Iran disputes UK claim that £400m debt linked to Nazanin Zaghari-Ratcliffe release must be spent on aid

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Iran has disputed the UK’s claim that £400m in unpaid debts London handed to Tehran in exchange for the release of several British-Iranian prisoners including Nazanin Zaghari-Ratcliffe had been earmarked for humanitarian spending.

Saeed Khatibzadeh, spokesman of Iran’s foreign ministry, told reporters Thursday that the cash had already been transferred to the treasury and was not being safeguarded by another country.

His comments came after UK foreign secretary Liz Truss said the funds were ringfenced solely to buy humanitarian goods, while The Guardian reported that the debt was paid using Switzerland as an intermediary.

“This money is in complete possession of Iran and the manner of spending the repaid amount is completely subject to the decision of the Islamic Republic of Iran,” Mr Khatibzadeh  said.

Mr Khatibzadeh accused the UK government of “sensationalising” the releases of prisoners Nazanin Zaghari-Ratcliffe and Anousheh Ashoori in an attempt to downplay its handing over the £400m owed to Iran over an unfilled order for 1,500 Chieftain tanks dating back to the 1970s.

"What is most important and central is the receipt of the rights and assets of the Iranian people from the British government,” he said.

Meanwhile, Iran’s hardline news outlets branded freed prisoner Ms Zaghari-Ratcliffe a liar and a spy.

For years Iran insisted that the arrest, prosecution and jailing of the British-Iranian charity worker was a clear-cut case of catching a spy and had nothing to do with friction between Tehran and the west.

But the hardline daily newspaper Keyhan said the UK was “forced” by Iran to repay the debt, suggesting that they were indeed being held as hostages.

Ms Truss said the debt had been paid back “in parallel” with the freeing of the prisoners.

Ms Zaghari-Ratcliffe had been visiting relatives in Iran during the Persian New Year’s holiday in 2015 when she was barred from leaving the country, tried and imprisoned on espionage charges. Mr Ashouri was arrested and charged with being an Israeli spy the next year.

Dozens of Iranian dual nationals and foreign citizens are being held in Iranian prisons or barred from leaving the country in what many regard as attempts to build leverage with western countries.

Javan, a news outlet linked to the Revolutionary Guard, claimed Ms Zaghari-Ratcliffe would now begin “lying” and spreading “propaganda” about her treatment at the hands of authorities.

Another British-Iranian, environmental activist Morad Tahbaz, was released on furlough in Iran as part of the same apparent deal, which comes amid reports of an imminent restoration of the 2015 nuclear accord and a possible improvement in diplomatic ties between Tehran and the west.

Iran’s foreign minister Hossein Amir-Abdollahian was quoted by his ministry’s website as saying he hoped that “confidence-building measures” would improve London-Tehran ties.

“We are closer than ever to the endpoint to reach an agreement, but what can determine a good and lasting agreement is a realistic behaviour by the United States and no new and incorrect demands,” he was quoted as saying in reference to the nuclear deal.

“If all our red lines are observed, we will be ready for a final agreement.”