Monday, 26 April 2010

The MoD v Iran - Iran Wins By £400m

Here is a good example of governmental waste of taxpayers' money. Quietly successive governments spend millions of our hard earned cash on issues such as this.

Do we really want more of the same? Because if we vote for any of the three main parties that's what we'll get. No PPC wants to discuss such matters, mainly because they don't have a clue about them, but these types of issues, along with the 'aid' dished out willy nilly by DFID, are why we cannot invest in the future of our children.

It's a long story going back 30 years when Britain sold the Shah of Iran 1,500 state of the art Chieftain tanks (pictured above) and 250 repair vehicles costing £650m. It must have seemed unbelievable to the British government of the time when the Shah of Persia paid them up front for the equipment.

The deal was negotiated by a government-owned company named International Military Services Ltd.

The problems arose when, with just 185 tanks delivered to Tehran, the Shah was deposed. The deal floundered and the Iranians asked for their money back. London refused and ever since have fought a bitter legal court case in an obscure international trading court based in the Netherlands. They want to hold onto what remains of the Shah's money.

The Thatcher government panicked and quickly agreed to sell 279 Chieftains to Jordan. What was not public knowledge was that, under the cover of that deal, Britain also sold 29 surplus ARVs to Hussein's Iraq, shortly before it began the 8 year war with Iran which is said to have claimed half a million lives. Publicising this would have contravened Britain's position of neutrality in the Iran-Iraq war and all IMS records elating to it were shredded apart from a letter signed by Lord Strathcona, a junior MoD minister, authorising the transaction.

However, all these years later (and let's not forget the compound interest), Britain is to return nearly £400m to Iran's defence ministry after finally admitting defeat. Financial restrictions imposed by the EU on Iranian banks mean that Iran will not be able to access the money and it will be held in a trust account overseen by independent trustees.

One British source said: "Given the context of current relations a large payment of this type looks like a propaganda gift."

The MoD insisted that the pay out will not come from its own over-stretched budget. In anticipation of a defeat, as far back as 2002, Britain paid nearly £486m into the High Court to meet the cost of any settlement. Westminster state that this money came from the Treasury and the government-owned International Military Services Ltd.

Can you believe that this money, expected to be about £390m including decades of compound interest, has not affected the expenditure for our troops in the last decade? That is what the UK government want us to believe.

Do read the whole article. It shows the hidden costs of a UK government where both tory and labour governments' allegiances to the arms trade came far above that of the country's national industries. What isn't mentioned is the 30-year legal costs.

There are reasons (here is one) why we have 10,000 troops fighting in Afghanistan and they are nothing to do with keeping the streets of Britain safer. It is said that the US Congress is pushing for war on Iran for the benefit of 'special interests'.

Lives are far less important than money - big money - where arms and reconstruction are concerned.


The Filthy Engineer said...

I actually drove one of those tanks down the ramp off the ship that delivered some to Iran.

subrosa said...

Jings FE, I didn't realise you were that old!

Alex Porter said...

Spot on Rosie, thanks for the entry. What a hideous world we live in right now.

I've been keeping my eye on the whole story in Poland. The country is starting to go bananas about whether the Russians were behind the plane crash.

Who knows although some answers are needed. Certainly, the missile shield to be installed in Poland next to Kalineengrad has been making the Russkies very edgy. What with a war in Iran around the corner and all..

subrosa said...

It's a dreadful world isn't it Alex. It's so obvious it's a them and us world and the them are going to stop at nothing to ensure we're all poor enough to have to rely on the state and therefore conform to the state's bidding.

Thank goodness I'm nearer my end than my beginning. I worry for the younger generations though.

Surreptitious Evil said...

We weren't, if I remember correctly, particularly neutral in the Iran / Iraq war. OP ARMILLA was my first war - protecting the tankers through the Straights of Hormuz and from attack in the northern Persian Gulf. To the financial and political benefit of the Baathist regime.

BTW - you've missed the 'm' off the £486 in para 9! And, unless McRuin has sneaked a new constitution in while Cameron was concentrating on the election, it would be the US Congress.

subrosa said...

SE thanks so much for pointing out my errors. That's what happens when I write half-asleep in the wee sma' hours. Amended now.

No we weren't neutral but we said we were. Was reading a bit about it while I researched for this post.

Thanks again.

Surreptitious Evil said...

Just to give myself an equal opportunities spelling kicking - that should be Straits of Hormuz, especially as the legitimate passage channel is bendy ...

On the neutrality side, I'm not completely sure what the international law (there is much more available about the US Neutrality Acts) aspect is of military protection of neutral flag shipping in transit to one of the belligerents.

"An enemy's goods are inviolate if traveling under a neutral flag, with the exception of contraband of war or war matériel." But the definition of contraband ... (and would it apply anyway when the actual benefit was the empty ship arriving - by the time they were transiting east-bound, the goods were the property of BP, Exxon or whoever). Of course, the legal measure is impounding. I'm not sure how you do that with a Silkworm missile!

Searching further: Para's 32 and 67 of the San Remo Manual seem to make it okay but this wasn't written until 1994 (possibly due to the 1986-88ish actions by the Iranians.) And p99 makes the full blockade of the Straits, including blockading UAE, Bahrain, Kuwait etc illegal.

s148 does defines contraband as:

"Contraband is defined as goods which are ultimately destined for territory under the control of the enemy and which may be susceptible for use in armed conflict."

If you have access, you may want to see the Journal of International and Comparative Law (here & here) and the Netherlands International Law review here.

subrosa said...

SE, I really appreciate the time you've taken to provide all that information and the links.

Be assured I will read them all thoroughly. Many thanks.

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