Luxembourg blocks US bid for $1.6 billion 9/11 compensation from Iran

Iran celebrated a legal victory after a court ruled Washington's demand was 'inadmissible'

Iranian President Hassan Rouhani chairing a Cabinet session in the capital, Tehran. Iranian Presidency via AFP

A Luxembourg court has blocked a long-running US request to transfer $1.6 billion (Dh5.88bn) in Iranian assets to victims of the 9/11 attacks, an official statement said late 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 Washington's 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 and 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 €1m (Dh4m) 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 US 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 $7bn in damages over the 9/11 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 the US authorities to demand asset seizures wherever they can.

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

"$1.6bn 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 said.