Bahrain sentenced to unfreeze Iranian assets, pay $240 million in fine

November 24, 2021 - 17:11

TEHRAN — In an exclusive interview with the Tehran Times on Wednesday, Abbas Honarmand, the deputy director of communications and information at the presidential office, said that an international arbitral tribunal has unanimously ordered Bahrain to pay compensation to Bank Saderat and Bank Melli Iran for the expropriation of their investment in Future Bank in violation of international law.

The tribunal has also ruled that the move was politically driven, Honarmand added.

He said that according to the verdict, Bahrain must release $1.7 billion, as well as $240 million as a fine, along with litigation costs and the fund’s interest before and after the litigation.

Bahrain had frozen $1.7 billion of Iranian money in Manama. With this verdict, they have to unfreeze the Iranian fund.

Bahrain's High Criminal Court had accused the Central Bank of Iran, along with a number of other Iranian banks and their officials, of being involved in "money laundering" activities.

The Bahraini public prosecutor had sentenced the defendants to various terms of imprisonment as well as financial punishment.

The CBI reported on August 3 that it began legal procedures to pursue action against baseless charges of the Bahraini High Criminal Court.

The central bank, based on the agreement on encouragement and mutual support of investment between the government of the Islamic Republic of Iran and the government of the Kingdom of Bahrain approved on 2003, began its legal action against the government of Bahrain to repay funds invested in banks in that country.

According to the central bank, based on the country's monetary and banking law, managing the country's foreign exchange reserves is one of the duties of the central bank, and this bank had been investing in the banks of Bahrain.

But since the signing of the JCPOA agreement, which prompted some Persian Gulf states to oppose the agreement, then officials of the bank, while anticipating the prospects of political relations, withdrew significant amounts of their investment deposits from Bahrain, but after severing diplomatic relations with the Bahraini government in January 2015, Bahraini banks avoided reimbursing the remaining foreign exchange reserves of this bank and stopped cooperation.

Despite numerous correspondences and follow-ups, they even blocked the use of the mentioned assets to pay for Hajj pilgrimage and humanitarian affairs including releasing money to control the coronavirus pandemic.

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