use of the Central Bank's assets as theft of Iranian property. This issue has also become a pretext for current and former government officials in Iran to accuse each other of wrongful and illegal actions. But what is the background of this case and its complexities within the U.S. judicial system? The plaintiffs, who have received a favorable ruling from the U.S. Supreme Court, number around one thousand and are connected to victims of attacks that Iran is accused of being involved in. These individuals have opened dozens of cases against the Iranian government in local U.S. courts, and in the absence of Iran, which does not recognize these courts, the court has ruled in favor of the plaintiffs. Most of these cases relate to compensation claims from Iran by those who or whose families were affected by the bombing of the U.S. military headquarters in Beirut in 1983. After the court ruled in multiple cases in favor of the plaintiffs, Iran was ordered to pay several billion dollars in damages. According to the text of the U.S. Supreme Court ruling, the plaintiffs, who initially registered their cases in the District of Columbia (Washington D.C.), transferred these cases to the Southern District of New York and, after learning of the existence of Central Bank assets at Citibank, requested that $1.075 billion of this bank's assets be awarded to them as compensation. In 2008, Iran attempted to preserve the Central Bank's assets. These assets were under the control of a financial foundation called Clearstream, which acts as an intermediary between financial institutions worldwide, and were held at Citibank. This relationship has reportedly been ongoing since 2003. The interest on this deposit was paid to the Central Bank by Clearstream. In 2008, the Central Bank of Iran requested Clearstream to designate an Italian bank named UBAE as an intermediary, so that the interest would be transferred to the Central Bank through this Italian bank. 2008 was also the year a court in New York ruled to seize the Central Bank's bonds. Given this timing, in recent days, officials from Hassan Rouhani's government have pointed fingers at Mahmoud Ahmadinejad's government, claiming they failed to take timely action to transfer this money from Citibank in the U.S. The Presidential Order 13599 provides a new backing for the plaintiffs. Although the execution of court rulings began before 2012, with the issuance of Presidential Order 13599, which mandated the blocking of Iranian assets and financial institutions, the plaintiffs updated their court request and submitted it with the legal backing of Order 13599, which also included the Central Bank of Iran and its assets. Although the Central Bank and the Iranian government claim that this bank is independent from the Islamic Republic government based on Iranian laws, and for this reason, the bank sought to defend itself in court against the usual government practice in the U.S. and requested a review of the Supreme Court ruling. Now that the final ruling of the U.S. Supreme Court states that compensation for the families of the victims of terrorist attacks must be paid from the seized assets of the Central Bank, the Iranian Foreign Minister states that Tehran has conveyed its objections to his American counterpart and that a committee has been formed to investigate how, contrary to previous warnings, Iranian money has been invested in the U.S. or in places accessible to the U.S. Mohammad Javad Zarif states that this committee will also examine ways to prevent the recurrence of this issue and how to stop the execution of the issued ruling.