BERLIN – A lawsuit filed in a US Federal court in Manhattan by roughly 1,000
victims of a joint Hezbollah and Iran 1983 attack on US soldiers in Beirut
alleges that Clearstream Banking SA of Luxembourg, which is owned by the
Deutsche Börse AG, illegally transferred $250,000 million of seized Iranian
funds, according to a report in Tuesday’s Wall Street Journal.
Hezbollah,
along with Tehran’s government, killed 241 US servicemen in an attack on the
Marine Corps housing complex, prompting family members to initiate litigation. A
US Federal Judge ruled in 2003 that Iran was responsible for the terror attack
and ordered the Islamic Republic to pay $2.7 billion in compensation to the
family members of the murdered service personnel.
I
ran rejects the
charges of complicity in the single deadliest terror attack on US
soldiers.
According to the Journal article, court documents from 2008
show that “Clearstream and a second financial institution helped Iran move the
money out of accounts at Citigroup Inc.’s Citibank unit in New York after a
federal court had ordered the funds frozen.”
A Judge from the Southern
District of Manhattan court “ordered Citibank in June 2008 to freeze $2.25b. of
Clearstream accounts that were allegedly controlled by Iran,” wrote the
Journal.
The family victims argued that Clearstream furnished improper
information to secure the release of the $250m. A second bank was also involved
in transferring Iranian funds, but the name of that bank has been “redacted”
from the court documents, noted the Journal.
The lawsuit against Deutsch
Börse could throw a wrench in the negotiating process to control the NYSE, in
which the Deutsche Börse seeks to take over NYSE Euronext Inc, which oversees
the New York Stock Exchange. According to the Journal, US lawmakers have raised
the Clearstream controversy as a reason to block the Deutsche Börse’s takeover
attempt.
The Journal cites a question asked by US Congressional
Representative Steve Austria (R.Ohio) to Treasury Secretary Timothy Geithner at
a legislative hearing this year: “Are you concerned that the New York Stock
Exchange is going to be owned by a company that’s allegedly – and I think is –
conducting business with Iran?” The involvement of the Deutsche Börse in
reportedly transferring Iran funds is another blow to Germany’s financial
reputation. The Deutsche Bundesbank — with assistance from Germany’s Foreign
Ministry – circumvented US sanctions earlier this year and funneled at least
$1.5b.
euros to a US sanctioned bank, the European-Iranian trade bank
(EIH), to help pay for Indian crude oil payments owed to Iran.
The US
Treasury Department expressed alarm about Germany’s business relations with the
EIH because the Iranian entity finances illicit nuclear proliferation and
weapons activities.
After considerable US, French and British pressure,
Germany agreed to place the EIH on the EU sanctions list.
The EIH,
however, is still permitted to process previous financial transactions, which
were commenced before the May EU sanctions targeting Iran.
German critics
view Chancellor Angela Merkel’s failure to shut down pre-sanction EIH
transactions as undercutting international efforts to stop Iran’s drive to
obtain nuclear weapons and finance terror groups.
Germany remains Iran’s
largest European trade partner, with an annual 2010 volume of combined export
and import trade reaching over 4b.
euros.
German engineering firms
play a key role in Iran’s infrastructure.
According to the Journal,
Clearstream declined to comment on the US lawsuit. The Deutsch Börse wrote in
its 2010 annual financial disclosure that Clearstream “intends to defend itself
vigorously to the fullest extent.”