A long-simmering issue came to a boil once again Thursday when Iran’s central bank filed suit against Deutsche Börse’s Clearstream unit in Luxembourg, seeking the return of $4.9 billion (€4 billion) in securities it claims is being held by the post-trade services firm.
The Iranian assets held by Clearstream have been a source of controversy for years. They have been claimed by US victims of Iranian terrorism and are the basis of a long-term investigation of Clearstream by US authorities for sanction violations.
Deutsche Börse rejected the claim as being without merit and said Clearstream would take all appropriate measures to “vigorously” contest it. In fact, some $1.9 billion of the claimed assets are no longer in custody because in accordance with a 2013 US court order they were paid out to the survivors and victims’ families of the 1983 attack on a US Marine base in Lebanon, which killed 214 and was blamed on Iran.
A further $2 billion of the assets still held at Clearstream have been frozen due to litigation in the US and Luxembourg regarding other claims against Iran.
Clearstream is once again caught between a rock and a hard place.
The suit from Bank Marhazi also named the UBAE bank in Rome, an Italian-Arab venture with links to Libya, as a defendant. The Iranian bank is seeking the assets plus interest, or damages in the same amount.
Clearstream is once again caught between a rock and a hard place. US authorities will certainly be keeping a close eye on its response to the suit. The Office of Foreign Assets Control (OFAC) in the US Treasury Department fined Clearstream $152 million in 2014 for sanctions violations in connection with the Iranian assets. The Luxembourg unit was accused of simply transferring Iranian assets to other European venues after US accounts were shut down in 2007 and 2008, giving Iran access to them.
Shortly thereafter a federal court in New York opened an investigation of Clearstream for other sanctions violations that is still going on. Clearstream has said it is cooperating fully with the US prosecutors.
The newest uproar comes amid the drastic worsening of relations between the United States and Iran as President Donald Trump openly questions the validity of the nuclear deal with Iran and seeks tougher terms.
Andreas Kröner covers financial services for Handelsblatt in Frankfurt. The story was adapted into English by Darrell Delamaide, a Handelsblatt Global editor in Washington, DC. To contact the author: [email protected].