Britain pledges to pay back £400m debt owed to Iran

The debt dates back to the sale of tanks to the shah of Iran in the mid-1970s

The UK Foreign Office said on Tuesday that it was continuing “to explore options as a matter of urgency to resolve” the repayment of a £400 million ($542m) debt owed to Iran.

It said that the UK had always been committed to paying the debt.

On Monday, UK Foreign Secretary Liz Truss and her Iranian equivalent Hossein Amirabdollahian spoke by phone.

Ms Truss hoped Britain would soon be in a position to pay the debt overdue to Iran, Mr Amirabdollahian said.

The UK government has been exploring legal ways to pay the historical debt, although international economic sanctions on Iran have made it difficult.READ MOREWhy the Iran and Ukraine issues cannot be viewed in isolation

With talks on the Iran nuclear deal reaching a decisive stage in Vienna, it is possible that Ms Truss wanted to stress the positives of both sides reaching a deal.

The two countries insist that the debt — dating back to the sale of tanks to the shah of Iran in the mid-1970s — has always been independent of the Vienna talks and the fate of three British dual nationals held in Evin prison, or the detainment of Nazanin Zaghari-Ratcliffe in Iran.

Mr Amirabdollahian said the tone of the call appeared to have been warmer than for some time, with Iran eager to see the UK do more to help with the Afghan refugee crisis on its borders.

The Iranian Foreign Ministry said Ms Truss praised Tehran for housing as many as two million refugees.

“Amirabdollahian positively assessed the relations between the two countries,” the ministry said.

Richard Ratcliffe, the husband of imprisoned Nazanin Zaghari-Ratcliffe, and their 7-year-old daughter Gabriella hold up pictures of Nazanin in Parliament Square in London to mark the 2,000 days she has been detained in Iran. AP

It may have been significant that the Irish Foreign Minister, Simon Coveney, was in Tehran on Monday. He has acted as a conciliator on political prisoner issues in the past.

In the UK Parliament last month, Prime Minister Boris Johnson again blamed the threat of sanctions for the block on the payment.

The Vienna talks will mean many of sanctions could be lifted, but it has been said that the UK has been responsible for its own sanctions laws since Brexit and so could pay the debt now if it were not tied up in a wider negotiation.