Iran's Central Bank: We Will Appeal Luxembourg Court Ruling

Four days after the Islamic Republic of Iran's request to annul a ruling for compensation to the families of American victims was rejected by a Luxembourg court, the Central Bank of Iran announced it would appeal the matter in "higher authorities". A judge in a Luxembourg court rejected the Islamic Republic's request on April 2 to annul the compensation claim from the families of the victims of the September 11 attacks from Iran's $1.6 billion assets that are blocked in that country. However, the Central Bank of Iran announced on Sunday, April 6, that the recent Luxembourg court decision "does not mean the enforcement of the American court ruling" and that "the mentioned seizure only has a formal and preliminary aspect". The statement emphasized that there are "multiple options under Luxembourg laws such as appeals and higher court challenges" that the Central Bank will "make maximum use of". According to the Central Bank of Iran, these documents have been effectively seized for years due to sanctions, and there has been no possibility for their transfer. About six years ago, a court in New York ruled that "the Islamic Republic of Iran assisted certain members of Al-Qaeda and allowed them to cross its territory", ordering Iran to pay $7 billion in compensation to the families of the September 11 victims. On March 7, 2017, informed sources told the New York Times that in connection with this "compensation", a judge in Luxembourg had quietly issued a ruling to seize $1.6 billion of the Central Bank of Iran's assets in Europe. This Iranian asset, held by a Luxembourg currency transfer company called "Clearstream", was blocked due to international sanctions against Tehran's nuclear activities and theoretically should have been returned to Iran upon the lifting of sanctions in January 2016. In recent weeks, Iran has attempted to challenge this judicial ruling through legal actions in Luxembourg. However, the Luxembourg judge stated that a detailed analysis of how Clearstream operates is needed to decide whether to release or keep Iran's assets blocked, which is beyond his jurisdiction. Meanwhile, two legal processes are underway regarding whether American court rulings are enforceable in Luxembourg, and it is unclear when their results will be determined. Last year, after $2 billion of Iranian assets were seized in the U.S., Tehran officially complained to the International Court of Justice against the United States, and the government’s website published a picture of this complaint on June 17, 2016, stating that American courts had issued $56 billion in rulings against Iran "on the grounds of participation in terrorist activities outside U.S. territory". On March 9, 2017, Valiollah Seif, the head of the Central Bank of Iran, announced that this complaint includes assets belonging to this bank in Luxembourg and all assets that "have been threatened by the U.S. government in violation of international law". In this context, the Central Bank of Iran stated in its Sunday announcement that the "illegal reasons" for the seizure of Iranian assets on the grounds of Tehran's participation in "terrorist activities" have been outlined in the complaint registered with the International Court of Justice. The head of the Central Bank and the Minister of Economy of Iran had previously accused the government of Mahmoud Ahmadinejad, the former president, of having six months to transfer $1.6 billion of Iranian assets in Luxembourg but failing to take action. This accusation was reiterated in the Central Bank's statement on Sunday. Efforts to reduce the dollar's share in Iran's assets The Central Bank of Iran also announced on Sunday that it is trying to gradually reduce the share of the U.S. dollar in its asset portfolio. According to this statement, the Islamic Republic of Iran had previously decided to take this action, but due to receiving oil revenues in U.S. dollars, it has not been possible to abruptly cut this process. Previously, officials from Mahmoud Ahmadinejad's government had stated that Iran would remove the dollar and euro currencies from its foreign trade basket and instead use the rial and currencies of countries willing to trade with Iran. However, many experts have deemed this claim impractical, stating that "in the history of global oil transactions, the only currency that has been traded is the dollar."