The United Kingdom is preparing to transfer £400 million in frozen money to Iran as payment for a decades-long debt, according to media reports, amid suggestions the move will also serve as a “goodwill suggestion” to free a British mother jailed in Tehran.
The £400 million is understood to be part of a £650 million payment that Iran made to the UK regarding a 1970s arms deal.
However, only part of the goods were delivered when the then government was toppled in 1979 and the new regime cancelled the order.
Britain was meant to have refunded Iran the balance, but has reportedly been held back by sanctions, which have stretched over many years; government lawyers are said to be working out a way to process the payment without violating EU and US sanctions.
KYC360 approached both the UK Foreign and Commonwealth Office (FCO) and Office of Financial Sanctions Implementation for clarification on the matter.
Neither departments denied the reports, but both the FCO and Treasury (on behalf of OFSI) issued a statement saying:
“This is a longstanding case and relates to contracts signed over 40 years ago with the pre-revolution Iranian regime.
“Funding to settle the debt was paid to the High Court by the Treasury and IMS in 2002. Iran’s Ministry of Defence remains subject to EU sanctions.”
“It is wrong to link a completely separate debt issue with any other aspect of our bilateral relationship with Iran.”
The UK’s reported gesture to pay a 40-year old debt at this point in time has stoked suggestions that it is in fact a ploy to smooth relations with Iran, specifically as it seeks the release of jailed Nazanin Zaghari-Ratcliffe.
The British mother-of-one is being held in Iran despite growing calls for her release.
UK Foreign Secretary Boris Johnson has been strongly criticised for incorrectly saying she was teaching journalism in Iran, which the regime now reportedly claims is evidence she is plotting to overthrow the government.
Johnson has since told Parliament that Iran’s Foreign Minister said his [remarks] have had no link to her case.
His gaffe has been a cause of concern, with key figures calling for him to step down.
However, he has been making efforts to improve the situation, including meeting with Nazanin’s husband Richard Ratcliffe.
“The Foreign Secretary concluded [their] meeting by saying that no stone would be left unturned in the case of Mrs Zaghari-Ratcliffe, and that of our other dual nationals detained in Iran,” a FCO statement said of the meeting.
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