By KUNA,
London : A London-based subsidiary of Iran’s largest commercial bank, Bank Melli, failed Wednesday in a High Court bid for the right to continue trading despite EU anti-nuclear sanctions.
Lawyers for Melli Bank Plc had argued that, because it was strictly regulated by the UK Financial Services Authority and legally and functionally distinct from Bank Melli, it should not be prevented from carrying on business by the “catastrophic” effects of the restrictions imposed on its parent.
But two senior judges, sitting at the High Court, in central London, ruled that, because the issue was to be considered by Europe’s Court of First Instance within the next few days, the English court should not take “pre-emptive” action.
The subsidiary and the parent company have both had their European-held assets frozen.
The sanctions, based on UN Security Council measures, were agreed by the EU in June to increase pressure on Tehran to scale back its nuclear ambitions and abandon enrichment of uranium.
Reasons given included that Bank Melli had “facilitated numerous purchases of sensitive materials” for Iranian nuclear and missile programmes.
Melli Bank Plc had sought an interim injunction preventing enforcement of the sanctions in the UK pending a final ruling from the European courts.
The bank had never been involved in facilitating any nuclear development in Iran and was not specifically cited in any UN resolution or designated as being subject to sanction, it was argued.
The sanctions now imposed were disproportionate and amounted to a freezing of assets, without evidence and without limit of time, which was an infringement of EC law.
The British Treasury and Foreign Office maintained that Bank Melli was in reality part of the parent bank, and the sanctions were justified.
The judges said today that Melli Banks’ challenge in the European Court was in exactly the same terms as that launched in the English court.
Since any decision of the English court would ultimately depend on the view taken in Europe, it would be inappropriate to grant an injunction, they added.
The judges said that the purpose of the sanctions was to augment UN resolutions aimed at persuading Iran to end what was seen as proliferation of offensive nuclear activity and comply with the monitoring regime of the International Atomic Energy Agency.
“Freezing the assets of a subsidiary and preventing that subsidiary from trading could be regarded as a powerful lever to persuade Iran to comply with the UN resolution”, they stated.
“To sanction the parent while leaving a UK subsidiary free to trade might be seen as undermining the force and credibility of the sanctions imposed on the parent”, the judges added.