Iran calls on UK to take immediate action to pay 40-year debt

Iran’s Ministry of Defense in a statement on Thursday said that the UK must take practical measures concerning a 40-year debt to the country.

In reaction to not paying off the debt by the UK, the statement added that the authorities in the UK have refused to pay the debt under various pretexts such as unlawful and cruel sanctions, causing damage to their reputation in the international arena.

While the British Defense Secretary acknowledges the UK's 40-year debt to Iran to honor international regulations and to ensure Iran's national rights, London is expected to take practical and immediate steps to make up for the past so that the Iranians’ dissatisfaction with the UK will not continue, it noted.

The debt is based on an independent legal case that has nothing to do with the release of the prisoner and other matters, and the verdicts had been issued years before the case of the imprisoned offenders, it further noted.

With regard to the amount of the debt, the unreal figures published in the media are far from reality, and according to the time of payment, the final figures will be calculated with the corresponding interest, the statement said.

This debt is related to the purchase contract of tanks in 1971 signed by the British Ministry of Defense and the Pahlavi regime according to which the UK was supposed to deliver 1,500 tanks and armored vehicles to Iran.

The debt, or court award, originated from the non-delivery of contracts to the Iranian ministry of defense of Chieftain tanks dating back to before 1979.

The UK refused to complete the contract after the Shah was deposed, even though Iran had paid the money fully in advance.

The marathon court battle is meant to enforce an international court order dating back to 2012 awarding Iran £400m over the UK government’s non-completion of the contract to provide Iran with Chieftain tanks.

The UK has put nearly £500m into court as a surety for the award, but insists it cannot make the payment, let alone pay any interest accrued since 2008, on the grounds that Iran’s Defense Ministry is a sanctioned entity.

Iran has two major routes left to unlock the cash put into court by the UK. The first is a request to the Treasury’s office of sanctions implementation (OFSI) to accept voluntarily that the £400m can be paid to the Central Bank of Iran and not to Iran’s Defense Ministry. The Central Bank is not an EU-sanctioned entity.

Iran lodged its appeal in writing two years ago, but no ruling has emerged from the OFSI.

Iran is due to seek a UK court judgment in a case set for directing the UK to pay the £400m award into the coffers of the Central Bank. Lawyers for the UK government in court made clear to Justice Phillips that they will resist any requirement to pay the money to the Central Bank either in cash or kind since the ultimate beneficiary will in effect be the Ministry of Defense.

News Code 192313

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