UK Dodges US Sanctions to Settle Iranian Bank’s $1.6bn Damage Claim – ReportsCC BY-SA 2.0 / Cary Bass-Deschenes / Cary Bass-Deschenes UK Supreme Court buildingBusiness01:45 06.10.2019Get short URL7382Subscribe
Britain reportedly used a third country to avoid US sanctions as it settled a £1.25 billion damages claim with Iran’s Bank Mellat.
Bank Mellat, where the Iranian government owns a 17% stake, sued the government over British sanctions imposed in 2009 that prevented it from doing business with the UK’s financial sector, with the settlement reached only in June 2019 after ten years of negotiations. Bank Mellat argued that the UK’s actions “substantially damaged the bank’s reputation” and led to the loss of profits, customers and access to international banking services. The bank originally sought £3.2 billion ($3.9 billion) but this fell to £1.25 billion ($1.6 billion) with interest.
The Supreme Court ruled in 2013 that the sanctions were illegal and the government’s response was irrational and disproportionate.
The payment was made through a third country to evade US sanctions, which have in effect cut Iran off from the global financial system. The US reimposed sanctions on Bank Mellat along with other Iranian entities in October last year.
Iran’s Ambassador to London Hamid Baeidinejad confirmed on Friday that the UK government has made the payment to the Iranian side, describing the procedure as an important legal success for the Islamic Republic of Iran.