Bank of Tokyo-Mitsubishi UFJ has suspended settlement of Iran-related transactions in response to a U.S. court order, sources said Thursday.
The federal district court in New York ordered the core unit of Mitsubishi UFJ Financial Group Inc. to disclose assets it holds on behalf of Iran’s government and central bank, and freeze up to $2.6 billion worth, the sources said.
The court’s move was aimed at securing funds for damages the Iranian government has been ordered to pay in a civil suit filed by the families of victims of the 1983 suicide bombing of a U.S. Marines barracks in Beirut. The plaintiffs allege Teheran played a role in the terrorist attack in the Lebanese capital.
Before making its final reply to the asset freeze order as demanded by the court, BTMU will keep the fund settlement freeze in place for the time being while consulting with the Financial Services Agency and other authorities, the sources said.
A prolonged suspension could have a major impact on Japan’s procurement of crude oil because BTMU settles a large portion of the nation’s oil import deals, whose total value reaches ¥1 trillion a year, analysts said.
The U.S. government froze Iranian assets held by U.S. banks in February to put pressure on the country over its nuclear ambitions.
A month later, the White House decided to impose sanctions on foreign financial institutions having transactions with the Iranian central bank.
Japanese banks escaped the sanctions, as the government vowed to cut Iranian crude oil imports further. But the New York court issued the order separately from the sanctions.
On Thursday, a bank spokesman said it has lodged a complaint against the order with the U.S. court.