• News
  • Columns
  • Interviews
  • BW Communities
  • Events
  • BW TV
  • Subscribe to Print
BW Businessworld

US To Pay Iran $1.7 Billion In Debt And Interest

In 1981, the Iran-US Claims tribunal was established in The Hague to settle outstanding debts between the two countries, and Tehran filed a suit demanding the arms payment be returned

Photo Credit :


The United States is to repay Iran a $400 million debt and $1.3 billion in interest dating to the "Islamic revolution", Secretary of State John Kerry said.

The repayment, which settles a suit brought under an international legal tribunal, is separate from the tens of billions of dollars in frozen foreign accounts that Iran can now access after the end of nuclear sanctions.

But the timing of the announcement, one day after the implementation of the Iran nuclear accord, will be seen as pointing to a broader clearing of the decks between the old foes.

US President Barack Obama defended the settlement in a televised statement from the White House, saying it was for "much less than the amount Iran sought."

"For the United States, the settlement could save us billions of dollars that could have been pursued by Iran. There was no benefit to the United States in dragging this out," he said.

Kerry said the claim was in the amount of a $400 million trust fund used by Iran to purchase military equipment from the United States prior to the break in diplomatic ties, plus $1.3 billion in interests.

Iranian-US ties broke down in 1979 after revolutionaries - angered at US support for the Iran's deposed monarch - stormed the American embassy and took hostages.

In 1981, the Iran-US Claims tribunal was established in The Hague to settle outstanding debts between the two countries, and Tehran filed a suit demanding the arms payment be returned.

Kerry described Sunday's payment of the 35-year-old trust as a "fair settlement," but it is sure to draw the ire of those in Washington who think he had already made too many concessions to secure the nuclear deal.

"Iran will receive the balance of $400 million in the Trust Fund, as well as a roughly $1.3 billion compromise on the interest," he said, in a statement.

"Iran's recovery was fixed at a reasonable rate of interest and therefore Iran is unable to pursue a bigger tribunal award against us, preventing US taxpayers from being obligated to a larger amount of money."

Kerry went on to say all of the US claims against Iran at the tribunal had long been settled and had netted American companies and individuals $2.5 billion.

But he added there are more Iranian claims pending and that the United States would try to negotiate to resolve them.

'No Nuclear Bomb'
Hailing the implementation of the landmark Iranian nuclear deal as a "milestone", Obama said every single path that Iran could have taken to build a nuclear bomb has been cut off.

Obama said this was a good day as engaging directly with Tehran has created "unique opportunities".

"Yesterday marked a milestone in preventing Iran from obtaining a nuclear weapon. Most of all, we achieved this historic result through diplomacy, without risking another war in the Middle East," Obama said in a televised statement from the White House.

"This is a good day, because once again we're seeing what's possible with strong American diplomacy. For decades, our differences with Iran meant that our governments almost never spoke to each other. Ultimately that did not advance America's interests," he said.


Tags assigned to this article:
iran iran nuclear deal john kerry barack obama

Top themes and market attention on: