For full coverage of business events in Iran, see MEED
The US 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 today.
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.
“For the United States, the settlement could save us billions of dollars that could have been pursued by Iran,” US President Obama said in a televised statement from the White House later. “There was no benefit to the US in dragging this out.”
Kerry said the claim was comprised a $400 million trust fund used by Iran to purchase military equipment from the US prior to the break in diplomatic ties, plus $1.3 billion in interest.
The Iran-US Claims tribunal was established in The Hague in 1981 to settle outstanding debts between the two countries following the Iranian revolution of 1979 and the subsequent rupture between Washington and Tehran. Tehran filed a suit demanding the arms payment be returned.
Kerry said the 35-year-old trust as a “fair settlement.”
.”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 said.
Kerry said all the US claims against Iran at the tribunal had long been settled and American companies and individuals had recovered a net total of $2.5bn.
Kerry said there are more Iranian claims pending and that the US would try to negotiate to resolve them.
The announcement of the payment follows the release of Iranian prisoners in the US and American prisoners in Iran and the announcement on 16 January to the relaxation of nuclear-related sanctions on Iran.