The US wired $1.7 billion dollars to Iran at the same time Iran agreed to release 5 American prisoners. The US claims that it is not ransom, but a prisoner swap, as 7 Iranian prisoners were released as well. The US reports that $400 million is part of an Iranian purchase of weapons during the revolution in 1979. The weapons were never delivered because the revolution ended shortly after the purchase. The remaining $1.3 billion consists of interest and a dispute of the value of the original amount. The US is excited about this deal because they claim that the $1.7 billion is a lot less than what they could have been liable for if negotiations and arbitration were in the US's favor. However, this remains a controversy because of the timing of the events, making the transaction seem like ransom.
The whole transaction is very questionable. Why has the US had this money since 1979 and is just now paying it back? Why, during the over 3 decades that the US has had the money, is the day they decide to pay it back just happen to be the same day 5 prisoners are released? And if it was really a prisoner swap, why was it not even? Why did the US return 7 Iranians and drop extradition charges of 14 others? Also, why did the US originally report only the original $400 million had been payed, when in actuality, due to outrageous amounts of accrued interest, it was actually $1.7 billion? It seems that the US continues to lose ground with Iran. They are looking weaker and weaker while Iran gets gutsier. If in fact this does turn out to be a ransom payment, the US will have practically lost all foreign respect. Americans outside the US will be at risk because countries will target them for ransom payments. Major international problems can start like this. One minute it is simply a return of a country's money, the next people are targeted for ransom everywhere. It is hard to feel safe when the US is potentially paying ransom. Everyone should be concerned.
The current situation of the suspect payment connects to the Barbary Wars of 1801-1805 and 1815-1816. The Barbary states were North African countries that conducted piracy for tribute payments (like ransom). After the American Revolution, the British navy no longer protected Americans, in fact, they told the pirates that the US Navy was weak and susceptible to attack. Algeria, on of the Barbary states, then waged a full on war against the US, capturing several US ships and demanding payment. The US payed ransom and freed 83 sailors. However, in 1812, Algeria claimed the tribute too small and declared war again. The US was preoccupied with the War of 1812 against Britain to deal with Algeria, but post-1812, the US became a stronger power to contend with. They captured hundreds of Algerian sailors as prisoners of war. After a prisoner swap and treaty with Algeria, the US discontinued ransom and tribute payments. Like with Algeria, the ransom/not ransom payment to Iran could open a whole mess of issues that the US is not prepared to deal with as demonstrated by the fumble of Iran's money and the prisoner swap.
Source: http://www.wsj.com/articles/u-s-payment-of-1-7-billion-to-iran-raises-questions-of-ransom-1453421778
https://history.state.gov/milestones/1801-1829/barbary-wars
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