Iran still Suffers from the illegal Diplomatic Hostage-Taking of 1979 (Azad)

Armin Azad writes in a guest column for Informed Comment

For more than three decades, there has been a government-organized demonstration in front of the former US Embassy in Tehran on November 4, though this year the rally was held early. The crowd gathers there to mark the anniversary of the militant Islamic students’ seizure of the Embassy on that day in 1979. In retrospect, the taking of the hostages might have served the short-sighted domestic political agenda of some radical politicians in the Islamic Republic at the time, but Iran as a country has paid an extremely high cost for this act – both in political and financial terms. The international community viewed this act as unacceptable and clear violation of existing international conventions, norms and codes of behavior. To this day, the political standing of Iran continues to suffer from it. Financially, as will be demonstrated below, the losses have been enormous. Counting the costs in this way, one wonders about the sense of trying to present such an obvious loss as a victory and celebrating its anniversary.

The Algiers Agreements of 19 January 1981 formally ended the hostage crisis. Four conditions – previously recognized by Iran as preconditions for the release of the hostages – established the basis for negotiation of these accords. They were: non-intervention of the US in Iranian affairs; release of the Iranian assets that had been frozen by the US after the hostage crisis; revocation of the economic sanctions imposed against Iran, along with the return of the Shah’s assets and properties.

I do not intend to conduct a detailed analysis of the outcome of these agreements; nevertheless, relatively speaking, it is fairly evident that the Iranian government got the short end of the stick in terms of the implementation of these conditions – in the face of American imperatives – over the years. For example:

Non-Intervention: the US pledged that it would not intervene “directly or indirectly, politically or militarily, in the internal affairs of Iran”. The history of Iran – US relations during the last three decades, however, shows that this provision was never respected. Relations between the two countries have gone from one crisis to the other.

Return of Iranian assets: the total value of Iranian assets in the US at the time the Algiers Agreements were signed was estimated at about $12 billion. The terms of the Agreements on this point were drafted in a such a way that before any money could be reinstated to Iran, a large sum was taken for the repayment of loans previously given to Iran by US banks. $1 billion was also transferred to a security account set up to guaranty the payment of future awards issued in favor of US claimants. The sum that Iran ultimately received was about $4 billon, that is, only about one-third of its original deposits.

The Algiers Agreements also created the Iran-US Arbitration Tribunal for settlement of commercial claims by Iran and US and their nationals. A careful look at the parts of agreements concerning the tribunal, leaves little doubt that the establishment of tribunal was essentially for the settlement of claims by US nationals. Indeed, the vast majority of claims were by US companies against Iran. For the first time in the history of arbitration, a mechanism was devised that provided full security for the payment of awards issued in favor of one party, i.e. the US. The other party, Iran, did not enjoy the same privileges. The Tribunal was an extremely costly exercise and Iran was responsible for most of the bills. Only until 2003, Iran had paid about $2.5 billion to satisfy the tribunal’s awards in favor of American claimants.

Return of the former Shah’s assets and properties: the precise value of the Shah’s assets was a subject of controversy. Iranian authorities put its value at $90 billion, while the spokesman for the former Shah gave the figure of $200 million. However, according to the Algiers Agreements, in order to recover these assets, Iran had to file suits in U.S. courts. The U.S. administration was supposed to provide information to Iran about the whereabouts of these assets. In practice, locating the assets and properties of the Shah proved difficult. Accordingly, Iran has not been able to recover a single dime from them.

Trade sanctions: the United States committed itself in the Algiers agreement to “revoke all trade sanctions which were directed against Iran in the period November 4, 1979 to the date of signing the agreements”. Thereafter, the US trade sanctions against Iran were supposed to be officially ended. However, not long after that and for different reasons, the US introduced a series of new sanctions against Iran. Gradually, the number of sanctions, as well as the reasons for them, has increased. More recently, as a result of the Iranian nuclear problems, Iran is now under one of the most comprehensive systems of sanctions ever introduced against a country.

Other than these huge financial losses, the hostage crisis dramatically changed the political landscape in Iran-US relations. The two countries have had no formal diplomatic relations since then and as it was mentioned the relations between them have gone from one crisis to the other.


Armin Azad is a former Iranian diplomat now living in Europe

Posted in Iran | 9 Responses | Print |

9 Responses

  1. “The international community viewed this act as unacceptable and clear violation of existing international conventions, norms and codes of behavior.”

    Which it certainly was.

    “To this day, the political standing of Iran continues to suffer from it.”

    As it should, since Iran has never offered an apology or restitution for its egregious violation of centuries-old diplomatic norms and protocol.

    “Counting the costs in this way, one wonders about the sense of trying to present such an obvious loss as a victory and celebrating its anniversary.”

    Some cultures value martyrdom more than victory. Serbias’s most important national holiday, for example, celebrates a defeat at the Battle of Kosovo in 1389. Perhaps Iran would rather celebrate the event that has brought it worldwide condemnation, rather than make amends for its egregious violation of international diplomatic norms.

  2. I can’t see any conclusion in your article. What if the hostage crisis didn’t happen, would we have seen better US-Iran relationship? I don’t think so.

    • I think the US has used the hostage crisis as the chief reason it won’t establish diplomatic relations (recognize the legitimacy of the Islamic Republic) with Iran while other Western countries have.

  3. Bill, I hope you don’t really think “illegal” has anything to do with the outcome. USA has done a lot worse. How legal was it, for example, to invade Panama to get rid of their former employee Manuel Noriega, then imprisoning him after a very shady trial? How legal was it to shoot down an Iranian passenger plane over Iranian territory? How legal was it to bomb the largest pharmaceutical factory in Sudan?

    USA is just a bigger bully, that’s all, and based on how USA had acted in Iran before there is no reason to think it would have treated Iran any better without the embassy occupation.

  4. Are there international agreements against the use of embassies for military purposes as in Libya? While not trying to excuse Iran, given our long term involvement in determining their government for them I suspect their reaction to the embassy was understandable if not acceptable.

  5. Dear Bill,

    Orchestrating coup d’etat is against diplomatic norms as well. The Iranian action, though unpleasant, deprived your country of a base to continue it’s pursuit of the overthrow. The break-off of the diplomatic relations was essential to this end contrary to the Azad’s arguments.
    Your country will NEVER get an apology. And the celebration of that day of victory is a reminder that 30 years ago you were the masters in the Middle East without spending a dime but today you can not walk free alongside your fundamentalist pals in Libya, just ask Stevens.

    • “Orchestrating coup d’etat is against diplomatic norms as well. The Iranian action, though unpleasant, deprived your country of a base to continue it’s pursuit of the overthrow.”

      The overthrow of what, and of whom, Amir? The United States had withdrawn support for the Shah, and when he was overthrown, the US under President Carter did not want to allow him into the United States. The US was not “continuing its pursuit” of the overthrow of anyone in Iran at the point at which the Embassy was attacked and diplomatic personnel taken hostage.

  6. What a disgusting comment. The USA is a serial aggressor and never pays any kind of reparations. It had an agreement with Iran (secretly of course with Reagan ensuring that Carter lost the 1980 election to him) but did not keep its side of the bargain. To pretend Iran is some sort of criminal state, while supporting the USA’s cruel,illegal and unjustified present sanctions on the Iranian people is typical of “exceptional” mercans.

  7. The significance of the hostage crisis is that it clearly showed the point at which Iran left the orbit of U.S. control. Since then Iran unlike, say, Saudi Arabia, acts independently and thus compromises U.S. power.
    “The conflict the US and Israel has with Iran springs from the exigencies of geopolitics rather than ideology: Iran’s age-old ambition to be recognized as a–or the–regional hegemon versus the determination of the U.S. and Israel to foil its ambition and preserve their regional preeminence. Many informed Israelis freely acknowledge this reality. For example, according to Eliezer Tsafrir, former head of Israeli intelligence in Iran and Iraq: ‘However ideological and Islamic, everything Iran was doing was nationalistic, and even similar to the Shah’”.
    link to

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