Luxembourg court denies Iran demand to unblock assets

A Luxembourg court on Wednesday denied a demand by Tehran to repatriate $1.6 billion of Iranian assets claimed by the US as compensation for the victims of the September 11, 2001 attacks.

The judge ruled that the assets could remain frozen in the small EU nation for now, awaiting a separate judgment on the details of the case.

In 2012, a New York judge ordered Iran to pay $7 billion in damages to the families and estates of victims from the attacks, arguing that the country had aided Al-Qaeda by allowing the group's members to travel through its territory.

Iran rejects the accusation and refuses to pay the money. Its lawyers had tried to access $1.6 billion of Iranian money frozen in the Clearstream clearing house, a financial company based in Luxembourg.

Billions of dollars in Iranian assets were frozen in the US and Europe as part of efforts to push Tehran into a nuclear deal with world powers, which was finally signed in July 2015.

Some Iranian assets remain frozen despite the deal, in part due to ongoing compensation cases -- not just for the 2001 attacks but also the bombing of a US Marines barracks in Lebanon in 1983 that killed 241 Americans.

"Iran's frozen money in Luxembourg belongs to the period before the (nuclear) negotiations and Iran's (central bank) lawyers are engaged in consultations to obtain it," said deputy foreign minister Majid Takht Ravanchi before the decision.

The US Supreme Court ruled last year that $2.1 billion frozen in a Citibank account in New York should be given to the US victims of the 1983 bombing -- a verdict Iran is contesting at the International Court of Justice.