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  May 13, 2016

Iran Moves to Sue U.S. Over $2 Billion in Frozen Assets

Tyler Cullis, Legal Fellow at the National Iranian American Council, says US-Iran feuds should be dealt with in bilateral negotiations; the objective priority should be to ensure that the nuclear deal is secured beyond the Obama administration
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SHARMINI PERIES, TRNN: It's the Real News Network. I'm Sharmini Peries coming to you from Baltimore.

Iran is preparing to take legal action against the United States to recover nearly $2 billion worth of frozen assets that they are barred from recovering. The U.S. is citing the 1983 bombing of U.S. Marine barracks in Beirut, and the 1996 Khobar Towers bombing in Saudi Arabia for taking such actions or barring access to these funds. Iran denies playing any role in these attacks, and Iran's foreign minister, Javad Zarif, called the decision highway robbery and sent a letter to the United Nations Secretary General asking for UN intervention to stop what he called Washington's unlawful act. They money belongs to the central bank of Iran, but had been blocked under U.S. sanctions. Now Iran says they will likely take the case to the Hague-based International Court of Justice. It is all getting rather heated. The challenge here is to secure the nuclear deal with Iran, and the agreement's viability beyond the tenure of the Obama administration, says our next guest, Tyler Cullis.

Tyler Cullis is the legal fellow at the National Iranian American Council, and he has notable expertise and citations on the issue of sanctions. Good to have you with us, Tyler.

TYLER CULLIS: Good to be here as well.

PERIES: Tyler, so let's begin with the recent developments between the U.S. and Iran that is posing the challenges to the viability of the nuclear agreement.

CULLIS: Well, right now Iran is preparing a lawsuit before the International Court of Justice regarding what it perceives as an abridgement of its sovereign immunities. What we have is a few weeks ago the Supreme Court decided a case. The question before the court was a narrow one, and that question was can Congress take action to change the applicable law and effectively predetermine an outcome of a case pending before the Supreme Court. And that case was an important one, because in that case what Congress had legislated was that it had changed the operative rules for determining beneficial ownership of funds, and had said $2 billion in an account in New York were funds in which Iran had a beneficial interest, and as such could be turned over to U.S. plaintiffs that had outstanding lawsuits related to terrorism-related judgements against Iran. So this would be the first substantial payout to U.S plaintiffs regarding terrorism-related judgements in close to 20 years. And this would be on the order of something close to $2 billion.

We can see why this would frustrate Iran at a time in which Secretary Kerry is talking about the fact that Iran has only been able to repatriate $3 billion of its overseas oil revenues. So as the sanctions relief is minimal, the benefits are minimal of the sanctions relief on the Iranian end. At the same time we're seeing the turnover of billions of dollars from Iranian pockets to U.S. persons. And that is causing no insignificant amount of consternation in Tehran, to such a point that we are seeing Tehran seeking international bodies to intervene on its behalf.

PERIES: So Iran has asked the UN as well as they have appealed to the Hague court, and they have galvanized 120 non-aligned countries to back their position, which is to deem the U.S's action illegal. Do you think the United Nations is the venue to have this battle?

CULLIS: No, I don't think it is the appropriate venue. I happen to agree with the United States on this issue. And what the United States has said is look, we have a bilateral channel of communication. If the Iranians have a concern, they should talk to us. And I think that's true, to some extent. I think there is a channel, and it is available. And to be honest, you know, there is a significant problem here. On the one hand you have, we're talking about the turnover of $2 billion of Iranian assets to the United States. But U.S. plaintiffs hold outstanding judgements totaling over $50 billion against Iran. And vice versa, a point that is often forgotten is that Iran has its own [statute] that subjects the United States to lawsuit in its own court for international law violations. And there we see a similar amount, close to $50 billion outstanding in Iranian courts against the United States.

What does that mean? I mean, to me that is the perfect case for a claims settlement process in which the U.S. and Iran figure out how they're going to resolve pending claims before their courts in such a manner as to not make this a significant issue in the future. And I think that's the real danger of what the court case is, is that it's the first time in close to 20 years in which this issue has been a problem in which there's been a substantial payout. And the problem with paying out plaintiffs, paying out some of these claims, is that it complicates any claim settlement process because from the Iranian perspective they're going to need to be recompensed for those $2 billion, or else there's no real claims settlement that can take place. So I agree with the United States to the extent that it is, should be, the subject of negotiation. Hopefully the United States is willing to negotiate the subject. But you know, there is a solution on the table, and we can talk more about what that solution is, and it's just a matter of getting the parties to the table to talk about how do they get there.

PERIES: Now, you have argued that the challenge here is really the survival and the viability of the Iran nuclear deal, with the P+5. Tell me exactly how the survival of the nuclear agreement could be dealt with, and getting these bickerings out of the way, and provide some clarity in terms of how we need to proceed with the implementation of the agreement.

CULLIS: Yeah, I think the problem this poses to the nuclear deal is that it adds another, it adds a negative to the atmosphere surrounding it. You know, it was a hope that after the nuclear deal what we would see is the emergence of a positive trend line in U.S.-Iran relations, that the nuclear deal would be a stepping stone to a broader rapprochement between the U.S. and Iran. I think there's people both inside the United States and inside Iran that would like to see that happen.

Unfortunately the atmosphere in the post-deal environment has been, you know, toxified to some extent. You know, we see Congress trying to pass new legislation, imposing sanctions on Iran. You have Iranian ballistic missile tests, some of which are, you know, incendiary with some of the stuff they're writing on those, on their missiles. We see this turnover of $2 billion. We see Iran's difficulties receiving practical value from the sanctions lifting. So all these things added together really pose a problem. And it poses a problem to the extent that President Obama, who has a commitment to seeing this deal sustained over the long-term, is leaving office in six or seven months. And if this nuclear deal is on shaky ground, you know, it poses a serious challenge for a new administration who may not have the same commitment to the deal.

So it's really important to find solutions to existing problems, and one of those problems is these outstanding lawsuits against Iran and the turnover of assets.

PERIES: So what needs to be cleared out of the way for both parties to come to the table and start having bilateral conversations?

CULLIS: I mean, there needs to be, I mean, the parties need to move towards, you know, a positive trend line. And that means taking over some really small steps at first. You know, one thing that we've talked about here is the United States and Iran engaging in, talking about an incidents at sea agreement. You know, there's a lot of traffic in the Persian Gulf, we saw that with the U.S. sailors that roamed into Iranian waters and were taken, and thankfully returned and the issue was diplomatically resolved quickly.

But you know, the United States had an incidents at sea agreement with the Soviet Union during the Cold War. There's no reason why it does not have the same with Iran, and in fact from what I understand the Pentagon has long been in favor of such an agreement. And that would be a case in which it would not only allow us to resolve problems that may pop up from time to time, but it would also create another channel of communication between the U.S. and Iran. And it's really important, from our perspective, that channels of communication be diversified if we want to see a broader rapprochement between the U.S., between the two countries. It is not enough for Secretary Kerry and Foreign Minister Zarif to have a good working relationship, because at the end of the day Secretary Kerry is not going to be in that position any longer. And the question is how do you resolve problems in which that relationship is no longer there?

So it's really important that we see a diversification in contacts between the U.S. and Iranian administrations so that issues can be resolved, so that there can be more contact between the two, and a lot of those barriers that we see currently will fall away.

PERIES: Tyler Cullis, I thank you so much for joining us today, and we hope to have you back very soon, because I think this is going to be in the news for a while. Thank you.

CULLIS: Thanks so much.

PERIES: And thank you for joining us on the Real News Network.


DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.


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