Published: March 22, 2022
THE CONVERSATION
Following her release from detention in Iran, Nazanin Zaghari-Ratcliffe, held hostage since 2016, said: “what happened now should have happened six years ago”. She was referring to the fact that her release had been secured at the same time as the British government paid Iran a debt it had owed since the first day of her detention – and had in fact owed since the 1970s.
Zaghari-Ratcliffe was tragically used as a pawn in this decades-long dispute over almost £400 million.
My research has explored the history of the Anglo-Iranian arms trading relationship and has found that London continued to be a global hub for Iran’s arms purchasing efforts even after the 1979 Iranian revolution. This is perhaps surprising given what we know about Zaghari-Ratcliffe’s case. Received wisdom is that the UK failed to follow through on arms deals with Iran due to concerns over the politics and provocative actions of the new Iranian regime. These revelations from the archives make this narrative harder to swallow.
A contentious tank deal
Iran was a major customer for British weapons in the 1970s. Between 1971 and 1976, the Iranian government ordered 1,500 Chieftain tanks and 250 armoured recovery vehicles from Britain at a cost of around £650 million. These orders – and the associated funds – were lodged with British state-owned arms company International Military Services Ltd (IMS Ltd).
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At the time, Iran was dramatically expanding its arms purchases, having cashed in on the 1973 oil crisis that saw prices quadruple. The Shah of Iran – the monarch ruling the country – was using the proceeds to pursue domestic modernisation, including through defence and arms procurement. Journalist Anthony Sampson described Iran in the mid-1970s as “the salesman’s dream”. The country spent over US$10 billion on tanks, aircraft, missiles and all manner of weaponry between 1974 and 1976, and planned a further US$10 billion spend by 1981.
Zaghari-Ratcliffe was tragically used as a pawn in this decades-long dispute over almost £400 million.
My research has explored the history of the Anglo-Iranian arms trading relationship and has found that London continued to be a global hub for Iran’s arms purchasing efforts even after the 1979 Iranian revolution. This is perhaps surprising given what we know about Zaghari-Ratcliffe’s case. Received wisdom is that the UK failed to follow through on arms deals with Iran due to concerns over the politics and provocative actions of the new Iranian regime. These revelations from the archives make this narrative harder to swallow.
A contentious tank deal
Iran was a major customer for British weapons in the 1970s. Between 1971 and 1976, the Iranian government ordered 1,500 Chieftain tanks and 250 armoured recovery vehicles from Britain at a cost of around £650 million. These orders – and the associated funds – were lodged with British state-owned arms company International Military Services Ltd (IMS Ltd).
We can help you make informed decisions with our independent journalism.Get newsletter
At the time, Iran was dramatically expanding its arms purchases, having cashed in on the 1973 oil crisis that saw prices quadruple. The Shah of Iran – the monarch ruling the country – was using the proceeds to pursue domestic modernisation, including through defence and arms procurement. Journalist Anthony Sampson described Iran in the mid-1970s as “the salesman’s dream”. The country spent over US$10 billion on tanks, aircraft, missiles and all manner of weaponry between 1974 and 1976, and planned a further US$10 billion spend by 1981.
When the Shah of Iran was toppled in 1979, Britain did not see through on its arms deal. Alamy
The 1979 revolution that toppled the Shah saw the US halt arms sales to Iran. The UK – at least in some regard – followed suit. British tank transfers ceased and the bulk of the 1970s contract went unfulfilled. Only 185 of the Chieftain tanks ordered by the Shah had been delivered.
However, IMS Ltd held onto the Iranian government’s money – eventually said to be around £400 million when interest is taken into account. A long series of legal battles have been fought over these funds.
Zaghari-Ratcliffe was detained nearly four decades later and, over the years, the link to the 1970s tank debt has gradually emerged. Zaghari-Ratcliffe was first told that the connection was being drawn between her imprisonment and the debt by her Iranian interrogators in 2016. Meanwhile, the British government remained cagey and avoided the question of a link. Now, however, it has formally confirmed that it paid the debt in the same statement announcing the release of Zaghari-Ratcliffe and fellow detainee Anoosheh Ashoori.
The 1979 revolution that toppled the Shah saw the US halt arms sales to Iran. The UK – at least in some regard – followed suit. British tank transfers ceased and the bulk of the 1970s contract went unfulfilled. Only 185 of the Chieftain tanks ordered by the Shah had been delivered.
However, IMS Ltd held onto the Iranian government’s money – eventually said to be around £400 million when interest is taken into account. A long series of legal battles have been fought over these funds.
Zaghari-Ratcliffe was detained nearly four decades later and, over the years, the link to the 1970s tank debt has gradually emerged. Zaghari-Ratcliffe was first told that the connection was being drawn between her imprisonment and the debt by her Iranian interrogators in 2016. Meanwhile, the British government remained cagey and avoided the question of a link. Now, however, it has formally confirmed that it paid the debt in the same statement announcing the release of Zaghari-Ratcliffe and fellow detainee Anoosheh Ashoori.
The post-revolution arms network
While Britain halted the transfer of the Chieftain tanks when the Shah fell, the arms trading relationship with Iran did not cease entirely during the 1980s.
Indeed, by the time Iran was fighting a bloody war with Iraq that would last for most of the decade and claim up to a million lives, Britain, and London in particular, had a central role in Iran’s arms procurement networks.
My research shows that Iran was running a military procurement office in the heart of Westminster to supply its war machine. The office, hosted in the National Iranian Oil Company building, was located over the street from the Department for Trade and Industry, and a stone’s throw away from Westminster Abbey and the Houses of Parliament.
British government documents from 1985 note 60 to 70 arms dealers worked to broker arms deals in the building alongside over 200 oil company representatives. Contemporary press reports suggested millions of dollars of business flowed through the office, although British officials were reluctant to specify how much of Iran’s alleged US$1.2 billion annual arms purchases were handled in Westminster.
While few actual weapons systems appear to have been transferred through the offices, a search of the building in 1982 by the Metropolitan Police did uncover explosive fighter jet ejector seat parts in the basement.
Some evidence even suggests a link between IMS Ltd, the Chieftain tank deal and the Iranian offices. In the mid-1980s some spare parts for the tanks were supplied to Iran, with the name of Iran’s London office found on some leaked paperwork linked to the transaction.
The official British rules on arms transfers to Iran and Iraq during the war were complicated. Guidelines from 1984 suggested that Britain would not supply “lethal” equipment, that existing contracts should be fulfilled where possible and that transfers should not exacerbate or lengthen the conflict.
Richard Ratcliffe, pictured during his hunger strike towards the end of his wife’s captivity. Alamy
British officials were well aware of the Iranian office, and were frequently pressured to act against it by the US government. However, British intelligence struggled to understand what exactly was going on inside the building, and no clear evidence could ever be found of a breach of British law.
The desire to avoid a diplomatic spat with Iran but also the potential for a flourishing commercial relationship with Iran in other areas –- particularly supplying the National Iranian Oil Company – prevented British action.
It was only in 1987, following a series of Iranian provocations, including attacks on oil tankers and British diplomats in Tehran, that Margaret Thatcher’s government pulled the plug on Iran’s arms dealing operations in Westminster.
Insights from the archives
It is clear that challenging diplomatic relations and international sanctions on Iran over recent decades have made resolving the tank debt complicated. But the largely forgotten story of Iran’s London arms procurement office makes the British government’s unwillingness or inability to pay somewhat challenging to comprehend. Any narratives that suggested it was impossible to engage with the question of the debt skip over rather a lot of other activities that continued throughout the period in question.
I’ve been able to scrape together information about Iran’s audacious 1980s procurement operation at the heart of Westminster thanks to the rules that make government records public after 30 years. In another 30 years’ time, the archives might help to shed some further light on the events of 2022, as well as the years Zaghari-Ratcliffe and Ashoori spent imprisoned. They might tell us why it took so long for them to be reunited with their families.
British officials were well aware of the Iranian office, and were frequently pressured to act against it by the US government. However, British intelligence struggled to understand what exactly was going on inside the building, and no clear evidence could ever be found of a breach of British law.
The desire to avoid a diplomatic spat with Iran but also the potential for a flourishing commercial relationship with Iran in other areas –- particularly supplying the National Iranian Oil Company – prevented British action.
It was only in 1987, following a series of Iranian provocations, including attacks on oil tankers and British diplomats in Tehran, that Margaret Thatcher’s government pulled the plug on Iran’s arms dealing operations in Westminster.
Insights from the archives
It is clear that challenging diplomatic relations and international sanctions on Iran over recent decades have made resolving the tank debt complicated. But the largely forgotten story of Iran’s London arms procurement office makes the British government’s unwillingness or inability to pay somewhat challenging to comprehend. Any narratives that suggested it was impossible to engage with the question of the debt skip over rather a lot of other activities that continued throughout the period in question.
I’ve been able to scrape together information about Iran’s audacious 1980s procurement operation at the heart of Westminster thanks to the rules that make government records public after 30 years. In another 30 years’ time, the archives might help to shed some further light on the events of 2022, as well as the years Zaghari-Ratcliffe and Ashoori spent imprisoned. They might tell us why it took so long for them to be reunited with their families.
Author
Daniel Salisbury
Senior Research Fellow at the Centre for Science and Security Studies, King's College London
Disclosure statement
Daniel Salisbury receives funding from the Leverhulme Trust.
Senior Research Fellow at the Centre for Science and Security Studies, King's College London
Disclosure statement
Daniel Salisbury receives funding from the Leverhulme Trust.
PERMANENT ARMS ECONOMY
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