Iran No More Possesses Deposits in American Banks|
Payame Azadi (Morning Daily)
Sunday - Monday 16, 17 Jan., 2000, Nos. 123 & 124
By: Roozbeh Farahanipour
Summary: The question of the Iranian assets and deposits in the United States and the method of arbitration of the claims of the two states at the Hague International Tribunal in the past 18 years, has always been an interesting, controversial and important topic, whilst officials have announced different figures at different intervals. For the first time Dr. Goodarz Eftekhar Jahromi, Iranian representative to the Hague Tribunal, has supplied very valuable and comprehensive information to Payame Azadi daily. Text:
Q: How much was the volume of Iranian assets in the U.S. banks before the victory of the Islamic Revolution and why is it that different figures ranging from 10 to 20 and even 30 billion dollars are mentioned? What is the reason for this gross difference? A: We must divide the Iranian assets in the United States at the time of the victory of Islamic Revolution into three groups: a. Physical (tangible) properties such as equipment, machinery, industrial and commercial commodities; b. Cash money in U.S. banks entitled as Iranian assets; c. The balance of trust money which had been opened in the U.S. for military purchases. a. Physical properties: By physical properties we mean movable properties (except diplomatic properties which are both mobile and stationary). Such properties are themselves divided into three groups: military properties, civil properties and diplomatic properties. 1. MILITARY PROPERTIES Part of the Iranian military assets in the U.S. are those which were purchased under the project of military wares purchased from the U.S. by the Shah's regime. On the eve of the victory of the revolution and during (Shahpour) Bakhtiar's government a memorandum of understanding was signed between the two states which canceled that project. Iran had opened a trust account in the name of the Ministry of Defense in the U.S. and Washington withdrew from that fund in lieu of sale of military gear. After the convention of the Hague Tribunal the Ministry of Defense of the Islamic Republic of Iran benefited from the opportunity to file a petition against the U.S. government on that project and the military items which had been sent to the U.S. for repair or modification, and demanded the return of the properties as well as compensation. After extensive investigations the Tribunal eventually announced that failure to return these properties was construed as a sort of confiscation of properties and ruled that the U.S. must return the Iranian properties and assets. Then experts from the two sides sat together and assessed the military properties. Following those assessments and in compliance with the Hague ruling, Washington paid 278 million dollars to the Iranian government. However with regard to the Iranian trust account for military purchases I will explain the matter later. With regard to another part of the Iranian properties which had been purchased by the Shah's regime from U.S. companies, Washington imposed a sanction on them after the victory of Islamic Revolution and refused to issue exit permits. Part of the ware was stored in the Victory Van warehouse in the U.S and another part was retained by U.S. vendors. Of course the two side differ about the ownership of these properties. However the Iranian Ministry of Defense has filed a claim against the U.S. on Washington's failure to issue permit for their delivery to Iran and the court proceeding is continued. 2. CIVIL PROPERTIES The Iranian civil properties in the U.S. is mostly composed of some machinery, computer, industrial spare parts and the like which the Iranian government departments had purchased from U.S. companies before the victory of the revolution or had sent them to that country for repair. However, with the victory of the revolution and seizure of American hostages and the freezing of the Iranian assets and rupture of diplomatic ties between the two sides, these properties had remained in the U.S. Of course based on the Algiers Declarations, Washington committed itself to make necessary arrangement to return these properties but since it failed to discharge its commitment Iran filed another suit against Washington which led to the condemnation of that country by the Hague Tribunal. A statement from the Tribunal said the U.S. had violated the Algiers Declarations and condemned Washington ordering it to pay compensation to Iran. Meanwhile a series of legal bills have been exchanged between the two parties about the assessment of the amount of damage and justifications made by the Iranian government departments and the case is still pending. 3. DIPLOMATIC PROPERTIES Diplomatic assets and properties in Iran include several bank accounts belonging to the former Iranian diplomats in the U.S. which the two sides differ in its amount as well as some mobile properties existing in former Iranian embassy in Washington and the buildings owned by former Iranian embassies in various states of that country. In the Algerian Declarations the U.S. has committed itself to lift all the bans on the Iranian assets and properties, but so far it has not returned the Iranian diplomatic properties. These properties are subject to special regulations incorporated in the Vienna Convention and since Iran has joined that convention the U.S. must act according to its ruling. In other words Washington says since Iran has refused to return the former U.S. embassy and interior equipment, according to the provisions of the said Convention and international norms it is justified to retain the Iranian diplomatic properties. Such an assertion is of course not right because in the Algerian Declarations which are considered as legal international treaties, Washington has undertaken to return all Iranian properties, but it has refused to discharge its obligations. As a consequence the Iranian foreign ministry has filed two claims at the Hague for the return of mobile and stationary diplomatic properties and the case is being arbitrated. Several years ago an agreement was inked with the U.S. State Department to transfer the properties, personnel and administrative equipment of the Iranian interest section in Washington to Pakistan which was formerly handled by the Algerian government. The representative of the Iranian foreign ministry has agreed that the Iranian diplomatic properties should remain under the consisting condition without change and the U.S. has been authenticated this agreement in its recent legal bills. Of course the Islamic Republic has protested to the groundless U.S. justification. As mentioned earlier the foreign ministry's petition against the U.S. government on diplomatic properties is under investigation in the Hague Tribunal and the court has not yet issued its final judgment. b. Iranian deposits with U.S. banks: That which is known as Iranian assets in the U.S. banks are some bonds, gold, and cash deposits by the Central Bank of Iran and other Iranian government departments in the U.S. Federal Reserve (Bank) or other U.S. banks. Except the amount of gold and other valuable bonds belonging to CBI which is relatively known, the amount of deposits in the U.S.-owned banks (within and outside the U.S.) is not quite clear. The reason is diversity of accounts and bank deposits and the chaotic condition resulting from the victory of the revolution in Iranian banking system and government departments, which has led experts and staff to announce different figures. But according to an investigation conducted by CBI and based on the collected documents, it was established that during the hostage taking, the total Iranian deposits in U.S. banks was a little over 10 billion dollars. With the signing of Algerian Declarations and freeing of American hostages, Washington undertook to release Iranian deposits and cash (including Iranian bonds and gold) and has acted accordingly and 10 billion dollars was reimbursed to Iran in two stages. But part of the money was spent to repay Iranian debts which I will describe later. After the release of these deposits it become known that Iranian deposits had either remained with other U.S. banks or not enough interest had been paid to. As a result CBI lodged a complaint against the U.S. government and demanded the refund of the moneys and shortage of interest, and the U.S. government and Federal Reserve announced that they are ready to repay the moneys. After assessment of these deposits by the experts from the two sides and in the course of settlement of bank accounts another 10 billion dollars was received from the U.S. government against the balance of interests or the remaining deposits of Iranian government departments at that country. c. Balance of trust account covering military contracts: The third group which is referred to as Iranian assets and properties in the U.S. is the balance of trust account which the Shah's regime had opened in the U.S. for purchase of military hardware in the name of the defense ministry. As mentioned a memorandum of understanding was signed between Bakhtiar's government and the U.S. which had canceled the Iranian contracts for purchase of military equipment. But with the victory of the revolution, when the defense ministry and other related departments investigated these accounts it become clear that Iran had deposited approximately 11.3 billion dollars in his fund, whereas according to bills of lading for goods up to June 1979 the U.S. had supplied only about 9.5 billion dollars worth of goods and military attached service to Iran and owed still 1.8 billion dollars to Tehran. In addition according to the existing documents and bills on such items, the U.S. has failed to return 1.4 billion dollars worth of goods which makes the total U.S. debt against military contracts 3.2 billion dollars. As a consequence the Iranian defense ministry profited from the Hague Tribunal and filed a complaint against the U.S. government and demanded that overdue money and the case is still pending. But during the litigation in 1988 in one of its legal bills the U.S. said that the Iranian trust fund owned only 543 million dollars and claimed that part of that money should be paid to various U.S. sub-contractors as damage for cancellation of contracts and that only 173 million dollars remained due to Iran. Washington believes that the cost of cancellation of contracts must be borne by Iran because Tehran has revoked them, but we believe that the cost must be born by the U.S. and the argument continues and awaits the court's judgment. Meanwhile we profited from the chance and called on the Tribunal to call on the U.S. government to return that 173 million dollars of the outstanding trust fund immediately until the fate of thousands of contracts about minor and major military hardwares with the U.S. are settled in years and Washington agreed to pay that money along with relevant interests. But during the investigation and computation of interests the U.S. reimbursed 200 million dollars (i.e. 27 million dollars over that the U.S. had announced earlier) against part of the balance of the Iranian trust fund. Thus the only case pending unsolved is the 3.2 billion dollars claim of the ministry of defense and the two sides are exchanging bills and documents to settle the dispute at the Hague Tribunal. Due to diversity of contracts and military hardware, and the huge bulk of documents and their sophisticated nature, the condition of the Iranian trust account for the Shah's military purchases from the U.S. has always been debated differently and different figures have been mentioned. Now with the above explanations it is quite clear that when we are speaking of the Iranian properties and assets in the U.S. to what a huge and diversified volume we refer. Naturally a single person cannot have correct and dependable information about all these cases particularly because disturbance and anarchy at the time of victory of the revolution and the large quantity of documents scattered everywhere prevented various organizations to quote correct figures at the time. In fact each official commented according to his information in the absence of a coordinating body which could control and correct the data. For these reasons at times the volume of Iranian deposits have been quoted as ranging between 20 to 30 billion dollars. Nevertheless other factors which led to different Iranian claims from the U.S. about the volume of Iranian assets and properties in that country, are as follows: In the assessment of physical (tangible) military or civil properties, each person or organization fixed his/its own pricing or auditing in the U.S. and announced his/its own figure. As mentioned above part of the Iranian assets was the balance of the Iranian trust fund for purchase of military hardware. The total amount deposited in the fund by Iran has been said to be 20 billion dollars, but after the review of files it was known that about 11.3 billion dollars was deposited there. Regarding the balance of that account based on the documented return of goods to Iran, various figures were announced, and Washington in the end said the balance was 543 million dollars. For example at times the value of the military equipment from the U.S. which had not yet been delivered to Iran was accounted as the balance of money that should be paid to Iran and at other times when documents were received that proved that some military hardware had been delivered, another figure was announced. Moreover, the balance in the fund was calculated according to the latest figures mentioned in financial statements. Anyhow the U.S. has claimed and still claims that a huge amount of such deposits must be paid to cover various statements or reimbursed to subcontractors or manufacturers as compensation for cancellation of contracts. Of course the ministry of defense and Washington disagree on this case and the case is argued at the Hague Tribunal. As we said the Iranian deposits and cash included bond and gold that belonged to CBI and various deposits by CBI and other Iranian government departments in the U.S. But with the exception of bonds and gold bullions, some of which were better known, no concentrated information about the amount of hundreds of government accounts in the U.S. existed. Moreover according to the rate of terms of loan and the rate calculated for interests, the result differed and different figures resulted. At the beginning of the victory of the revolution for several months CBI even had no concentrated information and during the freezing of Iranian assets in February 1979 (one year after victory of the revolution when the U.S. hostages were taken), due to chaos in the banking system and scattered documents and change of government officials, experts were unable to comment definitely and in those days the total Iranian dues from U.S. was quoted between 8 to 14 billion dollars. Of course during the inking of Algerian Declarations in December 1980 as a result of added exertions by CBI and recovery of documents from various parts of the country, CBI concluded that the Iranian deposits and cash in the U.S. banks were over 10 billion dollars and that money was released by Washington.
Meanwhile one must refer to another factor as to why different figures about the deposits were mentioned. This other factor was the hue and cry and tension that was created by some persons and newspapers or magazines at the beginning of the victory of the revolution, during hostage-taking affair and confiscation of Iranian assets by Washington, and any report was published without any reserve. Q: How much Iranian cash and bank deposits have been recovered from the U.S.? A: As I said in reply to your first question, the total Iranian deposits and assets comprising cash, bonds and gold bullions amount to around 10 billion dollars. During the negotiations under the Algerian Declarations in which the U.S. agreed to release the Iranian deposits, Washington referred to Iran's debts and the loans granted to Iranian banks or organization by U.S. banks. In this connection it is better to hear the definition of martyr Rajaie about this case and the solutions that were proposed in the Algerian Declarations. After inking the Algerian Declarations in an open session of the Islamic Consultative Assembly (Majlis) on 26 January, 1981 Prime Minister Rajaie supplied a detailed account to the Majlis and the deputies endorsed his measures. Part of martyr Rajaie report covering these deposits is as follows: "Nearly eight billion dollars had been deposited to Algerian Central Bank before the release of hostages. The Iranian assets with U.S. banks would be returned to Iran by July 1981 after the end of the litigations and waiver of the confiscation of the assets. Meanwhile after exchange of necessary information and documents, other Iranian assets would be returned to the country, and should a dispute arise between the two sides the judgment of the court of arbitration will prevail. "Out of the eight billion dollars deposited in the Algerian Central Bank, 3.6 billion dollars will be returned to American banks in lieu of the main loan and the interest of delinquent installments by Iranian government or departments controlled by the Iranian government, as described below. Meanwhile 1.4 billion dollars will remain frozen in the Algerian Central Bank to meet payments for cases of dispute about the amount of deposits and accrued interests to Iranian deposits in American banks. After careful settlement of dispute between Tehran and Washington, this sum will be returned to Iran or the United States. "Transfer of the deposits from European branches of American banks was a major problem, because during the Shah's regime some money had been loaned from American banks and companies which had not been fully settled and the debts continued to exist. Before releasing the Iranian deposits, the American banks and companies were asking for guarantee and would not release the Iranian deposits without such guarantees. To release these deposits, the following suggestions were raised: "1. The American banks suggested that a fixed account amount of about two billion dollars should be opened in an American bank in order to guarantee the return of the original loans and interests for the next two years, and that the Iranian balance should not sink below that figure. Meanwhile CBI should waive its assertion and responsibility to the effect that the assets should remain free before finalizing of the case in the court in various countries and should abide by British court ruling. The Iranian government should also give a similar guarantee. Evidently the American suggestion resembled the imperialistic agreements that were concluded during the Qajar period. Therefore we could not agree to that suggestion and rejected it. "2. Iran should refrain from withdrawing its assets in the U.S. bank branches in Europe and should merely return the conditions to that prevailed before hostage taking and continue its normal fiscal and monetary transactions with these branches. In that case Washington would no more call for guarantee and our deposits in the American branches would be a guarantee for American firms. This suggestions suffered from the following shortcomings: "a. To retain our assets in U.S. banks would mean the continuation of the former monetary and fiscal transactions with Washington; "b. Experience has proven to us that Washington never abides by any international law and in the same way that it formerly confiscated our assets it would easily confiscate our deposits once a complaint is lodged by an American company and the U.S. bank receives a court order. We therefore rejected that option. "3. The last option which was considered favorably and enjoyed many merits was that Iran should return all the loans and loan installments it owed to American banks and companies and settle its account with these creditors. "The first positive result of this option is that Iran would be rescued from the pressure of the heavy loans that has been imposed on Tehran. These loans had been paid to Iran by American companies to purchase American goods and in fact by paying such loans the U.S. had opened new markets for American goods in Iran. "The second positive impact of the third option was that Iran would not be forced to pay the heavy interests for such loans which at times climbed to 22.5 percent. It must be noted that out of the total loans, only 92 million dollars of the loans was received with low interest rates of 3 to 7 percent and the rest was received with very high interest. "And the final merit of the third option was that Iran could start cutting its monetary and banking relations with the U.S. imperialism. "Taking into account the positive points of the third option, the Iranian government preferred to repay all its loans instead of giving any guarantee for the loans that we had received the U.S. and wholly sever monetary and banking ties with that country." I quoted the above statements from the late prime minister Rajaie, who was directly involved in the case, firstly to keep you informed of the details of the case, and secondly to shed light on the method adopted by the then Iranian government about release of Iranian reserves and assets and reimbursement of Iranian debts. Besides eight billion dollars, Iran possessed about 2.05 billion dollars deposits plus interest within the United States which according to the stipulation of the Algerian Declarations were released about six months later, i.e. July 1981. Out of this sum one billion dollars was set aside as guarantee of accounts under the Tribunal's jurisdiction. Of course it is necessary to add that out of 3.667 billion dollars (known as Account No. 1) which had been set aside for repayment to syndicates and the U.S. Federal Reserve and CBI were charged to jointly review and disburse the moneys, approximately 300 million dollars had been left which naturally belonged to Iran and the CBI and should have been returned to us. The U.S. government was also tentatively agreed to that but argued that no mechanism existed in the Declarations for its return to Iran. As a result CBI and the Iranian government took action against the U.S. government at the Hague Tribunal for its restitution and after exchange of legal bills between the two sides and detailed study of the case, the Tribunal issued judgment in Iran's favor and in May 1987 condemned Washington to return the balance of Account No. 1 to Iran and in the end they reimbursed about 540 million dollars to Iran which included the deposit plus interest. In addition after necessary studies by Iranian government departments, it become known that part of Iranian deposits in American banks had not been returned or their interest was not properly calculated. In this connection also a petition was filed against the United States and during the arbitration process Washington announced that it was prepared to submit to Iran's request. Subsequently following examination of such accounts by the government departments and CBI experts approximately 10 billion dollars was recovered from the United States in 1995 in lieu of part of the outstanding deposits plus interests and deduction of such deposits whose interests had been obtained earlier. As we saw in the late Rajaie's report to the parliament, 1.4 billion dollars of the deposits has been reserved in a special account to be paid to U.S. banks in order to cover Iranian debts and after settlement of such accounts the balance plus interest amounting to 810 million dollars was reimbursed to Iran in 1989. As a consequence, out of a total of over 10 billion dollars Iranian deposits, over 5 billion dollars was deposited in the Algerian Central Bank as payment against the Iranian loans from American companies and one billion dollars was deposited as a guarantee in that bank to be paid for subsequent Iranians dues to American banks by the Hague Tribunal and the remaining four billion dollars was returned to Iran six months after signing of the Algerian Declarations. Thus the balance of the said five billion dollars i.e. 1.35 billion dollars was also reimbursed to Iran. All the steps taken for reimbursement of Iranian bank loans was conducted by or under the supervision of CBI and the Department of Services in the Tribunal only arranged for the return of 1.35 billion dollars to Iran. Thus Iran no more possesses any deposits in the American banks except the deposits made by the former Iranian embassies and consulates. Q: What were the U.S. claims about and how much guarantee did the Americans obtain and how much did Iran receive from them? A: Until the victory of the Islamic Revolution, U.S. companies had worked for 37 years in Iran and each day they added to their operation and trade. The majority of big projects ranging from oil and development to building and industrial projects were being launched by U.S. companies and they imported various equipment, machinery and technology into Iran and had established companies and some of these companies had big shares in Iranian companies and even insurance companies and banks. In short the Americans had lot of assets in Iran. The American control and influence in the Shah's army and the giant purchases from the U.S. also, formed a giant part of the American works in Iran. But with the victory of the Revolution, new regulations were approved that nationalized industries, banks and insurance companies, and the Islamic law in the country placed all mother industries and even commercial and industrial activities such as banks under the government control from (domestic and foreign) private possession. According to a single note ratified by the Revolution's Council all the oil agreements which opposed the nationalized oil were announced as nil and void. Moreover, in keeping with the duties vested on them, the revolutionary courts ordered the confiscation or auction of many companies, factories and properties. As we said the Americans had shares in the majority of industries, companies, factories and even banks which had now been nationalized or placed under government control or confiscated or auctioned. In addition, during the second half of the Iranian year 1357 (March 21, 1978-March 20, 1979) when the country was unstable and as a result of the victory of the revolution, Americans left Iran and left their contrasts unfinished under the pretext of force major whilst Iranian companies owed them considerable amount of moneys. Also at times they had sold items to Iran but had not received payment. From legal point of view all these developments led American companies and even private persons to file claims against the Iranian government or government departments which had confiscated or auctioned their properties. Before the approval of the Algerian Declarations and setting up of the Hague Tribunal, the American companies and even American persons had appealed to U.S. courts (and even to courts in other countries) and had filed various sorts of claims and complaints against Iran and due to the anti-Iranian atmosphere hanging in the U.S., which was aggravated with the hostage-taking issue, they had easily succeeded to freeze the Iranian assets and properties (physical properties and banking accounts). During the settlement of the hostage-taking dispute, one of the Iranian conditions to release the refugees was that all the confiscations on the Iranian assets and properties in the U.S. should be waived, but since Iran had to answer to U.S. claims and Iran itself had claims against American companies, Tehran and Washington agreed to set up an international court of arbitration so that the nationals of the two countries and the two government could raise their claims within a period of one year. Thus one can see that firstly the American claims and complaints were mostly resulting from changes and regulations which had been enacted after the victory of the Islamic Revolution in the form of nationalization of properties or the verdicts issued by the revolutionary courts. Secondly the solution of these disputes against which petitions had been filed in U.S. courts called for settlement of them through litigation, and in the end they were referred to the Hague Tribunal. In the meantime Iran also succeeded to file claims as were stipulated in the declarations. I made these explanations to clarify the grounds for American claims, but on how much they received against their claims, what I can say at this point is that the Americans filed around 3900 petitions against Iran of which of course 2880 were small disputes which covered less than 250,000 dollars. Of course the exact figures in such petitions cannot be made known because the figures quoted in their earlier bills could have changed during the litigation process, but as an approximate estimation, the Americans made a total claim of around 17-18 billion dollars of which so far 2.14 billion dollars has been settled through the Hague Tribunal and has been recovered from the guarantee account. Also another 500 million dollars has been claims against related government departments and the rest has been compromised verdicts i.e. the two sides had agreed to the amount of the claim and to settle their disputes. Against such payments by Iran specially payments which had been compromised at times, the related Iranian government department collected against its claims the industrial equipment, machinery and other American properties which had been left in Iran. Of such items, as an example, one can refer to the polyacryl factories in Isfahan, half of the shares of Kharg Chemical Co. , oil drilling rigs, two Boeing aircraft, a lot of machinery and technical equipment and the shares of companies and even the balance of accounts of American companies in Iran which were placed under Iranian custody after issuance of a court settlement order. Iran also on its part received about 2.145 billion dollars from the U.S. through the Hague Tribunal of which approximately 530 million dollars were against such American court verdicts which were issued to the Iranian benefit and the rest were compromised judgments which had been settled with the agreement of the two sides, or 200 million dollars balance of Iranian trust for purchase of American military gear by the former regime or the balance of bank accounts in American companies, or sale of Iranian oil by American companies which made a total of 2.145 billion dollars. Q: How much did the Iranian citizens in the U.S. (who possess double citizenship) receive? A: With regard to such claims I must first explain that it was not for the Tribunal to decide to arbitrate such claims from legal point of view and the case has been censured by many international lawyers. In fact the Algerian Declarations had been made in a satisfactory manner and there was no ambiguity that the court had to judge against American citizens claims and their justification to judge the Iranian citizens in the U.S. was not correct from legal point of view. Moreover the Tribunal's decision conflicted with international legal norms and the international responsibility of governments versus their subjects and equal right of arbitration by governments. But the Tribunal maintained that holders of double citizenship can also refer to it and file their petition provided they could prove that they are really American citizens. The majority of such Iranians had received U.S. citizenship before the Algerian Declarations. but we must not forget that Washington was not satisfied with the Tribunals verdict because it said that all claims of the Iranians who had become American citizens regardless of their date of citizenship should be considered by the court. But the Tribunal decided to take a midway court and by stipulating definite citizen limited such petitions and claims. These holders of double citizens had filed some 125 claims and their total claim amounted to approximately three billion dollars. But many claimants who had not definite citizenship or that their application for citizenship had been rejected when they complained to the Tribunal were not considered eligible for arbitration and their cases were rejected. As a result the Tribunal has so far judged only 13 such cases with double citizenship and issued verdicts for a total of 38.5 million dollars to which some interest must be added and this payment is against 210 million dollars that they (13 cases) had claimed. In short against the three billion dollars claims by holders of double citizenship the court agreed only on 38.5 billion dollars and the rest of the claim was rejected. meanwhile such payments were mostly made against American citizens who had married Iranian women and obtained Iranian citizens. In other words they had imposed themselves as Iranian citizens. or those who had inherited properties like the children of Iranians who dwelt in the U.S. Q: What was the role of the Iranian lawyers in the defense against such claims in the Hague Tribunal? Did they perform satisfactory? A: As I said earlier nearly 3,900 cases were filed with the Tribunal some of which were claims raised by Iran against the U.S. government such as violation of Algerian Declarations by Washington which was a sophisticated legal issue. Of course out of 3,900 cases, 2,880 cases were small (worth less than 250,000 dollars) and the rest were big claims such as claims for physical properties (group a), claims against contracts on sale of goods and properties to Iranian state-owned companies (group b) and ordinary claims. As you can see a considerable part of our litigation in the Tribunal was defense against U.S. complaints or rejoinder to such bills and another part was the filing of the Iranian petitions against American companies. As I said the majority of claims were raised by American companies or real persons or plaintiffs and the Iranian government departments performed as defendants in the tribunal and had to defend. Each American claimant had hired one or several legal officers to advance its programs so that hundreds of American and non-American legal institutes were representing the American plaintiffs in the Tribunal. Since Iran was a defendant in the court it was obliged to act in a concentrated manner. In other words if in a case or defense they were defending they had to ensure that they had not damaged another case and worked against our own interests. As a result the defense by Iranian lawyers in the Hague Tribunal was performed in a very delicate and sensitive manner in the past 17 years. Although the Iranian government departments were defendants against American plaintiffs and they were assigned to collect necessary documents and evidences, but it was necessary to coordinated all such litigations to protect the Iranian major interests and such a coordination was performed by the Department of International Legal Services (ILS). Beside that duty, ILS was assigned to defend against violation of the Algerian declarations or other misinterpretations by American plaintiffs. By employing the lawyers and legal consultants, ILS succeeded to discharge that duty in a satisfactory manner. Our legal consultants which still continue to work with us are outstanding lawyers, professors, senior retired judges and other scholars who have joined ILS to make such defense and they have discharged their duties with dedication, a sense of responsibility and a national zeal. In other words they have discharged their Islamic and national commitment against the country and have acted successfully against American legal institutes. meanwhile besides the legal consultants that have been hired by ILS, we profited from the lawyers of government departments who assisted us with all devotion and dedication. Although due to an anarchy erupted immediately after the victory of the revolution and repeated changes of persons in change of files, the collection of documents and evidences was a very difficult task, but thanks to the serious and determined efforts of these lawyers and staff and strong defense against the plaintiffs under the supervision of ILS they performed very well. Besides supervision and coordination of defenses or filing petitions about various cases and direct intervention in the claims between the two governments when the two sides agreed to settle their dispute, ILS helped the Iranian party to achieve a suitable result. In other words thanks to its expertise and dexterity in handling of various cases and possession of information on the circulars and judgments of the Tribunal, they advised and assisted the Iranians outside the Tribunal. In other words although the final decision about the figures and settle of cases rested with government departments, ILS which possessed information and experience by handing similar cases effectively assisted in the coordination of the litigation process and offered necessary guidance according to its vested duty in order to protect the nation's interests. Q: Considering the fact that the sums were enormous, did you pay high legal fees to the lawyers and consultants? A: In Iran, the legal fee is determined by the demand (amount of the claim). The more the demand the higher the fee would be. Whereas the Iranian lawyers received their fees on hourly basis. Thus the legal fees for a case which covered several billion dollars and that which covered a few thousand dollars were not the same. The payment arrangement to foreign lawyers was the same (on hourly basis) not based on the demand involved. Here I would like to thank all the lawyers and barristers who worked sincerely with ILS during the litigation process. Q: Did Iran pay damages to the U.S. hostages against hostage taking? If yes, how much did the U.S. administration receive? A: After the hostage-taking, the American government filed a complaint at International Court of Justice (ICJ) against the Islamic Republic of Iran which briefly said that the Iranian leaders and government were responsible for the hostage-taking because of defending, endorsing and encouraging the deed and that Iran was responsible internationally for acting contrary to the Vienna Convention on the protection of diplomatic places and diplomatic rights. Moreover they said Tehran had acted against the Treaty of Friendship signed in 1955 with Washington about economic and consular relations between Iran and the United States. Of course Iran did not take part in the litigation and the foreign minister of the time wrote several letters to the ICJ and said that the hostages had been held by the Students Following the Imam's Line and that it was not a separate issue and should be dealt with against U.S. interventions and crimes committed by its vassal (Shah) in Iran. Although Iran did not attend the ICJ, the international court continued its work and eventually condemned Iran and said that Iran was responsible for the hostage-taking issue. The judgment said that although the former U.S. embassy in Iran was not seized by the Iranian government, but since the government had endorsed the action and had not taken action to keep the embassy and its staff immune from anarchy it was responsible and should pay damages to Washington. But the amount of the damage was made subject to the agreement of the two sides. Should the two sides fail to reach agreement, then the Tribunal would make its own assessment in the next stages and decide the amount. When the question of hostage-taking was raised with the Iranian government, Iran said that the first condition to return the hostages was that Washington should cease to claim any damages in the future. All these conditions have been cited in Paragraph 11 of the General Statement in the Algiers Declaration and Washington committed itself to withdraw its petition from ICJ simultaneously with the release of the hostages and that later on Washington or American citizens should not demand any damages against seizure of the former U.S. embassy and the hostage taking. Thus in reply to your question I must say that Iran has paid no amount in damages against the hostage issue or the hostages or their families or to the American government. Moreover, the U.S. government has agreed to prevent any claim raised in that connection. This is one of the strong points in the Algiers Declaration. Meanwhile we have learnt that the U.S. government set a special commission and had paid damages to the hostages and their families which case is unrelated to Iran. Q: What is the balance of Iranian guarantee deposit in the Algerian Central Bank? A: The Iranian guarantee fund against the Hague Tribunal is around 1 billion dollars which has been deposited out of funds released by the U.S. government in the name of the Algerian Central Bank. This account is supervised by the Dutch Settlement Bank and the Tribunal reimburses American defendants out of that account when it issues a judgment in their favor. At first the Americans thought that few months after the formation of the Hague Court of Arbitration that guarantee fund would be exhausted and Iran would be obliged to refill it, but thanks to the endeavors and resistance of the Iranian lawyers and barristers against American claims in the Hague this has not happened and Iran has never refilled that guarantee fund. On the contrary that account is regularly fed by money that Tehran recovers from Washington and at several instances it has exceeded that amount. In short as I said before about 2.14 billion dollars has been paid out of the guarantee account to American plaintiffs by the Hague Tribunal and presently about 148 million dollars (deposit plus interest) in that guarantee account exists which according to the Algiers Declaration will remain until the Tribunal dispenses with its business and the balance should then be returned to the CBI. As you can see the balance is less than 500 million dollars and has remained in the same condition for several years. In 1994 for the first time that balance remained less than 500 million dollars and Iran did not take any step to refill it. Washington then protested saying that according to the Algiers Declaration, the CBI had undertake to keep that balance to 500 million dollars but Iran has not discharged that obligation. Meanwhile we believed that the total remaining claim against Iran is far below 500 million dollars and even if Iran is condemned for the rest of the lawsuit (which is a remote chance), still it will not need 500 million dollars to settle its debit with the U.S. government. But Washington is not satisfied and has filed a complaint against Iran and claims not raising that balance to 500 million dollars is a breach of the Algiers Declaration. This dispute is pending in the Hague and no judgment has been issued as yet. Q: What is your assessment of the Algiers Declaration and the position of Iran versus the Hague Tribunal? A: Over 18 years have passed since the inking of the Algiers Declaration and 17 years since the formation of the court of arbitration and during this period we have faced much ups and downs. Despite a series of weak points in Declarations Iran is enjoying several strong points including the following: Over 400 big claims were made against Iran and the Iranian government departments by American courts and several billion dollars in Iranian assets were frozen by Washington and the case was referred to the Hague. What is certain had such cases been arbitrated in U.S. courts it would have been more damaging for Iran because both the plaintiffs and the judges would be Americans and if we had to hire lawyers we should have hired American lawyers and the anti-Iranian sentiment hanging in America at that time would have influenced every topic.
Moreover since Washington was denying visa to Iranian citizens and government employees, naturally we could not closely supervise the litigation process to attend the U.S courts. At times even it was necessary for government representatives or lawyers to negotiate with American claimants and such meetings were arranged in Europe. Whereas in the Hague only three judges were Americans, against three Iranian judges and three other judges from neutral countries making a total of 9 judges. Moreover we can speak in Farsi (Persian), defend or file claims in that language. The Algiers Declaration helped to release billions of dollars in Iranian assets in the American banks and their return to the CBI.
Washington undertook in the Algiers Declaration to refrain from directly or indirectly interfering in the country's internal affairs both from military or other points of view. Since this commitment has been made in an international treaty it is strong and binding and since an international court or the Hague Tribunal is handling the matter in case of breach of such commitments, we can complain with the court and demand compensation. The same thing happened when the U.S. Senate allocated funds against the Iranian security contrary to international norms or took other hostile steps and we complained to the court at appropriate occasions and the cases are being arbitrated in the Hague. In fact it is the Algiers Declaration and the Hague Court of Arbitration which have helped us to take legal action against the U.S. or to lodge a series of diplomatic and political protests. The opening of 1 billion dollars guarantee account in the Hague for payment of Iranian dues might appear a weak point in the Declaration, but a careful study shows that this is not a weak point and is a credit because, in case that guarantee fund did not exist due to large number of complaints the U.S. plaintiffs could easily persuade the Hague or local courts to freeze any Iranian funds in the U.S. Such complaints would have been filed by U.S. plaintiffs and would confiscate Iranian passenger planes and ships in all the points in the world, whereas the Declaration calls on claimants to await the final verdict of the Hague and to withdraw their credits from the guarantee fund. Meanwhile the Declaration stipulates that the balance of the fund should be returned to the CBI when the Hague dispenses with its business. The range of operation of the Hague Court of Arbitration has been expressly defined and limited in the Algiers Declaration and such clauses only allow a certain lawsuit to be raised in the international court. Moreover Iran has the right to retort to the plaintiff's complaints and the Iranian government profited from the court to lodge its own claims against the U.S. and there is no limit set for the duration of the complaints made in the court against the American government. Regarding the defense of Iranian claims in the Court I must say that our lawyers and legal consultants really took much pain in their struggle and they won the war against hundreds of very strong U.S. law firms. I don't think it is necessary to give details about this issue and I would suffice to quote a commentary by a lawyer. In his book called "The Court of Arbitration for Iran-U.S. Claims", published with the assistance of a reputable international legal institute in Germany, Prof. Khan says: "Sensitive political issues were raised by the two parties in the Court through outstanding lawyers. By relying on conventional and traditional legal principles and norms and while claiming its owns dues, a Islamic revolutionary republic has defended its case in a very skillful manner and has had no problem to deal with the leaders of the capitalist world." Back to top