ICJ Rejects Iran's Bid to Release Assets Frozen of $2 billion by US

The International Court of Justice (ICJ) has rejected Iran's legal bid to release about $2 billion owned by the Markazi Bank frozen by the US.

The Associated Press reported that the largest part of the case focused on Bank Markazi and its frozen assets of $1.75 billion in bonds and accumulated interest in a Citibank account in New York.

The court said it did not have jurisdiction based on the 1955 Treaty of Amity because its protections do not extend to central banks.

The highest UN judicial body, based in The Hague, said it did not have jurisdiction to rule on the Iranian claim linked to the Markazi Bank but considered that Washington "violated" the rights of Iranian individuals and companies and must compensate them, according to AFP.

Reuters described the ruling as a "partial victory" for Iran, saying Washington had illegally allowed courts to freeze assets of some Iranian companies and ordered the United States to pay compensation but left the amount to be determined later.

The case before the ICJ was initially brought by Iran against the US in 2016. Tehran alleged Washington breached a 1955 friendship treaty by allowing US courts to freeze the assets of Iranian companies.

The assets should be paid to victims of attacks blamed on Tehran, including the 1983 bombing of a US Marine barracks in Beirut.

Acting legal adviser Rich Visek of the US State Department said the court had "rejected the vast majority of Iran's case," saying it was a "major victory."

Visek stated: "This is a major victory for the United States and victims of Iran's state-sponsored terrorism."

In response, the Iranian Foreign Ministry said that the "verdict... shows once again the legitimacy" of Iran's positions "and the illegal behavior of the United States."

The complex 67-page ruling comes amid escalating tensions between Washington and Tehran, following exchanged attacks between Iranian-backed militants and US forces in Syria last week.

Relations were strained after Russia's use of Iranian drones against Ukraine, and efforts to revive the 2015 nuclear deal between Iran and major world powers stalled.

Shortly after its 2018 withdrawal from the Iran nuclear deal, Washington announced it would formally end the 1955 treaty.

The US Supreme Court ruled that money from Iran's central bank could be used as compensation for the 241 US troops who died in the 1983 bombing that targeted a military base, which was believed to be linked to Tehran.

Iran denies responsibility for the terror attacks alleged by Washington.

The ICJ rulings are binding and not subject to appeal but have no enforcement powers. Countries can resort to the Security Council if another country does not comply with a resolution.

The United States and Iran are among a handful of countries that have previously disregarded its decisions.

Earlier this month, New York District Judge Loretta Preska ordered Iran's central bank and a European intermediary to pay out $1.68 billion to family members of the troops killed in the 1983 car bombing of the US Marine Corps barracks in Lebanon.

Victims and their families won a $2.65 billion judgment against Iran in federal court in 2007 over the attack.

Six years later, they sought to seize bond proceeds allegedly owned by Bank Markazi and processed by Clearstream to satisfy the court judgment partially.

Bank Markazi argued that the lawsuit was not permitted under the Foreign Sovereign Immunity Act (FSIA), which generally protects foreign governments from liability in US courts.

Preska said the 2019 law authorizes US courts to allow the seizure of assets outside the country to satisfy judgments against Iran in terrorism cases, "notwithstanding" other laws such as FSIA that would grant immunity.

A Luxembourg court in 2021 ordered Clearstream not to move the funds until a court in that country recognizes the US ruling. Clearstream has appealed that decision.

Information about frozen Iran assets abroad is conflicting. Some unofficial estimates put it between $100 billion and $120 billion.

The former governor of the Markazi Bank of Iran, Valiollah Seif, said that after the nuclear deal was announced in 2015, the agreement would release $30 billion of Iran's frozen assets.

Iran is currently demanding the release of the frozen funds in South Korean and Japanese banks that were being used to pay for oil imports and the export of goods, and the revenues from the sale of gas and electricity in Iraq.

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