Friday, January 23, 2009

Iceland may take UK to European court over freezing of bank assets

The Icelandic government is examining "all possibilities" of dragging the British government before the European court of human rights over its decision to use anti-terror laws against the bank Landsbanki, it emerged today.

The move, revealed in a statement by the office of Iceland's prime minister, Geir Haarde, follows legal advice that a claim for damages in the UK courts would be unlikely to succeed.

Reykjavik is looking at the European court as an "alternative option" to seek redress over Gordon Brown's decision to use the Anti-Terrorism, Crime and Security Act 2001 to seize assets.

Relations between the countries were strained in October after the Financial Services Authority swooped in to protect British depositors shortly after Iceland's banking sector fell under the weight of bad debts.

Brown at the time branded Iceland's refusal to guarantee British savings in Icelandic banks "totally unacceptable and illegal", and resorted to anti-terrorism powers.

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