The U.S. Justice Department has seized over $2 billion in funds alleged to belong to the government of the Islamic Republic of Iran. The funds were being held by Citigroup on behalf of a private banking firm based in the tiny European nation of Luxembourg.

That firm is named Clearstream Banking S.A.

While Clearstream is being tight-lipped about the case, according to the Wall Street Journal, documents filed in the case indicate that Clearstream denies that the funds originate from Iran and is seeking their return. Luxembourg has some very secretive banking practices, which make the whole issue rather complicated.

Who knows if these funds really do belong to the Iranian government? We shall have to wait and see, but a cursory review of Clearstream’s web site indicates that the company has been involved in sukuk (Shariah Bond) offerings and has a presence in Dubai. None of this is proof that Clearstream is doing business with the Iranian government, but it should be noted that the world’s largest Shariah-Compliant financial institutions are all Iranian government-controlled banks and Dubai is a major trading post through which money and goods have been smuggled into and out of Iran for many, many years. Dubai’s enforcement of international sanctions against Iran have been nothing but a joke.

This is a story worth watching…


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