Iran’s Beef Over US Asset Seizure Advanced by UN Court

Judges enter as the delegations of Iran, front row left, and the U.S., front row rear right, stand up, at the International Court of Justice, or World Court, in The Hague, Netherlands, Wednesday, Feb. 13, 2019. The court is scheduled to deliver its judgement on U.S. objections about the court’s jurisdiction in the case. (AP Photo/Peter Dejong). (AP Photo/Peter Dejong)

THE HAGUE, Netherlands (CN) – The International Court of Justice ruled Wednesday it has jurisdiction to entertain most of Iran’s claims the United States violated a decades-old treaty in seizing $2 billion in assets from state-owned entities.

Iran sued the United States in the international court in 2016, claiming the U.S. violated parts of a 1955 treaty by seizing Iranian assets held by Bank Markazi and other state-owned companies to compensate victims of the 1983 bombing in Beirut, Lebanon, and other attacks linked to Iran.

The seizure by the United States came after the 2016 U.S. Supreme Court case Bank Markazi v. Peterson, in which the justices in a 6-2 ruling upheld congressional authority to change a law for the sole purpose of enforcing the judgment won by the terror victims in that single case.

The Hague-based international court held hearings in the case this past October after the United States challenged its jurisdiction and the admissibility of Iran’s claims.

In its ruling Wednesday, the international court unanimously rejected U.S. argument that Iran’s suit falls outside the scope 1955 Treaty of Amity because it is a national security interest to the United States.

Despite frosty relations between the two countries, both remain parties to the 1955 Treaty of Amity, Economic Relations, and Consular Relations between Iran and the United States. The treaty stems from a U.S.-U.K.-backed coup in 1953, after which Iran and the U.S. sought to repair relations. Signed by President Dwight Eisenhower and Iranian prime minister Hossein Ala’, the agreement sought to encourage friendlier relations between the nations as well investment and trade.

The international court did agree, 11-4, that it has no jurisdiction to decide Iran’s claim of state immunity because such a claim falls outside the scope of the Treaty of Amity.

As for the United States’ argument that Bank Markazi is not protected under the terms of the treaty because it is state-controlled and not private, the international court found it did not have enough information to make a ruling but said the question raised does not bar its jurisdiction in the case.

The court also unanimously rejected admissibility arguments brought by the U.S., including the points that it had unilaterally withdrawn from the treaty in 2018 and Iran has unclean hands as an ongoing sponsor of terrorism. For the latter point, the court found that even if the United States can prove its claims it would not be enough to make Iran’s suit inadmissible.

While the case now proceeds on the merits, it could be months or even years before it is resolved.

This isn’t the first visit by Iran and the United States to the International Court of Justice. The U.S. prevailed in its claims against Iran over the Iran hostage crisis, as well as in Iran’s case over the 1987 attack on Iranian oil platforms in the Persian Gulf – although the court did rule that attack was unjustified. Iran also sued the United States for the downing of Iran Air Flight 655, but the case was eventually settled out of court.

 Iran also sued the United States in 2018, after President Donald Trump abruptly pulled out of the multinational 2015 nuclear deal. According to Iran, the renewed sanctions by the United States were an attempt to strangle the Iranian economy.

In October 2018, the international court agreed and found the sanctions violated the treaty. While the decision is final and cannot be appealed, the United States has kept the sanctions in place and then some, imposing another round of restrictions in November 2018 on Iran’s ability to sell oil and its shipping and energy sectors.

Iran sued the United States in the international court in 2016, claiming the U.S. violated parts of a 1955 treaty by seizing Iranian assets held by Bank Markazi and other state-owned companies to compensate victims of the 1983 bombing in Beirut, Lebanon, and other attacks linked to Iran. The seizure by the United States came after the 2016 U.S. Supreme Court case Bank Markazi v. Peterson, in which the justices in a 6-2 ruling upheld congressional authority to change a law for the sole purpose of enforcing the judgment won by the terror victims in that single case.

The Hague-based international court held hearings in the case this past October after the United States challenged its jurisdiction and the admissibility of Iran’s claims.

In its ruling Wednesday, the international court unanimously rejected U.S. argument that Iran’s suit falls outside the scope 1955 Treaty of Amity because it is a national security interest to the United States.

As for the United States’ argument that Bank Markazi is not protected under the terms of the treaty because it is state-controlled and not private, the international court found it did not have enough information to make a ruling but said the question raised does not bar its jurisdiction in the case.

The court also unanimously rejected admissibility arguments brought by the U.S., including the points that it had unilaterally withdrawn from the treaty in 2018 and Iran has unclean hands as an ongoing sponsor of terrorism. For the latter point, the court found that even if the United States can prove its claims it would not be enough to make Iran’s suit inadmissible.

While the case now proceeds on the merits, it could be months or even years before it is resolved.

This isn’t the first visit by Iran and the United States to the International Court of Justice. The U.S. prevailed in its claims against Iran over the Iran hostage crisis, as well as in Iran’s case over the 1987 attack on Iranian oil platforms in the Persian Gulf – although the court did rule that attack was unjustified. Iran also sued the United States for the downing of Iran Air Flight 655, but the case was eventually settled out of court.

 Iran also sued the United States in 2018, after President Donald Trump abruptly pulled out of the multinational 2015 nuclear deal. According to Iran, the renewed sanctions by the United States were an attempt to strangle the Iranian economy.

In October 2018, the international court agreed and found the sanctions violated the treaty. While the decision is final and cannot be appealed, the United States has kept the sanctions in place and then some, imposing another round of restrictions in November 2018 on Iran’s ability to sell oil and its shipping and energy sectors.

Molly Quell is a Courthouse News reporter based in the Netherlands.

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