$400m payment to Iran contingent on release of American prisoners says US State Department

The $400m (£303m) cash payment delivered to Iran in January was contingent on the release of three Americans prisoners being held, the State Department said. Negotiations regarding the cash payment were conducted separately from the negotiations regarding the prisoners, affirmed spokesman John Kirby.

Kirby told The Associated Press that the US withheld the delivery of the cash payment as leverage until three of the four US prisoners were released and allowed to leave Iran. Both the release of the prisoners and the delivery of the payment occurred on 17 January.

The State Department spokesman made the statement following a report by the Wall Street Journal that revealed US officials would not allow Iran to take the $400m until the three prisoners left the country, The Hill reported. According to the report, after a Swiss Air Force plane with the three Americans left Tehran, an Iranian cargo plane with the cash payment was allowed to leave Switzerland.

A fourth prisoner freed in January was released separately.

In early August, the State Department and the White House denied rumours that the payment was ransom for the US prisoners. The payment was the first installment in a $1.7bn (£1.29bn) settlement to resolve claims over a failed arms deal during the time of the Shah. Iran originally sought more than $10bn in arbitration at an international tribunal at The Hague.

The cash payment was to repay money the Iranian government under the Shah paid into a US account in 1979 to procure military equipment, White House Press Secretary Josh Earnest said on 4 August. The US never delivered the equipment to Iran because the Shah was overthrown.

The US agreed to pay Iran the original $400m as well as $1.3bn in accumulated interest. However, officials have not clarified how or whether the interest has been paid to Iran, ABC News reported.

The handling of the payment has caused many Republicans to question whether the payment was actually ransom. House Speaker Paul Ryan said earlier in August that the payment confirmed "our longstanding suspicion that the administration paid a ransom in exchange for Americans unjustly detained in Iran."