U.S. to Pay Iran $278 Million for Weapons Held in Hostage Crisis

The United States has agreed to pay Iran $278 million to compensate for weapons withheld to protest the holding of hostages in the U.S. Embassy in Tehran 12 years ago, an official said Thursday.

The settlement clears the decks for resolution of a multibillion-dollar claim for weapons ordered and paid for by Iran but never delivered because of the U.S. arms embargo.

Iran has estimated its claims against the U.S. Foreign Military Sales program at up to $11 billion, a figure that U.S. officials at the Iran-United States Claims Tribunal contend is exaggerated.

In the document signed Tuesday in The Hague by American and Iranian officials, Washington pledged to transfer $260 million directly to the Iranian government for the impounded military materiel, according to a tribunal source.

The materiel includes tanks, missiles and even a submarine sent back to the United States for repair,then impounded when Muslim militants took 52 Americans hostage at the U.S. Embassy in Tehran in November, 1979.

The payment is expected after the settlement agreement is filed with the tribunal, probably today.

Another $18 million will go into the security account used to pay off claims against Iran arbitrated at the tribunal, the source said.

The final negotiations on the settlement coincided with last week’s release of American hostage Thomas M. Sutherland and Anglican Church envoy Terry Waite in Lebanon.

U.S. and Iranian officials at the tribunal have denied any link, even though Iranian officials have repeatedly set the return of impounded assets as a precondition for their intercession on behalf of the hostages.