Luxembourg Blocks Transfer of $1.6 Billion Iranian Assets to US

A Luxembourg court has blocked a long-running US request to transfer USD 1.6 billion of dollars in Iranian assets to victims of the September 11 attacks, an official statement said on Monday.

The decision confirmed a claim by Iran''s President Hassan Rouhani who on Sunday said the country had won a legal victory over the assets that had long been frozen on a US request in Luxembourg.

The official statement in Luxembourg said that an appeals court on April 1 found the US seizure demand "inadmissible" since the type of account in question is "unseizable" according to national law.

The money is held in the Clearstream clearing house, a financial company owned by Deutsche Boerse based in Luxembourg.

However, the statement added that the ruling was not final and could be appealed at Luxembourg''s highest court.

In a separate decision, the statement said a Luxembourg district judge on April 3 blocked the transfer of funds and said Clearstream would be subject to a daily fine of 1 million euros (USD 1.09 million) if it moved the money.

An attempt on April 7 by Clearstream to have the transfer ban lifted was refused by the president of the Luxembourg court on procedural grounds.

Tehran and Washington have long been arch enemies and tensions have risen sharply since President Donald Trump in 2018 withdrew from a nuclear accord and reimposed stinging sanctions.

In this separate dispute, a New York court in 2012 ordered Iran to pay USD 7 billion in damages over the September 11 attacks, arguing that it had aided Al-Qaeda by allowing its militants to travel through its territory.

Iran has rejected the accusation and refused to pay the money leading US authorities to demand asset seizures wherever they can.

Rouhani said in a televised cabinet meeting Sunday that "our central bank, our foreign ministry [have] recently won a very good victory in a legal battle".

"USD 1.6 billion of our money was in Luxembourg and the Americans had put their hands on it," he said.

After trying for months, "we succeeded some days ago and freed this money from the Americans'' grasp," he declared. 

Photo: IRNA

Iran Asks IMF for First Loan in Decades to Combat Virus

Iran said on Thursday that it has sought immediate financial assistance from the International Monetary Fund to help it combat one of the world's deadliest coronavirus outbreaks.

According to a tweet by Iran's top diplomat, IMF chief Kristina Georgieva had "stated that countries affected by #COVID19 will be supported via Rapid Financial Instrument (RFI)".

"Our central bank requested access to this facility immediately," Foreign Minister Mohammad Javad Zarif added on his Twitter account.

Iran has not received assistance from the IMF since a "standby credit" issued between 1960 and 1962, according to the fund's data.

Zarif said the IMF and its board "should adhere to fund's mandate, stand on right side of history and act responsibly".

The various loans that can be granted by the IMF must be approved by the institution's executive board, where the United States practically has a veto on decisions.

The United States is currently pursuing a policy of "maximum pressure" aimed at crippling the finances of Iran's government.

In an Instagram post picked up by state news agency IRNA, central bank governor Abdolnasser Hemmati claimed to have formally requested access to RFI by letter on March 6.

"Given the widespread prevalence of coronavirus in our country and the need to continue to take strong measures to prevent and cure (the disease), and to address its economic impact," Iran was asking for "about $5 billion" in assistance, Hemmati wrote on his Instagram account.

Iran on Thursday reported 75 new deaths from COVID-19, the highest single-day toll since the Islamic republic announced the first deaths from the outbreak on February 19.

It took the overall death toll to 429 out of a total of more than 10,000 confirmed cases of infection.

The World Health Organization called for Iran to be given more support in its fight to bring the outbreak under control.

"Iran is doing its best... We are trying to mobilise more support for Iran," WHO chief Tedros Adhanom Ghebreyesus told reporters in Geneva, adding that the country needed more supplies.

According to the IMF's website, the RFI "provides rapid financial assistance, which is available to all member countries facing an urgent balance of payments need."

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Iran Starts New Domestic Bond to Support Manufacturers

By Yasna Haghdoost

Iran has launched a new domestic bond to support manufacturers and non-oil sectors, Central Bank Governor Abdolnaser Hemmati said.

Hemmati said he expects the local bonds, dubbed “Gam,” or “step” in Farsi, will raise 50,000 trillion rials from the first round of issue, the state-run Islamic Republic News Agency reported on Tuesday. That’s equivalent to $11.9 billion, according to the Central Bank of Iran’s official fixed exchange rate, or $3.6 billion on the open, unregulated market.

Four national banks – Melli, Mellat, Tejarat, and Saderat – will use the bonds to finance manufacturing.

“I am confident that the measures taken by the banking system will see growth in the country’s production and economy,” Hemmati said at the launch.

Iran has sought to boost its non-oil sectors after U.S. sanctions drastically reduced crude oil exports.

The loss of revenue from oil exports, Iran’s main source of hard currency, dealt a blow to the currency, fueling inflation and shortages of some imports.'

Photo: IRNA

Trump Announces Sanctions on Iran Central Bank for Saudi Attack

By Saleha Mohsin and Josh Wingrove

The U.S. slapped terror-related sanctions on Iran’s central bank and sovereign wealth fund on Friday in retaliation for last weekend’s attack on Saudi Arabia, moves aimed at squelching any remaining trade the country conducts with Europe and Asia.

“These are the highest sanctions ever imposed,” President Donald Trump told reporters during a meeting with Australian Prime Minister Scott Morrison at the White House. “We’ve never done it at this level.”

Friday’s action sanctions the central bank under a George W. Bush-era executive order designed to disrupt terrorist groups’ financial networks, over what the administration says is the bank’s support for the Islamic Revolutionary Guard Corps. It’s a controversial step, as sanctioning the central bank may also limit the ability to import humanitarian goods into the country.

Proponents such as Mark Dubowitz of the Foundation for Defense of Democracies argue that by linking the central bank to terrorism, the move will scare away remaining market participants and subject companies to potentially devastating secondary sanctions. It may also create a chilling effect even if a Democrat beats Trump in 2020 and seeks to re-enter the Iran nuclear deal that Trump walked away from in 2018.

“It creates a wall of market deterrence,” Dubowitz said in an interview. “When you set aside the technical gobbledygook, what’s left is that if you do business with Iran, you are supporting terrorism.”

The Treasury Department issued a statement saying Iran’s sovereign wealth fund, the National Development Fund of Iran, was also a major source of foreign currency and funding for the IRGC. The move is aimed partly at tying up any NDF money kept in overseas bank accounts.

Trump said he’ll meet Friday with his national security advisers to discuss further responses to the attack on the Saudi oil facilities, which the U.S. has blamed on Iran. He’s under pressure from hawks among congressional Republicans to order a military attack on the Islamic Republic but has resisted, and has drawn comparisons to the Iraq War that he says he opposed.

Trump said a U.S. attack would be the “easiest thing,” adding, “and maybe it’s even a natural instinct.” But he said that he was showing U.S. strength by not immediately ordering a strike. He could take out 15 different targets in Iran if he wanted to, Trump said.

“I could do it right here, in front of you, and that would be it,” he said. “It shows far more strength to do it the way we’re doing it. I think restraint is a good thing.”

More than 80% of Iran’s economy is under U.S. sanctions already, the Trump administration has said, and the U.S. is looking to target sectors that continue to function, such as trade in manufactured goods and transportation equipment. The U.S. is already sanctioning significant sectors including oil, banks and steel, leaving smaller targets including certain exports and government officials.

The U.S. has previously targeted the country’s central bank, sanctioning one of its governors and another senior official in May 2018 for allegedly providing support for terrorist activity. Tensions have steadily risen between the U.S. and Iran since 2018, when Trump abandoned the 2015 accord negotiated by President Barack Obama to curb Tehran’s nuclear weapons program and began re-imposing sanctions relaxed under the deal.

Friday’s action may also complicate plans by European nations to launch a mechanism known as Instex that would serve as a financial go-between for humanitarian trade with Iran. Iran’s counterpart to Instex, the Special Trade and Finance Institute, is closely linked to the Iranian central bank.

The Trump administration argues that there are already carve-outs for humanitarian trade with Iran and Instex isn’t needed. Critics say the new rules will only make that trade more difficult, and regular Iranians will suffer.

“The end result of this shift in policy—whether out of criminal negligence or willful vindictiveness—is likely to be pain for the Iranian people in the form of more medicine shortages for drugs produced in the West and sharply rising prices for food,” Ryan Costello, the policy director at the National Iranian American Council, said in a statement.

Photo: IRNA

Iran Says Efforts to Curb the Rial's Slide Are Starting to Work

By Golnar Motevalli

Iran’s battered currency is starting to recover in the unregulated market as government policies to defend it against U.S. sanctions take effect.

The rial has stabilized, Abdolnaser Hemmati, the head of Iran’s central bank, was cited as saying by the semi-official Iranian Students’ News Agency. It strengthened about 8% in the open market over the past month to 125,450 per dollar, according to prices compiled by Bloomberg from foreign-exchange websites and traders in Tehran.

The advance is a relief for Iranians who watched the currency plummet more than 50% after U.S. President Donald Trump scrapped the 2015 nuclear accord and reimposed sanctions on the nation. The central bank sought ways to protect the currency with measures that include setting up a government-run foreign-exchange platform known as NIMA to quell the black market and controlling interest rates offered by lenders.

The rial on the open market is now close to the NIMA rate, Hemmati said.

“The central bank’s policies of controlling currency markets and bank interest rates appear to be helping,” said Massoud Gholampour, an analyst at Novin Investment Bank in Tehran. “Demand for foreign currency has dropped compared to last year,” he said, adding that bans on a raft of luxury imports helped as much as $2 billion from being spent on imports.

Photo: Wikicommons

Iran to Merge Five Financial Lenders Linked With Military

Iran is combining six local banks as President Hassan Rouhani looks to curb the military’s role in the economy and bolster the country’s financial industry.

State-run Bank Sepah will take over five lenders linked with the security forces—Ansar Bank, Ghavamin Bank, Hekmat Iranian Bank, Mehr Eqtesad and the Kowsar financial credit institution. This is “an important step with a view to maintaining stability and the health of the banking system,” Iran’s central bank said on its website Saturday.

With the economy under strain after the re-imposition of U.S. sanctions, the merger is a step forward for Rouhani in his efforts to reduce the security forces’ footprint. The Revolutionary Guard Corps, a powerful military organization, controls local businesses in industries ranging from energy and telecommunications to infrastructure.

“By consolidating these banks, it becomes easier for the central bank to enforce regulations on investment activities and financial transparency,” said Esfandyar Batmanghelidj, founder of Bourse & Bazaar, a news website that tracks Iran’s economy. It’s “a positive development that reflects the serious debate taking place in Iran about the perils of mixing money and politics.”

The central bank has also been calling for a number of lenders to merge with healthier ones to clean up the industry and help tackle a high ratio of bad loans.

Iran is making less headway on Rouhani’s efforts to implement legislation to counter terrorism funding and money laundering.

The measures are urgently needed to keep Iran off the Paris-based Financial Action Task Force’s blacklist. The European Union said it expected Iran to follow through on its plans when the bloc launched the INSTEX special investment vehicle. INSTEX is a new payments arrangement that the U.K., France and Germany opened on Jan. 31 to help continue trade with Iran without running afoul of U.S. sanctions.

Hardliners in Iran have been mounting a media campaign against the FATF measures, likening them to a capitulation to the West similar to the 2015 nuclear agreement.

Nuclear Deal

Rouhani championed Iran’s negotiations with world powers that culminated in the deal, which lifted some sanctions on the Islamic Republic in return for restrictions on its enrichment program. Domestic critics warned at the time that no good could come from engagement with the US, a view they say was vindicated by President Donald Trump’s decision to withdraw from the accord and reimpose sanctions last year.

On Saturday the Discernment and Expediency Council—a top consultative body that resolves political disputes and is appointed by Supreme Leader Ayatollah Ali Khamenei—said it had failed, for a fourth time, to reach an agreement over whether to approve the FATF legislation. Rouhani is himself a member of the council but wasn’t present at the meeting.

The council said there’s no plan to discuss the issue again until after the end of the Persian new year break in early April, keeping the law in limbo for at least another month, according to the state-run Islamic Republic News Agency.

‘10 or 20 People’

Rouhani has rebuked the council and other unelected legal bodies for holding back policy by monopolizing the decision-making process. According to the president, Khamenei has said repeatedly that he doesn’t oppose the legislation.

“The country can’t be in the hands of 10 or 20 people and then claim that every decision they make is ours,” Rouhani said in a speech last week. “The decision maker in this country is either the government, parliament or the supreme leader.”

Photo Credit: IRNA

US Sanctions Iran for Shipping Oil to Syria

The US slapped fresh sanctions on Iran Tuesday, accusing it of creating a complex web of Russian cut-out companies and Syrian intermediaries to ship oil to Damascus, which in turn bankrolled Hezbollah and Hamas.   

The US considers both Hezbollah, a powerful Lebanese militia, and Hamas, the Palestinian Islamist group that controls the Gaza Strip, to be terrorist organizations.

The US Treasury said in a statement that Tehran, "working with Russian companies, provides millions of barrels of oil to the Syrian government" of President Bashar al-Assad.  

"The Assad regime, in turn, facilitates the movement of hundreds of millions of US dollars to the Islamic Revolutionary Guard Corps-Qods Force for onward transfer to Hamas and Hezbollah," it said.

The new sanctions also target a Syrian national, Mohamed Alchwicki and his Russia-based company, Global Vision Group. He is accused of playing a central role both in the transfer of oil to Syria and the funneling of money to the militant groups. 

The US said his company had illegally received transfers of funds from the Iranian Central Bank via a set of complex transactions.

Intermediary firms involved in the plot to obscure the real destinations of the oil and the money included a subsidiary of the Russian Ministry of Energy, according to the statement.

Secretary of State Mike Pompeo warned on Twitter that there were "grave consequences for anyone shipping oil to Syria, or trying to evade US sanctions on the Islamic Republic's terrorist activities."

He added that Iran's supreme leader Ayatollah Ali Khamenei "should decide if spending the Iranian people's money on the Iranian people is more important than investing schemes to fund Assad, Hezbollah, Hamas and other terrorists." 

Photo Credit: Wikicommons

Europe Support Against US 'Rare Victory' for Iran: Rouhani

President Hassan Rouhani said Saturday that the divisions between the US and Europe over renewed sanctions on Iran were a "rare historical victory" for the Islamic republic.

"If this time last year, we had stated that America would stand against the great nation of Iran... and Europe would stand with Iran and against America, the overwhelming majority of us... would have said that this was pure optimism," Rouhani told lawmakers in a televised address. 

"The political victory of the great nation of Iran over the past months is a rare victory in history."

EU countries have fiercely opposed the decision by US President Donald Trump to abandon their landmark 2015 nuclear deal with Iran and reimpose sanctions—the last of which will return on November 5. 

Rouhani was addressing parliament for a special session to approve four new ministers covering the portfolios of economy, transport, labour and industry.

He acknowledged Iranians were feeling the economic strain, saying: "All of us understand people are suffering and under pressure. People's lives, in particular those on a fixed income, are very difficult."

But he insisted there were sufficient reserves of basic commodities and foreign currency to weather the storm, even after a record-breaking plunge in the rial over the summer and imminent sanctions on its crucial oil industry. 

"We cannot tell our people that because of America's pressure, we cannot do anything. This answer is not acceptable. We cannot tell people that because there are problems with selling our oil, we are unable to manage the country," he said.

He criticized foreign media reports that costs were soaring, despite Iran's own central bank showing food and drink prices had risen 46.5 percent in the year to September. 

"Foreign media lie to people of Iran and say that Iran is the most expensive country people live in," Rouhani said.

Lawmakers later approved the four names put forward by Rouhani: Farhad Dejpasand as economy minister, Mohammad Eslami for transport, Reza Rahmani for industry and Mohammad Shariatmadari for labour. 

The previous economy and labour ministers were impeached by parliament in August, while the other two resigned last week. 

Photo Credit: IRNA

EU Announces Legal Entity to Maintain Business With Iran

The European Union said Monday its members would set up a payment system to allow oil companies and businesses to continue trading with Iran in a bid to evade sanctions after the US withdrew from a nuclear agreement.

Iran and the European Union announced their defiance towards US President Donald Trump's administration after high-level talks at the United Nations among the remaining members of the accord.

The countries said in a statement that they were determined "to protect the freedom of their economic operators to pursue legitimate business with Iran."

With the United States and the dollar dominating so much of global trade, the statement said the new mechanism would "facilitate payments related to Iran's exports (including oil) and imports, which will assist and reassure economic operators pursuing legitimate business with Iran."

EU foreign policy chief Federica Mogherini, speaking at the United Nations 
alongside Iranian Foreign Minister Mohammad Javad Zarif, said the countries 
were still working out the technical details.

"In practical terms, this will mean that EU member states will set up a legal entity to facilitate legitimate financial transactions with Iran and this will allow European companies to continue to trade with Iran in accordance with European Union law and could be open to other partners in the world," she told reporters.

She said that the remaining members of the so-called Joint Comprehensive Plan of Action—Britain, China, France, Germany and Russia—would also maintain their commitments to support Iran on civilian nuclear energy.

"The participants recalled that these initiatives are aimed at preserving the JCPOA, which is in the international interest," she said.

Pressure on Iranian Economy

In line with findings of UN inspectors, Mogherini reiterated that Iran has been in compliance with the nuclear agreement—under which Tehran drastically scaled back its nuclear program in exchange for relief from sanctions.

The agreement was sealed in 2015 in a signature achievement for then US 
president Barack Obama. 

Trump pulled out of the agreement in May, describing it as a "disaster" and quickly moving to reimpose sanctions on Iran.

Despite the protests of the European Union, a number of business including French energy giant Total and carmakers Peugeot and Renault as well as Germany's Siemens and Daimler have already suspended operations in Iran for fear of triggering US sanctions.

With Iran's economy already feeling the pinch, US national security adviser John Bolton earlier Monday vowed to impose "maximum pressure" on Tehran, while insisting that Washington was not pushing for regime change.

US Arab allies Saudi Arabia and the United Arab Emirates as well as Israel have long sought for Washington to work to curtail non-Arab and predominantly Shiite Muslim Iran's influence in the Middle East, including in war-torn Syria.

The EU move comes a day before Trump and Iranian President Hassan Rouhani separately address the UN General Assembly, with the US leader expected to take a hard line on Iran.

Photo Credit: EEAS

Iran Replaces Central Bank Chief as Economy Faces Crisis

Iran replaced its central bank chief on Wednesday, local media reported, amid fallout over banking scandals and the crisis facing the country's economy.

Valiollah Seif, who had served as the bank's governor since President Hassan Rouhani took power in August 2013, was replaced by Abdolnasser Hemmati following a cabinet meeting, according to the official IRNA news agency. 

Hemmati, 61, previously served as head of Central Insurance of Iran, as well as both Sina Bank and Bank Melli. He had been slated to become ambassador to China until he was recalled at the last minute.

Seif has been criticized particularly over his handling of a currency crisis that has seen the rial lose more than half its value against the dollar in the past year. 

An attempt in April to enforce a fixed rate for the rial sparked a boom in black market exchanges, forcing the central bank to backtrack as the currency's street value crashed to record lows in June.

The crisis coincided with Washington's announcement in May that it was pulling out of the 2015 nuclear deal and reimposing full sanctions on Tehran, exacerbating the run on the rial. 

The US also slapped individual sanctions on Seif in May, accusing him of helping Iran's Revolutionary Guard Corps transfer millions of dollars to Lebanon's Hezbollah.

Rouhani thanked Seif for his "strong and serious service", and said the cabinet had "full confidence" in Hemmati. 

He said a key priority was tackling "illegal credit institutions."

Bankruptcies at several unlicensed lenders—which had offered high interest rates and cheap loans with little capital to back them up—wiped out the savings of millions of depositors and has been a key driver of recent protests.

Rouhani vowed to crackdown on unlicensed banks when he came to power. 

His government has been pressured to repay lost deposits, further straining government resources. 

Photo Credit: IRNA