image source,Reuters
Zagari Ratcliffe and Ashuri return to UK after release
Nazanin Zaghari-Ratcliffe, a dual British-Iranian woman, has returned to the UK to join her family after being released after nearly six years in Iran.
She was released with another man, Anoosheh Ashoori, who is also a dual Anglo-Iranian citizen.
Their release has also been linked to the UK’s payment of a 40-year-old arms purchase debt owed to Iran.
Where did the military purchase debts come from 40 years ago?
In the 1970s, the pro-Western royal family that ruled Iran at the time ordered 1,500 Chieftain tanks and 250 armoured rescue vehicles from the UK, with an estimated amount of 650 million pounds.
The money for the arms purchase was paid to International Military Services (IMS), a private subsidiary of the British Ministry of Defense at the time.
But then the United Kingdom only delivered 185 tanks to the Iranian authorities, and the Islamic Revolution broke out in Iran in 1979, and the Iranian royal family was overthrown and stepped down.
The Iranian government has since been trying to recoup the undelivered arms purchases from Britain.
image source,Getty Images
Iran orders 1,500 Emirates tanks from Britain
How does Iran collect debt?
In 1990, Iran sued IMS for arbitration at the International Chamber of Commerce, the international business organization that manages international trade disputes.
In 2001, Iran won the arbitration and IMS appealed, but in 2002 the company agreed to pay the court £328.5 million if the appeal was unsuccessful.
A 2009 appeal ruling upheld Iran’s ruling.
However, the EU had already started imposing sanctions on Iran in 2008, and IMS payments could not be delivered to the Iranians.
How did things develop afterwards?
The British government admits it owes Iran money for not fully delivering the tank equipment, but says Iran is under economic sanctions and has no way to pay.
In addition, the exact figure of how much Britain owes Iran is still inconclusive.
The £328.5 million guarantee paid by IMS in 2002 sparked a lot of controversy, and Britain disagreed over how much of the money should be paid to Iran.
How does this tie into Zagary Ratcliffe?
Zagari Ratcliffe has been detained in Iran for nearly six years since April 2016. She has been charged with conspiring to subvert the Iranian government, a charge she has always denied, saying she is innocent.
Zagary-Ratcliffe said her captors revealed that her detention was linked to Britain’s refusal to pay its debts.
In 2021, then-British Foreign Secretary Hunt said Iran linked her case to debt repayments.
“I think they’re trying to hold Zagary Ratcliffe hostage for the Chieftain debt, and we certainly refuse to link the two because we don’t want to encourage hostage diplomacy,” Hunter said. We have to solve the problem through legal means.”
The British government also does not admit that the cases of Zagary-Ratcliffe and other dual detainees have any connection to the debt.
Prime Minister Boris Johnson in 2021 said, “These are two completely different things.”
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Zagari Ratcliffe’s family asks UK government to step in
How did the two sides reach an agreement to release the people?
Zagari Ratcliffe and Ashuri were released after months of negotiations between the British Foreign Secretary Truss and the Iranian Foreign Ministry.
Another dual national, Morad Tahbaz, was also temporarily released from prison.
Truss also announced that at the same time as Iran’s release of the detainees, the UK will also “simultaneously” resolve the IMS debt.
She said that after “very complicated” back-and-forth negotiations, the British government found a way to pay £393.8 million that did not violate existing sanctions, global counter-terrorism finance measures, and money-laundering laws.
Truss said the terms of the deal were kept secret, but noted that the money Iran received could only be used for humanitarian purposes.