Iran Cash Payment Was Dues, Not Ransom

Iran Cash Payment Was Dues,  Not RansomIran Cash Payment Was Dues,  Not Ransom

US President Barack Obama on Thursday strongly pushed back against criticism that the administration's payment of $400 million in cash to Iran amounted to ransom in exchange for the release of American prisoners.

Iran released the five detainees on January 16 after the United States had agreed to grant clemency to seven Iranians held mostly for alleged sanctions violations and drop charges against 14 Iranians overseas. The payment, which the administration announced the following day, coincided with the lifting of international sanctions against Tehran as part of a historic nuclear deal reached last year.

"We announced these payments in January, many months ago. It wasn't a secret. This wasn't some nefarious deal," Obama said at a press conference at the Pentagon, Reuters reported.

At the time, the United States said it had settled a longstanding Iranian claim at the Iran-US Claims Tribunal in The Hague, the Netherlands, releasing $400 million in funds frozen since 1981, plus $1.3 billion in interest that was owed to Iran.

The funds were part of a trust fund Iran used before its 1979 Islamic Revolution to buy US military equipment that was tied up for decades in litigation at the tribunal.

The claims, which had dragged on for decades, were resolved in January because the United States and Iran were having diplomatic discussions for the first time in years, thanks to the negotiations over the nuclear deal, Obama said.

"The issue is not so much that it was a coincidence, as it is that we were able to have a direct discussion," he said. "[US Secretary of State] John Kerry could meet with the [Iranian] foreign minister, which meant that our ability to clear accounts on a number of different issues at the same time converged."

He said the United States does not pay ransom for hostages and that the money was not linked to the prisoners' release.

"The reason that we had to give cash is precisely because we are so strict in maintaining sanctions and we do not have a banking relationship with Iran," Obama said.

***Separate Track

US Secretary of State John Kerry also defended the cash payment to Iran, denying it was a ransom for the release of the American prisoners by Tehran or tied to the Iran nuclear deal.

"The United States does not pay ransoms," Kerry told a news conference in the Argentine capital Buenos Aires on Thursday.

He said the transfer was negotiated on a separate track from the nuclear deal.

By settling the claim, it saved US taxpayers potentially billions of dollars in further interest payments, Kerry added.

"We believe this agreement for the $400 million that was paid in interest and settlement of the case actually saved the American taxpayer potentially billions of dollars."

Kerry noted that there was no benefit to the United States of America to drag this out.

"It would have worked against the interests of our taxpayers and with the nuclear deal done, the prisoners released, the time was right to take advantage of that and resolve the dispute in the way that it was resolved," he said.