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                                        Volume. 12112

Iran’s central bank to file suit in U.S. court to unfreeze funds
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Iran’s central bank is preparing to file a motion in a New York federal court to release nearly $2 billion of its frozen funds at Citigroup Inc.’s Citibank unit, lawyers for the bank told the Wall Street Journal.

The assets were frozen in 2008, the Journal reported, after a group of 1,000 victims of international terrorism sought the money as partial payment for a $2.7 billion judgement made against Tehran for its alleged role in the 1983 bombing of a Marine Corps barracks in Beirut that killed 241.

Luxembourg-based Clearstream Banking SA deposited the money in Citibank. Attorneys for Bank Markazi, as the Iranian central bank is called, are going to argue that it’s illegal under U.S. law to freeze the assets, the Journal reported, saying the lawyers cite the Foreign Sovereign Immunities Act as a safeguard from seizure by litigants of the U.S. holdings of any foreign central bank.

“Bank Markazi will show that its property is immune from seizure,” David Lindsey of Chaffetz Lindsey LLP, the law firm representing the Iranian central bank, told the Journal.

Lawyers for the terrorism victims say new U.S. legislation that imposes sanctions on Bank Markazi will strengthen their case for claiming the funds, the Journal reported.

The legislation, a provision of a national defense authorization bill, is expected to be signed into law by President Barack Obama in the coming days.

The Obama administration had been considering for weeks whether to impose sanctions on Bank Markazi but hadn’t done so yet because it came with the risk of causing a spike in crude prices, handing an unwitting windfall to Tehran, and because it could alienate the youth of Iran who are believed to approve of the U.S.

(Source: WSJ)


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