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Britain to pay 400 million-pound debt to Iran soon, Iranian envoy says

LONDON (Reuters) - Britain will soon repay a decades-old debt of over 400 million pounds ($527 million) to Iran, the Iranian ambassador said on Friday, adding that the payment was not linked to the case of a British-Iranian charity worker jailed in Iran.

“An outstanding debt owed by the U.K. to Tehran will be transferred to the Central Bank of Iran in the coming days. The payment ... has nothing to do with Nazanin Zaghari-Ratcliffe’s case,” Hamid Baeedinejad wrote on his Telegram channel.

Zaghari-Ratcliffe was detained in April 2016 in Tehran as she tried to leave Iran after a visit with her two-year-old daughter.

She was sentenced to five years in prison after an Iranian court convicted her of plotting to overthrow the clerical establishment. She denies the charges, and Britain has called for her release. Iran does not recognize dual citizenship for its nationals.

Britain’s debt to Iran dates from the 1970s, before the Islamic Revolution of 1979 toppled the U.S.-backed Shah. Iran paid up front for 1,750 Chieftain tanks and other vehicles, but most were never delivered because of sanctions imposed on Tehran after the revolution.

A British government official, who asked not to be named, said on Friday it was “speculation” that the money would be paid.

The Treasury said in a statement the money was frozen by a British court and could not be paid because of sanctions.

The Telegraph newspaper reported on Thursday that Britain was working on a plan to pay Iran the debt, as part of efforts to secure the release of Zaghari-Ratcliffe.

On Thursday, British Prime Minister Theresa May’s spokesman denied there was any link between the debt and the charity worker’s case. Tehran also dismissed the Telegraph report.

Zaghari-Ratcliffe is a project manager with the Thomson Reuters Foundation, a charity organization that is independent of Thomson Reuters. It operates independently of Reuters News.

In 2009, the International Chamber of Commerce ordered Britain to repay Iran for the undelivered vehicles, but UN and EU sanctions prevented that.

Under a deal between Iran and six major powers in 2015, most sanctions on Iran were lifted last year, in exchange for Tehran curbing its nuclear program.

Iran’s Foreign Ministry spokesman said that a range of issues would be discussed with Britain during a visit to Tehran this month by Foreign Secretary Boris Johnson, Iranian media reported on Thursday.

Reporting by Parisa Hafezi and Andrew MacAskill; editing by Andrew Roche