Iran Optimistic on Luxembourg Case Outcome

Iran’s top economic officials have reacted to the news that Iranian assets have been frozen by a Luxembourg court, expressing confidence that the case would end in Iran’s favor.

“We hope the Luxembourgian court will rule in Iran’s favor and we expect nothing else,” Minister of Economic Affairs and Finance Ali Tayyebnia was quoted as saying by IRNA.

Minister of Economic Affairs and Finance Ali Tayyebnia talks to reporters in Tehran on March 8.

On Monday, the New York Times ran a story announcing that a judge in Luxembourg has quietly frozen assets worth $1.6 billion belonging to Iran’s central bank, quoting people familiar with the case.

As reported by the Times, a group of victims of the Sept. 11, 2001, attacks by Al-Qaeda –including estates of people who were killed–brought the first-of-its-kind case against Iran that led to the freezing of assets.

The economy minister noted that it has been customary for CBI to keep a portion of its assets in the form of foreign exchange or bonds and it proceeded by purchasing dollar-denominated bonds during 2002-7 issued in Europe.

“From 2006, a series of problems arose and regulations such as a ban on U-turn transactions for Iran were approved in the US, which put our dollar-denominated funds at risk,” he said.

He added that around November 2007, the Luxembourgian Clearstream–international central securities depository charged with safeguarding the Iranian dollar bonds—warned Iran that it can no longer keep them safe, which prompted the country to sell some $220 million of the bonds.

Tayyebnia added that the country, then led by president Mahmoud Ahmadinejad, had “a window of about sixth months” until June 16, 2008, to transfer these bonds, but failed to do so beyond the aforementioned sum because “market conditions were not agreeable”.

He noted that the country also reckoned that because the assets belong to the central bank and not the government itself, they could not be seized.

Tayyebnia said it was “very odd” for US citizens to turn to a European court to seek assets not within the jurisdiction of their country in the first place. This US move “violates all international rights and aims to appropriate CBI assets that are considered immune throughout the world based on an unsubstantial claim”.

CBI Governor Valiollah Seif echoed the remarks of Tayyebnia, stressing that the Iranian side predicts that claims made by the US will not be validated in the Luxembourgian court.

“With a vote that will be decided on in the near future, the problem will be resolved,” he said. “We have no other assets apart from these dollar bonds that could potentially be endangered.”

Following the article published by the Times, Deputy Foreign Minister for European and American Affairs Majid Takht-Ravanchi said on Tuesday that lawyers with the CBI are currently consulting Luxembourg lawyers “to be able to have access to the funds”.

Ardeshir Fereydouni, the head of CBI’s Legal Department, corroborated this account, saying that in coordination with the Presidential Office for International Law, the bank’s attorneys have presented their defense arguments to recover the assets.