The move stems from a U.S. court decision in 2007 that ordered Iran to pay more than $2.6 billion to survivors and victims' family members of the 1983 bombing of a U.S. Marine barracks in Lebanon, a bank spokesman said.

The bank filed an objection to the court ruling on Wednesday, another spokesman said.

Among Japan's three biggest banks only Tokyo-Mitsubishi UFJ received the order, banking sources in Tokyo said on Thursday. Tokyo-Mitsubishi UFJ was targeted because it accounts for almost all Iranian assets handled by Japanese banks, they said.

Banking sources said the rest of the trade was handled by Sumitomo Mitsui Banking Corp (8316.T).

The banking unit of Mitsubishi UFJ Financial Group (8306.T) did not comment on the amount of assets it has frozen. A spokeswoman at rival Mizuho Financial Group (8411.T) said the bank had not received a freezing order.

Although the court case is unrelated, the development comes as western governments are imposing further sanctions on Iran to stop the country from pursuing what they say is a nuclear weapons program, a claim the Islamic republic denies.

An EU ban on importing Iranian oil, which takes effect on July 1, will also prevent European insurers and reinsurers from covering tankers carrying its crude anywhere in the world.

Sanctions imposed by the United States earlier and the measures being introduced by the EU have cut oil shipments to Japan, one of the biggest buyers of crude from the Islamic republic.

The move against Bank of Tokyo-Mitsubishi UFJ has not affected payments for Iranian oil, Japan's top oil refiner, JX Nippon Oil & Energy Corp. said on Thursday.

There have been hundreds of billions of dollars in default judgments against Iran levied by U.S. courts in favor of Americans, and in most cases Iran has ignored the legal proceedings in the United States.

This case was brought by relatives and survivors of the 1983 attack on a barracks in Beirut housing U.S. and French members of a multinational peacekeeping force.

A judge in Washington ruled in 2007 that Tehran had provided financial and logistical support to the militant group Hezbollah in carrying out the suicide bombing that killed 241 soldiers.

The U.S. Senate will consider new Iran sanctions on Thursday with the chamber's Democratic leader, Harry Reid, set to seek approval of a new package of oil and economic sanctions aimed at further pressuring Iran to abandon its nuclear program, a Democratic leadership aide told Reuters.

(Reporting by Ayai Tomisawa, additional reporting by Nobuhiro Kubo and Taiga Uranaka; Writing by Aaron Sheldrick; Editing by Alex Richardson)

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