Iranian DM Asks for Britain's Practical Steps to Pay Long-Awaited Debt
TEHRAN (FNA)- Iranian Defense Minister Brigadier General Amir Hatami underlined the need for Britain's practical commitment to the 40-year-delayed payment of its debt to Tehran.
General Hatami made the remarks in response to his British counterpart Ben Wallace on Monday which said that Britain should clear a standing debt with Iran.
“Although Ben Wallace, the British Secretary of Defense, has reiterated the need to clear the payments of military agreements between the two sides and the need to pay the debt to the Islamic Republic of Iran after forty-two years, there is always a gap between the British authorities' position and practical will,” General Hatami said.
“Regarding the court verdicts, the contractual obligations and numerous discussions held between the two sides about practical solutions to clear the debts, the restrictions resulting from the oppressive sanctions on Iran are not the main obstacle,” he said.
General Hatami noted that the will of the British government is needed in practice to end this issue through the solutions discussed in the talks between the parties.
The 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 Britain 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.
Britain 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 British government’s non-completion of the contract to provide Iran with Chieftain tanks.
Britain 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 Britain. 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 British court judgment in a case set for directing Britain to pay the £400m award into the coffers of the Central Bank. Lawyers for the British 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.