Reasons Behind the Financial Dispute of Iran and U.S.
In the year 1979, the revolutionary government of Iran hostages 52 people at the U.S. embassy and U.S. served a diplomatic relations with Tehran. As a retaliation, Washington then froze the $12 billion of Iranian assets that were held on our shores. The crisis was resolved in 1981 through a conference in Algiers and Iran was later on returned with $3 billion and was given other funds to pay to creditors. The two nation then created a tribunal that was called as the Iran United States Claims Tribunal to settle claims which were both leveled by each government against others.
The primary issue of the two governments was due to the $400 million payment on the military equipment that was made by the government of the Shah of Iran before the 1979 uprising. The U.S. also banned the delivery of the weapons as well as the jets during the hostage crisis and they also froze the $400 million advance payment. According to the statement of Gary Sick who was a former National Security Council official that served as the principal White house aide during the Iranian Revolution and hostage crisis, “The Pentagon handled arms purchases from foreign countries.” Another addition was that he said “Defense took care of the details. So the $400 million scheduled purchase was a government-to-government transaction. The U.S. government was holding the money. That’s why it was so difficult to resolve.”
In 2015, the said issue stood before a panel of nine judges which includes three independent jurists who were actually near a decision of binding arbitration. Back on the Obama administration officials, the U.S. was concerned on the case where the tribunal is going to mandate an award in multiple billions of dollars. Gary Sick also said that “The Iranians wanted $10 billion, I estimate that the tribunal would have awarded them $4 billion. That’s what the lawyers were saying. It’s not as much as they wanted, but a lot more than we paid.”
U.S. negotiators also convinced Iran to move the dispute from arbitration towards a private settlement. The two sides later on reached to an agreement back in 2015 and both Iran and U.S. reached to a comprehensive pact in order to curtail Iran’s development in nuclear weapons. The financial deal lead to the call of the U.S. in refunding $1.7 billion to Tehran that consists of the original $400 million contract for the military equipment and the $1.3 billion for its interest. The U.S. also made big payments to Iran because of the 35 year old deal on the weapons which were not received.
The suspicion likewise is where teams collaborated and worked on the hostage, financial and weapon negotiations and the hostage release was then the sweetener to clinch the controversial nuclear agreements.