News : Sanctions

Rouhani Contributes to Rhetoric Over US Decision on Terror Compensation

By INU Staff
INU - Last week, the US Supreme Court upheld a lower court’s ruling that domestic judgements against the Islamic Republic of Iran for its sponsorship of international terrorism could be recouped from Iranian assets frozen in US banks. The ruling has since become a clear source of anti-American rhetoric, coming not only from recognized hardliners but also from key figures in the administration of Iranian President Hassan Rouhani, who have been regarded as moderates by some Western policymakers.

According to the Associated Press, Iranian state television quoted the president on Wednesday as saying that the forthcoming seizure of two billion dollars’ worth of assets for approximately 1,300 terror victims and their families constitutes “blatant theft” and is an example of “Washington’s continued hostility against the Iranian nation.”

Similar accusation of hostility have been behind Iranian Supreme Leader Ali Khamenei’s criticisms of the implementation of the July 14 nuclear agreement, which resulted in broad-based sanctions relief but has not had the effect on the Iranian economy that some anticipated. On Wednesday, the supreme leader reiterated these criticisms, saying that the US was honoring the Joint Comprehensive Plan of Action only on paper. “In practice, they scare banks in such a way that they would not dare come near Iran,” he said.

But the Obama administration has simultaneously come under fire from American legislators for specifically moving to address these concerns, as by finding workarounds for Iran’s isolation from the US financial system and even arranging to buy 32 tons of surplus Iranian nuclear material, ostensibly to show foreign businesses that Iran is no longer a global pariah and that it is safe to do business with it.

Last week, US Secretary of State John Kerry met with his foreign counterpart, Foreign Minister Mohammad Javad Zarif on two separate occasions to discuss the issue of improving Iran’s outcomes following implementation of the nuclear deal. But President Rouhani’s comments on Wednesday seemed to indicate that these efforts had not had a noticeable impact on the pace of anti-Western rhetoric coming out of Tehran in general, or the Rouhani administration in particular.

The extent of Rouhani’s rhetoric was arguably left up to the imagination of the listener. That is, the Associated Press points out that he did not elaborate after saying that the US would have to face “all the consequences of this illegal action.” It is possible that this commentary on the Supreme Court decision was meant only to reiterate the earlier threat that Iran would take the US to the International Court of Justice to fight the ruling. But it may also have been meant to evoke the more transparently belligerent rhetoric of the Iranian Revolutionary Guard Corps and others.

It is the IRGC that was responsible for five ballistic missile tests that have taken place since the conclusion of nuclear negotiations. Each of these tests – three of which took place back to back in March – were widely regarded as flouting United Nations Security Council Resolutions banning or calling upon the Islamic Republic to avoid work on missiles capable of carrying a nuclear weapon.

More than that, the defiant tone of the tests was understood to be deliberate, especially in light of the fact that they were accompanied by state media broadcasts of the nation’s missile stockpiles, as well as statements by IRGC officials and the supreme leader boasting of the strength of the Iranian military and vowing to never compromise over missile development. When the US passed new sanctions in response to the first of the five tests, Rouhani joined in this rhetoric, directing his defense minister to greatly expand the ballistic missile program.

A recent commentary at Voice of America placed this missile dispute alongside the issue of access to the US financial system, and now the conflict over the Supreme Court decision, calling all of them major obstacles to US-Iran reconciliation and the long-term success of the nuclear deal. The article made no definitive judgment about which side is in the wrong on these conflicts, but it did provide some analysis of the would-be legal dispute.

VOA points out that the effort to seize Iranian assets is in tension with the principle of “sovereign immunity,” a principle that is safeguarded in US law mainly in order to avoid giving other countries pretense to seize American assets as well. However, the principle is not without its exceptions, and Iran is one of three. In 2012, Congress passed a law allowing for assets seizure in cases dealing with nations that are listed by the State Department as state sponsors of terrorism. Currently, the list is comprised of Iran, Syria, and Sudan.

While this cleared the way for the Supreme Court decision, international law remains as a potential obstacle. Economy Watch noted on Tuesday that Iranian officials are supposedly considering mounting a legal challenge in the ICJ that is based on a 1955 economic treaty between the two countries, called the Treaty on Amity, Economic Relations, and Consular Rights.

That treaty, however, has not been enforced by either country, as it was signed long before the 1979 Islamic revolution brought a new government to Iran. Nevertheless, it may present a viable legal challenge, but Economy Watch also pointed out that many believe Tehran is not serious about taking the US to court, but is merely bluffing and using the incident as an opportunity to score political points.

On this view, Rouhani’s comments on Wednesday were little more than rhetoric, although that rhetoric presents a serious challenge to the future of US-Iran relations, especially seeing as it comes from the supposedly moderate wing of the Iranian government.

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