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What Next After ICJ Said US Illegally Froze Iranian Assets?

Updated: Apr 27, 2023

On March 30, judges at the International Court of Justice (ICJ) declared that Washington had improperly permitted courts to freeze the assets of several Iranian enterprises, giving Tehran a partial victory. They also ordered the US to pay compensation, the amount of which will be decided later. The World Court, however, declared that it lacked jurisdiction over $1.75 billion in frozen assets from Iran's Central Bank, dealing a blow to Tehran.

Acting Legal Adviser Rich Visek of the US State Department said in a written statement that the ruling rejected the "vast majority of Iran's case," notably where it concerned the assets of the Central Bank. "This is a major victory for the United States and victims of Iran’s state-sponsored terrorism," Visek added.

In a reaction shared by Iran's Foreign Ministry on its Telegram channel it hailed the decision as "highlighting the legitimacy" of its positions and "expressing the wrongful behavior of the United States."

Tehran first filed the complaint before the ICJ in 2016 against Washington for allegedly violating a friendship agreement from 1955 by permitting US courts to freeze the assets of Iranian companies. The funds were intended to be distributed as compensation to terrorist attack victims. The Islamic Republic disputes that it backs global terrorism. Even before Iran's 1979 Islamic Revolution, a friendship agreement from the 1950s was signed.

In 2018, Washington eventually withdrew from the agreement. However, the ICJ determined that it was in effect at the time that the assets of Iranian business entities and enterprises were frozen. Presiding Judge Krill Georgian stated, "The court has decided the United States violated its commitments under the treaty of amity."

Iran was due compensation, he continued, and the parties had 24 months to come to an agreement on a sum. If they were unable to, the court would begin fresh proceedings to determine the appropriate sum to be paid.

The judges also clarified that because Iran's Central Bank was not a commercial company and was not thus protected, the court had no jurisdiction over the $1.75 billion in assets held by the US.

Here, the US government has still violated international law by approving a Supreme Court decision that permits the use of confiscated assets from Iran's Central Bank to compensate American victims of terrorist acts. It has also undervalued itself.

The current US antics have angered the Iranian Foreign Ministry. Despite the nuclear agreement, the US government withdrew unanimously and hindered international trade with Iran. On paper, the Americans say banks can deal with Iran, but in practise they act in such an Iranophobic manner that no trade can be made.

The US is not devoted to fulfilling its obligation under the nuclear agreement. It obstructs foreign trade with Iran that is permitted by the agreement. Also, for the simple reason that they are unable to, Judge Georgian will not demand that America release Iran's blocked assets. And since there are no American assets in Iran that have been frozen, Tehran cannot respond.

The Iranian government is at a loss as to what to do given that the concept of sovereign immunity generally prevents foreign states from being held responsible for their actions, and that US law expressly forbids taking Central Bank money on top of this. There is no doubt that the US intends to continue hostilities with Iran and seize even more assets in the not-too-distant future.


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