Opinion ID: 4017397
Heading Depth: 2
Heading Rank: 3

Heading: Sanctions Against Iran

Text: In March 1995—six years after 650 Fifth Ave. Co.’s formation—President Clinton issued a series of Executive Orders pursuant to the International Emergency Economic Powers Act (“IEEPA”), formally declaring the Government of Iran a threat to national security and imposing broad financial sanctions. See Exec. Order No. 12,957, 60 Fed. Reg. 14615 (Mar. 15, 1995); Exec. Order No. 12,959, 60 Fed. Reg. 24757 (May 6, 1995). Those Executive Orders authorized the 22 Secretary of the Treasury, in consultation with the Secretary of State, to promulgate rules and regulations to implement the financial sanctions. Pursuant to that authority, the Treasury Department’s Office of Foreign Assets Control (“OFAC”) determined that Bank Melli was owned or controlled by the Government of Iran, thus subjecting it to, among other things, limitations on the receipt of services from U.S. financial institutions beginning June 6, 1995, except as authorized by an OFAC license. See Implementation of Executive Order No. 12959 With Respect to Iran, 60 Fed. Reg. 40881‐02 (Aug. 10, 1995). OFAC also subsequently promulgated a series of Iranian Transactions Regulations (“ITRs”) relevant to this action, which took effect on August 20, 1997, and which generally prohibit United States entities from conducting business with or providing services to the “Government of Iran.” The “Government of Iran” is defined in the ITRs as “[t]he state and the Government of Iran, as well as any political subdivision, agency, or instrumentality thereof,” “[a]ny person owned or controlled, directly or indirectly, by the foregoing,” and “[a]ny person . . . acting or purporting to act, directly or indirectly, for or on behalf of the foregoing.” 31 C.F.R. § 560.304 (2012); see id. §§ 560.203, 560.204, 560.207, 560.208, 560.301. Alavi and 650 Fifth Ave. Co. are United States entities 23 subject to these orders and regulations and prohibited thereby from conducting business with or providing services to Bank Melli or any other instrumentality owned or controlled by, or acting on behalf of, the Government of Iran.9 V. Bank Melli’s Relationship with 650 Fifth Ave. Co. After 1995 In 1995, after the first of the relevant Executive Orders imposing sanctions on Iran was issued, Bank Melli formally divested its ownership of Assa. Bank Melli’s Harter Holdings shares were acquired by two individuals, Davood Shakeri and Fatemeh Aghamiri. Together, Shakeri and Aghamiri indirectly held 100% of Assa’s shares until 1999, when they directly acquired 100% of Assa’s 100 shares.10 Proffered records indicate that Shakeri and Aghamiri acquired their 9 On January 16, 2016, President Obama issued Executive Order 13,716 in connection with the “Implementation Day” of the Joint Comprehensive Plan of Action (“JCPOA”) related to Iran’s nuclear program. See Exec. Order No. 13,716, 81 Fed. Reg. 3693 (Jan. 16, 2016). The order revoked or amended certain executive orders concerning Iranian sanctions, but kept in place President Clinton’s declaration of a national emergency vis‐ à‐vis Iran two decades ago. Id. Consistent with certain Implementation Day commitments, OFAC has also submitted final rules partially amending the ITRs. See 81 Fed. Reg. 3330 (Jan. 21, 2016) (to be codified at 31 C.F.R. pt. 560). For further discussion of the JCPOA, see Kirschenbaum, et al. v. 650 Fifth Avenue Company and Related Properties (“Kirschenbaum”), 14‐1963 at 22–23. 10 Unauthenticated corporate records from the United Kingdom’s Jersey Island purport to show that from 1996–1998, Shakeri and Aghamiri held 50% interests in Harter Holdings, which owned 98% of Assa Limited’s total shares, and 1% each of Assa Limited’s shares. In 1999, Harter Holdings divested its interests and Shakeri and Aghamiri became 100% direct owners of Assa Limited. Although the admissibility of 24 shares in Harter Holdings and in Assa for £1/share.11 App’x 10319, 10325, 10361. Shakeri and Aghamiri directly held 100% of Assa’s shares until 2008.12 In support of its claim that Bank Melli nevertheless continued to exercise control over Assa after 1995, the Government primarily relied on two categories of evidence: (1) emails from Hassan Dehghani Tafti (“Tafti”), Assa’s sole representative in the United States (“Tafti emails”) and (2) notes purportedly from a 2007 meeting between Alavi’s new President, Farshid Jahedi (“Jahedi”), and Iran’s Ambassador to the United Nations, Mohammad Khazaee (“Khazaee”) (“Khazaee–Jahedi meeting”).
In 2005, Tafti sent three emails to Mohsen Ghadimipour, then head of Bank Melli’s Overseas Network Supervisory Department (“ONSD”). First, in February 2005, Tafti requested, inter alia, that ONSD provide him with “the signature of these records is subject to question for reasons discussed infra at 46–48, on this appeal we assume authentication—and admissibility—will be satisfied on remand. 11 The records show that, as of January 1, 1996, Shakeri and Aghamiri each owned (1) one share of Assa Limited, and that the “[a]mount paid on each share (par value)” was £1, App’x 10319; and (2) 50 shares of Harter Holdings, and that the “amount paid on each share (par value)” for those shares was similarly £1, App’x 10361. When Shakeri and Aghamiri acquired all Assa Limited shares in 1998, the amount paid on each share was again listed as £1. See App’x 10325. The record contains no information regarding the ownership of Assa Limited after 12 2008, when the Government initiated this forfeiture action. 25 the [Assa] share holders, Mrs. Aghamiri and Mr. Shakeri.” App’x 7156. Second, in July 2005, Tafti advised Ghadimipour that the “share holders are forbidden from having residences [in Iran], and as per the view of the legal experts, [the United States] may freeze the capital of the share holders.” App’x 7129. Tafti requested that ONSD make “some arrangement that the residence location of the share holders of Assa, Mr. Davood Shakeri and Mrs. Aghamiri be changed to another country.” App’x 7129. Finally, also in July 2005, Tafti wrote Ghadimipour that “[c]hanging the share holder of Assa Ltd. is possible, but the share holder should reside in a [tax free country]. . . . Otherwise, the country of residence will collect a tax from the income of the share holder.” App’x 7134. The Government argues that these communications show that Assa’s post‐1995 record owners were only fronts for Bank Melli, which continued to control Assa’s holdings in 650 Fifth Ave. Co. The August 2005 response Tafti received is further evidence of Bank Melli’s control: “With reference to the email of 7/7/2005, regarding the location of residence of the shareholders, this is to inform you that, as per the orders of the Bank Manager, until the appointment of the qualified individuals, act as before.” App’x 7143 (emphasis added). Although this email and three others in the record indicate that they were sent by (or, in some, from 26 Tafti to) the “shareholders of Assa,” each bore the same email address— “ONSD_ir@yahoo.com”—used on several of the Ghadimipour emails, see, e.g., App’x 7134, 7143, 7152, 10401, 10404.
In 2007, certain Alavi board members and President Jahedi met with Ambassador Khazaee at the Ambassador’s residence. The record does not indicate the purpose of the meeting, how it was arranged, or what, if any, action was taken as a result of the meeting. The Government nevertheless maintains that two sets of meeting notes support its contention that Khazaee instructed Jahedi with respect to the management of Alavi. The first set of notes, dated October 5, 2007, bears the heading “Board Meeting,” references “Khazaee” and “Jahedi,” and includes, inter alia, the following statements: “[s]hould only allocate to Shiites,” App’x 8720; “ASSA: Daily expenses? Payments? Investment policy?,” App’x 8711, 8721; “The composition of the Board of Trustees = Whatever I decide should be approved and it should not be otherwise,” App’x 8722; and “I have to definitely see the proposed allocations before a final decision is reached. I have to be kept informed and I have to be able to state my opinion in order for you to make a 27 decision,” App’x 8724 (emphasis in original). Although the authorship of these notes is unknown, the Government submits that their content supports an inference that they were taken by Alavi’s President Jahedi and that the speaker referenced therein is Khazaee. The second set of notes is from the journal of Alavi’s secretary, Alireza Ebrahimi (“Ebrahimi”) and references dates that do not match the purported October 2007 meeting: shortly after the heading “Mr. Alireza Ebrahimi’s Journal, Summer 2003” are three other dates, Friday, July 25, Sunday, July 27, and Sunday, August 10. App’x 7109. These notes contain stray statements that may indicate a desire to sell Bank Melli’s share in Assa. One statement reads, “Dr. Kharrazi → Assa share → Sell it,” App’x 7109, and another reads, “Mr. Zarif → Assa → Bank Melli 40% share → I cannot sleep at night → The issue of Board of Trustees will be solved, When? → Transfer,” App’x 7110.