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US Payment of $1.7b to Iran Was in Cash

US Payment of $1.7b to Iran Was in CashUS Payment of $1.7b to Iran Was in Cash

The administration of US President Barack Obama acknowledged on Tuesday its transfer of $1.7 billion to Iran earlier this year was made entirely in cash, using non-US currency, as Republican critics of the transaction continued to denounce the payments.

US Treasury Department Spokeswoman Dawn Selak said in a statement the cash payments were necessary because of the "effectiveness of US and international sanctions", which cut off Iran from the international finance system, AP reported.

The $1.7 billion was the settlement of a decades-old arbitration claim between the US and Iran. An initial $400 million in euros, Swiss francs and other foreign currency was delivered on January 17, the same day Tehran agreed to release four American prisoners.

The Obama administration had claimed the events were separate, but recently acknowledged the cash was used as leverage until the Americans were allowed to leave Iran. The remaining $1.3 billion represented estimated interest on the Iranian cash the US had held since the 1970s.

The administration had previously declined to say if the interest was delivered to Iran in physical cash, as with the principal, or via a more regular banking mechanism.

Earlier Tuesday, officials from the State, Justice and Treasury departments held a closed-door briefing for congressional staff on the payments, according to a Capitol Hill aide familiar with the session.

The officials said the $1.3 billion was paid in cash on January 22 and February 5. The aide was not authorized to speak publicly and requested anonymity.

  Little-Known Fund

The money came from a little-known fund administered by the Treasury Department for settling litigation claims.

The so-called Judgment Fund is taxpayer money Congress has permanently approved in the event it is needed, allowing the president to bypass direct congressional approval to make a settlement. The US previously paid out $278 million in Iran-related claims by using the fund in 1991. Republicans have decried the payments as ransom, a charge the Obama administration has rejected.

On Tuesday, a group of Republican senators announced their support for legislation that would bar payments from the Judgment Fund to Iran until Tehran pays the nearly $55.6 billion that US courts have judged that it owes to American victims of alleged Iranian terrorism.

 

Financialtribune.com