Central Bank of Iran (CBI) governor says Luxembourg has unfrozen 1.6 billion dollars of Iran’s assets despite an attempt by the US to get the funds as compensation.
Abdolnasser Hemmati said on Wednesday, April 8, Tehran thwarted Washington's efforts to seize and transfer the CBI's funds out of Europe.
The money in Luxembourg was frozen as part of international sanctions over Tehran's nuclear program. When in 2016 international sanctions against Iran ended, the sum remained frozen pending litigation.
A Luxembourg court rejected on March 27 a US court request to compensate victims of the September 11 Twin Tower attacks by seizing Iran's assets.
"The rule of the U.S. court used to repeal the immunity of the defendants, namely the Islamic Republic of Iran and the Central Bank of Iran, is not compatible with international law," the court in Luxembourg said.
Hemmati has stopped short of saying whether the released funds were transferred to Iran or not.
Given current U.S. sanctions on Iran’s banking, the funds most probably will remain in Europe and theoretically can be used for medical equipment and humanitarian purchases amid Iran's fight against the new coronavirus.
Currently there are two special mechanisms in place which could be used to perform transactions for food, medicine and medical equipment trade with Iran. A mechanism, dubbed INSTEX, was launched by Britain, France and Germany a year ago and concluded its first transaction, facilitating the export of medical goods on 31 March 2020. Another one is a Swiss initiative that was launched on 30 January 2020 with a first trade for delivery of cancer and organ transplant drugs to Iran worth 2.3 million euros ($2.54m).
Iran is the epicenter of the coronavirus in the Middle East, with 66,220 cases and 4,110 deaths so far. With its economy severely weakened by US sanctions, it has already sought a $5 billion loan from the International Monetary Fund which is its first request for assistance from the lender since 1960s.
Iran has also urged Washington to suspend its sanctions while the virus is sweeping the country. The call, however, has been rebuffed by the Trump administration.