US: We have paid Iran $1.3 billion in interest in 13 installments

The United States government claims it paid $1.3 billion in interest to Iran regarding the resolution of a military contract dispute dating back to the Shah's era in January of this year, just two days after sending $400 million in cash to Tehran. Elizabeth Trudeau, spokesperson for the US State Department, stated on Wednesday, September 3, that Washington cannot provide further details about the payments made on January 19 due to diplomatic sensitivities. According to the Associated Press, the US made this payment in 13 separate installments, each amounting to $99,999,999.99, plus a final installment of $10 million. The US Treasury has not explained why the payments were made in amounts below $100 million. This money represents the interest on a $400 million military contract between Iran and the US prior to the 1979 revolution, which was not executed due to the fall of the Shah and the severance of diplomatic relations between the two countries. On January 17, the US sent the principal amount of $400 million in euros, Swiss francs, and other foreign currencies, in cash and in wooden boxes, to Iran. The method of this payment sparked significant reactions, particularly among Republican critics of the Obama administration. The simultaneous sending of this money to Iran and the release of dual-national Iranian-American prisoners by Tehran raised suspicions that some sort of deal had been made between the parties. Republicans claim that the US government 'bribed' to secure the release of these prisoners. However, the Obama administration has recently denied this claim, stating that the timing was coincidental and that the $400 million payment belonged to Tehran. The US President emphasized that since Tehran and Washington have no banking relations due to years of sanctions stemming from Iran's nuclear activities, the money was delivered in this manner. Meanwhile, the Associated Press reports that the US government could have made the payment to Iran through an intermediary bank, referencing a meeting last week where a US official involved in the negotiations mentioned that a foreign central bank was used to pay the interest owed to Iran. This official, who requested anonymity, did not clarify whether this amount, like the $400 million principal of the military contract, was given to Iran in cash or through banking mechanisms. The Associated Press adds that the money paid to Iran was drawn from a fund in the US Treasury about which little is known. This fund is referred to as the 'Arbitration Fund,' which is funded by taxpayer money, and Congress has stipulated that the President can use it to settle legal disputes without needing authorization. The US also paid $287 million from this fund to Iran in 1991 due to a legal dispute. While the Obama administration has denied any connection between the release of Iranian-American prisoners and the payment of $1.7 billion to Tehran, Mahmoud Alavi, the Minister of Intelligence of the Islamic Republic, confirmed this connection on a television program on Tuesday night. According to ISNA news agency, he stated, 'During negotiations that we had with the approval of the Supreme Leader and the decision of the Supreme National Security Council regarding the exchange of Iranian and American prisoners, we obtained concessions for the country, one of which was the return of this $400 million.' Mr. Alavi added, 'We returned this $400 million along with $1.31 billion in interest to the country, and we hope that the government and its diplomacy will succeed in recovering that money from their grasp.' This claim by the Minister of Intelligence comes as the US officially announced the delivery of money to the Islamic Republic last December.