The Puzzle of Iran's Assets in America After the Implementation of the JCPOA

The announcement of the implementation date of the Joint Comprehensive Plan of Action (JCPOA) has left numerous ambiguities regarding various aspects of the nuclear agreement, including the final determination of Iran's remaining assets in the United States from before the revolution. According to estimates attributed to one of the two official statements of the Algeria Agreement concerning the release of 52 hostages from the U.S. embassy in Tehran, the amount of these assets before being blocked by the U.S. government was about $13.5 billion. Part of these assets was conditionally released by the U.S. after the American hostages were freed and returned to the U.S., while a significant amount of these assets, estimated to be about $3.5 billion at the value of 37 years ago, remains in the U.S. The brief and vague statements from Iranian and American officials regarding this matter, following the announcement of the JCPOA's implementation, have left the puzzle of Iran's blocked assets in the U.S. still unresolved. Following the acceptance of the former Shah of Iran in the U.S. for treatment in November 1979, the U.S. embassy was occupied by a group armed who introduced themselves as 'students following the line of Imam' and took its staff hostage. Jimmy Carter, the then President of the U.S., retaliated by first issuing statement number 4702 on November 12, 1979, banning the entry of Iranian oil products into the U.S. and two days later issuing executive order number 12170, which ordered the seizure of all Iranian assets in the U.S. and at American financial institutions in Europe. After the Iraqi military's attack on Iran in September 1980, U.S. sanctions against Iran increased. Following the hostage-taking at the U.S. embassy, the officials of the Islamic Republic initially introduced this act as separate from the government and student actions, but later Ruhollah Khomeini, the leader of the Iranian Islamic Revolution, called it the 'second revolution' and set conditions for the release of the American hostages, one of which was the return of the Shah of Iran and the other was the release of Iran's assets for the benefit of the Islamic Republic. After the Iraqi military's attack in September 1980 and the occupation of Iranian territory by Saddam's forces, the internal situation of the country changed. The failure of the military operation to rescue diplomats by the U.S. military in Tabas, known as 'Eagle Claw,' on April 24, 1980, due to a sandstorm, weakened Jimmy Carter's position, the political opponent of Iran, in the year of the country's elections. Additionally, the death of the Shah of Iran in Egypt and the rise of revolutionary extremists against the Banisadr group facilitated greater coordination of the government and entry into negotiations with the U.S. regarding the release of hostages. At that time, the financial needs of the new Iranian government to cover war costs and import expenses had made the Islamic Republic willing to receive even part of the blocked Iranian assets. After the Algeria Agreement, Iran's cash deposits, including foreign reserves, bonds, and gold bullion that remained with the U.S. Federal Reserve, were released. According to the Algeria Agreement, a large portion of this money was kept at the Bank of England due to concerns from American banks about them becoming non-dollar reserves and Iran's agreement, to be gradually used by the new Iranian regime. Other assets that were stored in accounts at Chase Manhattan Bank, Citibank, and 16 smaller banks in the U.S. or their European branches were made available to the Islamic Republic. The issue of claims related to military purchases and unilateral contracts that were canceled by the Islamic Republic, as well as deposits that Iran had for this purpose in the U.S., remained unresolved. Additionally, a special account for ensuring the payment of claims, which had to maintain at least $500 million at all times, was opened and made available to the dispute resolution commission (Iran and the U.S.) that was established based on one of the two Algeria statements. The value of this section of claims can be estimated between $2 to $4 billion at their initial figures, and the status of Iran's real estate assets, including 16 properties and 118 small diplomatic and diplomatic accounts, also remains unclear. In 2008, due to the complexity of these accounts and the continuation of Iran's claims, the parliament conducted an investigation into this matter, but the report was only read in a confidential session and its contents were not published. For this reason, the status of Iran's claims, the actual amount of assets paid to the Islamic Republic, the total volume of compensations paid by Iran, and the losses accepted as a result of the cancellation of contracts related to military purchases remain unclear. According to a report from the International Law Center of the 'Presidential Institution,' which was established to conduct negotiations regarding the release of hostages, 9,533 cases have been filed in the Iran-U.S. Arbitration Tribunal, and 1,722 of them have been resolved. By the time of the announcement of the JCPOA's implementation, about 100 major unresolved legal cases were still under review by the Iran-U.S. Arbitration Commission in The Hague, and it is unclear what their status is or will be. These claims could be estimated to exceed $10 to $12 billion if bank interests are paid, while according to brief statements by John Kerry, the U.S. Secretary of State, after the announcement of the JCPOA's implementation, the Islamic Republic was allowed to use $1.7 billion of Iran's claims, which only pertains to $400 million of Iran's blocked reserves from the Algeria Agreement in 1981, plus $1.3 billion of interest accrued on it.