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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.

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Armin Azad is a former Iranian diplomat now living in Europe