Iran’s central bank takes legal action against Bahrain

August 3, 2021 - 21:30

TEHRAN — The Central Bank of Iran (CBI) reported on Tuesday it has begun 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 on Monday. 

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 has 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 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.

Therefore, due to the political, biased and discriminatory approach of the government of Bahrain, an investment lawsuit against the Bahraini government under 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 was placed on the agenda of the central bank. 

Relevant legal proceedings began on Monday. 

In a statement on Saturday afternoon Iranian Foreign Ministry spokesman Saeed Khatibzadeh strongly condemned baseless accusations of a Bahraini court against the CBI, saying that the judicial process was flawed. 

In response to the action of the Bahraini High Criminal Court against the CBI and several other banks of Iran and fining them on false charges, Khatibzadeh stated that Iran rejects claims by the Bahraini court. 

The spokesman added, “The judicial process in the courts of Bahrain against the central bank and Iranian individuals and banks is so distorted that we do not have any official and reliable source to know the details of the cases, except for some media sources. Therefore, any announcement in this regard is based on the news published in the media.”

Khatibzadeh emphasized that the general purpose behind such baseless accusations and claims against the central bank, Bank Saderat and Bank Melli and some of the managers of these banks are based on political motives and have no legal value.

According to media reports, Bahrain's High Criminal Court has accused the CBI, along with a number of other Iranian banks and their officials, of being involved in "money laundering" activities.

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

The CBI and the other Iranian banks were handed fines of 1 million Bahraini dinars each, and that confiscation was ordered of laundered funds.
Bahrain’s public prosecutor and state-owned news service claimed that the prosecution was “the largest money laundering case in the history of the kingdom.”