In November 1980, a group of Iranian revolutionary students occupied the US embassy in an attempt to show strong opposition to the hostile and intrusive policies of the United States against the Iranian nation. The students of the University of Tehran who took over the embassy discovered documents which revealed US involvement in coups against the elected government as well as many other cases of espionage plots.
The students of the University of Tehran who took over the embassy discovered documents which revealed US involvement in coups against the elected government as well as many other cases of espionage plots.
In exchange for the release of the American hostages, Iranian students demanded that two things be returned to the Iranian people: the Shah return to Iran to be put on trial for the crimes he had committed against the Iranian nation, and the Shah’s accumulated wealth which was kept under the US Treasury. When the United States refused to comply with these demands, the Iranian finance minister warned the US that Iran would take necessary measures to withdraw all Iranian assets from any US bank. (1)
In that year, Iran’s assets were somewhere around $12 billion, which included $3.518 billion deposits of Iran’s Central Bank (Bank-e Markazi) with American banks in London, $400 million deposits in American banks in Paris, $167 million deposits in American banks in the United States, $300 million Deposits of other Iranian banks with American banks, $407 million deposits of the National Iranian Oil Company, $2.108 billion funds relating to oil sales, $1.1 billion treasury notes of Iran’s Central Bank with the Federal Reserve Bank, $269 million deposits of the Iran’s Central Bank with the Federal Reserve Bank, $800 million trust fund of the Ministry of Defense of the Islamic Republic of Iran, and gold from Iran’s Central Bank with the Federal Reserve Bank equal to 1,632,827 ounces. (2)
In addition, Iran also demanded that “With regard to the other assets and funds of Iran at the disposal of, or under attachment by the American government, American nationals or institutions inside or outside the United States, the U.S. government, in pledging to return all such assets and funds, deposit with the Central Bank of Algeria a guarantee equal to $4 billion . . . as a guarantee of the bona fide discharge of its obligations,” and that “immediately upon the release of the 52 Americans, the aforementioned assets and funds be placed at the disposal of representatives of the government of the Islamic Republic of Iran for transfer to Iran.” (2)
The Carter administration, however, not only ignored the warning (3) but in a bullying move, ordered the freezing and blocking of all Iranian assets held at US banks.(4) The executive order restricted the transfer of any of the Shah’s properties as well as Iran’s assets held by the US treasury and banks, prolonging the hostage crisis. (5) The two countries exchanged a few letters on the matter, however, even after Iran released the hostages, the United States did not keep their side of the agreement to lift the restrictions imposed on Iran’s assets held in America. Even Iranian litigations made against American banks in London and Paris, which held the frozen assets, received no hearing in the courts (6).
Carter based this stance solely in the face of the call made by Ayatollah Khomeini, that the US should apologize for supporting the repressive Pahlavi regime; the American president felt an apology would make him look like a wimpy appeaser. He therefore froze Iran’s assets and stopped importing Iranian oil (7). It is interesting to note that Carter issued this order out of his presidential authority, as most legal and financial experts asserted this fact at the time (8).
So the occupation of the American embassy was the sole leverage for Iran to demand the repatriation of funds. After the release of embassy staff, the two states negotiated the issue of Iran’s frozen assets for years, with no concrete action taken by the American side -- despite having agreed to release part of the assets (9) (10) -- and no deal was reached between the two states (11).
Fierce sanctions have been imposed on Iran by the United States and the European Union under the pretext of the hostage crisis and other accusations against the Islamic Republic of Iran to justify the refusal of both the US and the EU to return Iran’s assets to the Iranian nation (12) (13).
Currently, the amount of Iran's frozen assets has increased to $79.2 billion, due to newly established freezes since 1980, on oil revenues, Iranian foreign investments, sums locked in court disputes, etc. This sum is directly held on US soil or has been frozen by US orders in different parts of the western world (14).
Currently, the amount of Iran's frozen assets has increased to $79.2 billion, due to newly established freezes since 1980, on oil revenues, Iranian foreign investments, sums locked in court disputes, etc. This sum is directly held on US soil or has been frozen by US orders in different parts of the western world.
In July 2015, Iran and the P5+1 reached a deal and drafted the Joint Plan of Action and the United States agreed to unfreeze Iran’s assets as a part of the deal. This could mean the return of portion of the billions of dollars to the Iranian nation. But this repatriation does not include the initial $12 billion which was held post 1979 Revolution and other assets held on US soil which remain disputed. Only $29 billion will be disbursed by the time the deal takes effect and the rest of the assets will still remain frozen (14).
The United States has proven, in the past 36 years, that it could breach the agreement over any possible excuse (15). Moreover, ever since the possibility of unfreezing Iran’s assets has been discussed, the date when the assets will be released and how much they are worth --considering the interest and dollar value after 35 years-- has been disputed (16) (17).
Hence the United States, in an inexcusable manner, froze the assets and properties of the Iranian nation, held them for 35 years, imposed tough sanctions to cripple Iran’s economy -- all of which affected ordinary Iranians-- and now has moved on to set conditions for returning to Iran what belonged to it. What's more, the possible release of the assets faces obstacles and criticism from American politicians (18).
A misplaced fear is still dominating Washington, that the release of funds would make Iran appear more bellicose in the Middle East, while in fact, Iran has not attacked any other country for more than two centuries. In addition, Iran’s military spending is just $15 billion a year, in comparison with the $23 billion spent by the UAE or that of Saudi Arabia, whose military budget stands at more than $80 billion in 2014 (19).
*Mohammad Hosseinzadeh has a MA in political science and a B.A. in comparative studies. He knows public Relations and media. He has written some articles on International Relations published by Fars News Agency and Mehr News Agency in Iran.
1. Amuzegar, Jahangir. Iran's Economy Under the Islamic Republic. London : I.B.Tauris, 1997.
2. Iran Publishes Response to U.S. on Terms for Hostages' Release. The Washington Post. [Online] December 22 1980. [Cited: September 24, 2015.] http://www.washingtonpost.com/archive/politics/1980/12/22/iran-publishes-response-to-us-on-terms-for-hostages-release/eab3901d-1ce3-44b4-82c0-6575a8b588f0/.
3. Prins, Nomi. All the Presidents' Bankers: The Hidden Alliances that Drive American Power. New York : Nation Books, 2014. 156858749X, 9781568587493 https://books.google.com/books?id=klEeBQAAQBAJ&pg=PA313&dq.
4. Executive Order 12284--Restrictions on the transfer of property of the former Shah of Iran. National Archives. [Online] January 19, 1981. [Cited: September 23, 2015.] http://www.archives.gov/federal-register/codification/executive-order/12284.html.
5. Lee, By Karen. Iran-U.S. Claims Tribunal Reports: 2000-2002, Volume 36. Cambridge : Cambridge University Press, 2006.
6. Alikhani, Hossein. Sanctioning Iran: Anatomy of a Failed Policy. New York : I.B.Tauris, 2000. 0857716646, 9780857716644: P. 383. https://books.google.com/books?id=TfgBAwAAQBAJ&pg=PA383&dq.
7. Wawro, Geoffrey. Quicksand: America's Pursuit of Power in the Middle East. New York : The Penguin Press, 2010. 1101197684, 9781101197684.P. 331; https://books.google.com/books?id=OiS9UVotQfUC&pg=PT331&dq.
8. Egan, Jack. Holding the Eurodollar Hostage. New York Magazine. 1979, Vol. 12, 47.
9. Reagan Agrees to Return to Iran Frozen Assets Worth $454 Million. Los Angeles Times. [Online] May 13, 1987. [Cited: September 23, 2015.] http://articles.latimes.com/1987-05-13/news/mn-4265_1_iran-claims-tribunal.
10. World IN BRIEF : IRAN : U.S. Will Return Some Frozen Assets. Los Angeles Times. [Online] November 09, 1989. [Cited: September 23, 2015.] http://articles.latimes.com/1989-11-07/news/mn-945_1_frozen-assets.
11. U.S.-Iran Talks on Assets End Without Accord. Los Angeles Times. [Online] January 01, 1987. [Cited: September 23, 2015.] http://articles.latimes.com/1987-01-01/news/mn-1908_1_iranian-assets.
12. Iran Sanctions. U.S. Department of State. [Online] [Cited: September 24, 2015.] http://www.state.gov/e/eb/tfs/spi/iran/index.htm.
13. Obama signs executive order freezing Iran assets in U.S. Reuters. [Online] February 6, 2012. [Cited: September 23, 2015.] http://www.reuters.com/article/2012/02/06/us-iran-usa-assets-urgent-idUSTRE81519Q20120206.
14. Habibi, Nader. Iran’s frozen funds: how much is really there and how will they be used? The Conversation. [Online] 08 11, 2015. [Cited: 09 26, 2015.] http://theconversation.com/irans-frozen-funds-how-much-is-really-there-and-how-will-they-be-used-45913.
15. End of Sanctions Worth Hundreds of Billions to Iran. The Fiscal Times. [Online] June 29, 2015. [Cited: September 24, 2015.] http://www.thefiscaltimes.com/2015/06/29/End-Sanctions-Worth-Hundreds-Billions-Iran.
16. Nuclear Deal Will Unlock $100B in Frozen Iran Assets. Forward. [Online] July 14, 2014. [Cited: September 23, 2015.] http://forward.com/news/breaking-news/311950/nuclear-deal-will-unlock-100b-in-frozen-iran-assets/.
17. Iran says value of frozen assets at $29bn. Press TV. [Online] July 26, 2015. [Cited: September 24, 2015.] http://www.presstv.com/Detail/2015/07/26/421913/Iran-Frozen-Assets-Sanctions-CBI.
18. MacKenzie, Drew. Sen. Mark Kirk Slams Obama Plan to Release $11.9B to Iran. News Max. [Online] July 21, 2015. [Cited: September 24, 2015.]
19. Parsi, Trita and Cullis, Tyler. The Myth of the Iranian Military Giant. ForeignPolicy . [Online] 08 10, 2015. [Cited: 09 27, 2015.] http://foreignpolicy.com/2015/07/10/the-myth-of-the-iranian-military-giant/.