“The United States and Iran today have settled a long outstanding claim at the Iran-U.S. Claims Tribunal in the Hague,” the statement from Secretary of State John Kerry reads. “This specific 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.”
The claim was first filed in 1981 when Iran had an outstanding order for military equipment under the regime, which the U.S. refused to fill after the Iranian revolution. The payment is in addition to the $100 to $150 billion of Iranian assets the United States agreed to unfreeze as part of the Iranian nuclear agreement.
“In 1981, with the reaching of the Algiers Accords and the creation of the Iran-U.S. Claims Tribunal, Iran filed a claim for these funds, tying them up in litigation at the Tribunal,” the statement continues.
The $1.7 billion payment stems from the original $400 million plus $1.3 billion in interest the State Department agreed to pay on that money.
The entire press release from the State Department reads:
The United States and Iran today have settled a long outstanding claim at the Iran-U.S. Claims Tribunal in the Hague.
This specific 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. In 1981, with the reaching of the Algiers Accords and the creation of the Iran-U.S. Claims Tribunal, Iran filed a claim for these funds, tying them up in litigation at the Tribunal.
This is the latest of a series of important settlements reached over the past 35 years at the Hague Tribunal. In constructive bilateral discussions, we arrived at a fair settlement to this claim, which due to litigation risk, remains in the best interests of the United States.
Iran will receive the balance of $400 million in the Trust Fund, as well as a roughly $1.3 billion compromise on the interest. 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 U.S. taxpayers from being obligated to a larger amount of money.
All of the approximately 4,700 private U.S. claims filed against the Government of Iran at the Tribunal were resolved during the first 20 years of the Tribunal, resulting in payments of more than $2.5 billion in awards to U.S. nationals and companies through that process.
There are still outstanding Tribunal claims, mostly by Iran against the U.S. We will continue efforts to address these claims appropriately.
