U.S. Ordered to Give Frozen Assets to Iran : Tribunal Says Return of $451 Million Is Not Linked to Hostages

The Iran-U.S. Claims Tribunal has ordered the United States to return $451.4 million in frozen assets to Iran. The tribunal said its order was not linked to the fate of American hostages held in Lebanon.

Monday’s ruling, a copy of which was obtained by the Associated Press today, referred to Account No. I, which was set up in 1981 with $3.66 billion in frozen Iranian money to pay off Iran’s loans to banks.

The Account No. I funds were part of billions of dollars in assets, including weaponry, which were frozen by the United States after Islamic militants seized the U.S. Embassy in Tehran in 1979.

There was $514.4 million left in the account as of March.

Original Order in August

The tribunal originally ordered Washington last August to return the funds to Iran. But U.S. officials told the tribunal in January that “U.S. compliance with the tribunal’s order would be regarded by some as a surrender by the U.S. to Iran’s improper demands” regarding the hostages.

The United States asked for a statement by the tribunal that the ruling was not related to the U.S. hostages.

Iranian Parliament Speaker Hashemi Rafsanjani said last fall that return of all assets held by the United States was a condition for any Iranian government intercession on behalf of the American hostages.

Eight Americans are missing in Lebanon, and most are believed held by pro-Iranian Shia Muslims.

Iran asked the nine-judge tribunal to dismiss the U.S. request as irrelevant to the case, citing a January statement by Rafsanjani that tribunal matters “have nothing to do with the problems of Lebanon or the hostage-takings.”

Arranged Hostages’ Freedom

The 1981 Algiers Accords set up Account No. I and established the tribunal, as well as arranging freedom for the 52 American hostages held for 444 days at the embassy in Tehran.

Although the United States had agreed to Iran’s right to most of Account No. I, Washington sought to retain part of the money to pay off a few outstanding loans and interest. The United States also wanted a legal quitclaim from Iran absolving the New York Federal Reserve Bank, where the funds were deposited, of any further responsibility for the account.

As part of the settlement of the Account No. I issue, the United States and Iran agreed to leave $63 million plus interest in the account to satisfy outstanding claims, out of the $514.4 million left in the account as of March. The claims include contested bank loans and interest Iran may owe on some loans.

The two nations were unable to agree on the wording of a quitclaim, so the tribunal declared that upon transfer of the $451.4 million to Iran, the United States and the Federal Reserve Bank would be released from any further Iranian claims relating to the account.