Happy ending for an Iranian Account held at Clearstream, Luxembourg?

My Orchids. Cattleya "Sheherazade" Photo ET

Happy ending for an Iranian Account of USD 1.6 billion, held at Clearstream, Luxembourg?

In 1983 Iranian backed terrorists blew up a US Marines base in Beirut, killing 241 American servicemen, and injuring many. Of the injured, 13 died in the days after the attack. 58 French soldiers were also killed in a second attack.

Under the “Terrorism Insurance Program established under the Terrorism Risk Insurance Act of 2002”, families of those killed or injured filed civil law suits against Iran. Victims were awarded 2.65 billion from Iran as the sponsor of the attacks carried out by Hezbollah. 

In 2013 already, Clearstream turned over USD 1.8 billion belonging to Iranian Bank Markazi. Another USD 1.6 billion owned by Banca UBAE were the object of this week’s ruling by District Judge Katherine Forrester in New York. Her conclusions were that Clearstream’s 2013 settlement released it from new claims in this matter. She also dismissed three other classical arguments, that would put a case into US jurisdiction: Clearstream has offices in the US, accounts were held in USD, and funds had transited through JP Morgan. Those are indeed top considerations when in administrative sanctions, foreign financial institutions are submitted to US “long-arm” policies. An early example for this would have been in the 1990ies Bank Leu in Luxembourg, convicted of money laundering, though it had no presence in the US, no accounts, but cashed drug related checks in USD, transactions that hit the jurisdiction through correspondent banks.

The victims’ families have vowed to appeal. Based on earlier long-arm strategies, it might be successful. However somehow time is of the essence for them. Under international sanctions against Iran, Clearstream had to freeze the account. At this moment the account remains in Clearstream’s custody. However, this might change in a relatively near future, as the US has deployed vast efforts and possibly concessions to Iranians to achieve an anti-proliferation agreement on its nuclear development program. Lifting sanctions, thereby un-freezing the Iranian foreign accounts could become part of a package deal.