U.S. Told to Give $451 Million in Frozen Assets Back to Iran

A special tribunal has ordered the United States to return $451.4 million in Iranian assets that the Carter Administration froze after Iran seized U.S. hostages in 1979.

In Washington, State Department spokesman Charles Redman declined to say Tuesday whether an appeal is being considered. Under a 1981 accord, the United States agreed to obey the tribunal, which consists of three American judges, three Iranians and three judges from other nations.

The arbitration ruling, issued Monday, came after months of negotiations between Iran and the United States failed to produce agreement on terms for transferring the funds, which Iran needs to help finance its war with Iraq.

Talks Bogged Down

Negotiations were hampered last year when Iranian Parliament Speaker Hashemi Rafsanjani said that the return of all Iranian assets was a condition for any Iranian intercession on behalf of U.S. hostages held in Lebanon. Most of the eight hostages are believed to be held by pro-Iranian Muslim militants.

Both the U.S. and Iranian governments denied there was a specific link between the two issues. However, U.S. officials said they wanted to avoid the impression of paying a ransom for the hostages.

In its ruling Monday, yielding to the U.S. objections, the tribunal said its award had “no relations or link whatsoever to the issues of hostages held in Lebanon or any other political matter.” U.S. attempts to gain the hostages’ freedom led to secret American arms sales to Iran.

The money at issue has been held at the New York branch of the Federal Reserve Bank since 1981, the year that Iran freed 52 U.S. hostages after 444 days of captivity at the U.S. Embassy. It is the residue of a $3.66-billion account set up with Iranian funds to pay off syndicated bank loans to Iran.

The tribunal ruled last August that the money belongs to Iran, but it left it up to the two nations to try to arrange the transfer.

The latest award brings to $1.26 billion, plus interest, the total amount of awards issued by the tribunal. Of this figure $746.2 million has been assigned to U.S. claimants and $512.9 million to Iranian claimants.

Several thousand claims worth billions of dollars remain to be arbitrated by the panel.