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Federal Court Overturns Ruling To Seize Iran-Linked Skyscraper In Manhattan

U.S. -- A view of the building at 650 Fifth Avenue in New York. File photo

A federal appeals court in the United States has overturned a previous ruling by a lower court that had ordered the seizure of an Iran-linked skyscraper in Manhattan, New York City.

Some 60 percent of this $1 billion skyscraper belongs to the Alavi Foundation, a U.S. based entity, which has been also charged with an accusation of money laundering. The initial 2017 ruling for the seizure of the building charged that Bonyad Alavi violated U.S. sanctions against Iran in 1995 as it was aware that a company named Asa which owned 40 percent of the building was an affiliate of Bank Melli Iran.

The Court of Appeal however said on Friday August 9 that there were several flaws in the initial ruling that allowed the United States government to seize the building.

The Court of Appeal judge argued that the judge in the first court has not observed some "relatively straightforward issues" in the course of hearings and that her decision-making was marked by "errors. "The Judge in the Court of Appeal referred to videos that contained counter-arguments by some previous members of the Alavi Foundation.

Adding that there is no shortcut in legal procedures, the judge ruled that "the case should be reviewed properly in a fair procedure. “Getting to any outcome requires a fair and procedurally adequate process, something that has been lacking in this case. There are no shortcuts in the rule of law," Iran's Press TV quoted Circuit Judge Richard Wesley as saying.

Reuters has characterized the Court of Appeal's ruling as a defeat for the U.S. Department of Justice that hoped to give compensation money out of the sale of the building to the victims of bombings and other attacks attributed to the Islamic Republic of Iran.

The New York Times also described the ruling as "a defeat for the Department of Justice, which went to trial hoping to sell the 36-story building at 650 Fifth Avenue, perhaps for close to $1 billion, and distribute proceeds to victims of bombings and other attacks linked to Iran."

After a similar ruling in 2016, The New York Times also called the ruling "a setback for the victims of attacks linked to Iran," adding that the court "threw out a lower-court ruling that had upheld the government’s move to seize a landmark Manhattan building on charges that it was a front for Iran."

The Prosecutor's Office in New York had previously said that the Alavi Foundation and Asa Company were fronts for the Islamic Republic and have deposited some $40 million of income from the building to the accounts of Bank Melli Iran and the Iranian government.

The Alavi Foundation, formerly known as Pahlavi Foundation, was inaugurated in 1973 in Iran under Shah Mohammad Reza Pahlavi, but was confiscated by the revolutionary government after the 1979 Islamic Revolution in Iran.

The foundation is currently tasked with promoting Iranian and Islamic studies in the United States, however, it also lends financial assistance to schools and free clinics. The foundation currently operates under the aegis of Bonyad Mostazafan [Foundation for the Oppressed] which is one of a dozen financial organizations operating under the office of Iranian Supreme Leader Ayatollah Ali Khamenei.

Iranian news sources characterize the Alavi Foundation as a charity organization.