The British government has blocked the Anglo-Dutch oil and gas company Royal Dutch Shell from paying its $2.3 billion debt to Iran to prevent a boost to the Iranian economy by PressTV
While Shell has been trying for months to pay its debt to Iran without violating anti-Iranian sanctions, oil industry sources said the British government has blocked the payment under the pretext of a European Union embargo on Iran to prevent “a payment that helps Iran”.
Shell has reportedly consulted London on the possibility of paying British pharmaceuticals maker GSK to provide medicine to Iran in exchange for the debt but the proposal has been rejected.
Shell has also sought the possibility of an offset agreement with US agricultural trader Cargill to deliver grain to Iran in exchange for the debt, but this second move was also blocked by London.
This comes as the US and the European Union claim that their unilateral sanctions on Iran do not include food and medicine.
Shell Annual Report 2012
The coup in Iran, 1953 by Mark Curtis
An edited extract from Web of Deceit: Britain’s Real Role in the World
“Our policy was to get rid of Mossadeq as soon as possible.” (Sir Donald Logan, British embassy, Iran)
In August 1953 a coup covertly organised by MI6 and the CIA overthrew Iran’s popular, nationalist government under Mohamed Musaddiq and installed the Shah in power. The Shah subsequently used widespread repression and torture to institute a dictatorship that lasted until the 1979 Islamic revolution. The Shah’s regime was given full political and economic backing by Britain and the US, including its most brutal component, the Savak secret police. The new Islamic leaders turned on the US and Britain, partly for their role in installing and propping up the previous regime for a quarter of a century.
The CIA is conventionally regarded as the prime mover behind the 1953 coup. Yet the declassified British files show not only that Britain was the major instigator but also that British resources contributed significantly to it. Churchill once told the CIA agent responsible for the operation that he “would have loved nothing better than to have served under your command in this great venture”.
Prelude to covert action
In the early 1950s the Anglo-Iranian Oil Company (AIOC) – later renamed British Petroleum – which was managed from London and owned by the British government and British private citizens, controlled Iran’s main source of income: oil. According to one British official, the AIOC “has become in effect an imperium in imperio in Persia”. The AIOC was recognised as “a great foreign organisation controlling Persia’s economic life and destiny”.
Iranian nationalists objected to the fact that the AIOC’s revenues from Iranian oil were greater than the Iranian government’s, with profits amounting to £170 million in 1950 alone. The Iranian government was being paid royalties of l0-12 per cent of the company’s net proceeds, while the British government received as much as 30 per cent of these in taxes alone.
The British Minister of Fuel and Power explained that Iranians “are of course morally entitled to a royalty” for oil extraction but to say “that morally they are entitled to 50%, or…even more of the profits of enterprises to which they have made no contribution whatever, is bunk, and ought to be shown to be bunk”. Britain’s ambassador in Tehran commented: “It is so important to prevent the Persians from destroying their main source of revenue…by trying to run it themselves…The need for Persia is not to run the oil industry for herself (which she cannot do) but to profit from the technical ability of the West.”
Iranians could also point to the AIOC’s low wage rates and its effectively autonomous rule in the parts of the country where the oilhelds lay. Shown the overcrowded housing of some of the AIOC workers, a British official commented, “well, this is just the way all Iranians live”. The AIOC regarded Iranians as “merely wogs”.
Britain’s priority was to support political “stability” by aiding Iranian parliamentarians “to preserve the existing social order from which they profit so greatly” – as did British oil interests. One difference with the National Front (led by Musaddiq) was that its members were “comparatively free from the taint of having amassed wealth and influence through the improper use of official positions”, Britain’s ambassador in Iran privately admitted. Musaddiq had the support of the nationalists against the rich and corrupt. As prime minister he managed to break the grip over Iranian affairs exercised by the large landowners, wealthy merchants, the army and the civil service. Despite British public propaganda, Musaddiq’s government was generally democratic, popular, nationalist and anti-communist. British planners noted that, unfortunately, Musaddiq is “regarded by many of the ignorant as a messiah”.
But Musaddiq overstepped the mark, as far as Britain was concerned, in nationalising oil operations in May 1951. The following month the Attlee Labour government began plans to overthrow him, dispatching to Iran an Oxford lecturer provided with considerable sums of money.
In the dispute that followed, Musaddiq offered to compensate the AIOC but Britain demanded either a new oil concession or a settlement that would include compensation for loss of future profits. “In other words”, according to Iran scholar Homa Katouzian, “the Iranians would have had either to give up the spirit of the nationalisation or to compensate the AIOC not just for its investment but for all the oil which it would have produced in the next 40 years”.
Iran’s nationalisation and offer of compensation were perfectly legitimate in international law, but this was irrelevant to British planners. Britain did “not consider that a deal on acceptable terms can ever be made with” Musaddiq. Instead, the Foreign Office noted that “there is hope of a change which would bring moderate elements into control”.
The first step taken to remove the threat of independent development was stopping the production and export of oil, which deprived Iran of its main source of income until the 1953 coup. This was done in the knowledge that “the effect might be to bankrupt Persia thus possibly leading to revolution”. Other, mainly US, oil companies leant their support by refusing to handle Iranian oil, to prevent other oil-exporting countries learning a “bad” lesson from Iran’s example.
The second step was to begin covert planning. “It has been our objective for some time to get Sayyid Zia appointed Prime Minister”, the Foreign Office noted in September 195l. Zia had “no popular support” and his appointment “was likely to provoke a strong public reaction”, according to Iranian academic Fakhreddin Azimi. But to the Foreign Office Zia was “the one man who would be able and anxious to get a reasonable oil settlement with us” and promote Iran’s “future stability”.
A third option was direct military intervention, especially military occupation of the area around Abadan, the world’s largest oil refinery and centre of AIOC’s operations. According to the Foreign Secretary, this: “would demonstrate once and for all to the Persians British determination not to allow the…AIOC to be evicted from Persia and might well result in the downfall of the Mussadiq regime and its replacement by more reasonable elements prepared to negotiate a settlement…it might be expected to produce a salutary effect throughout the Middle East and elsewhere, as evidence that United Kingdom interests could not be recklessly molested with impunity”.
Plans were laid for war against Iran. But in the end the option was viewed by the Foreign Office as “quite impracticable” because it was believed that Iran would be able to resist the comparatively small number of troops that Britain could deploy. The US was also opposed to the British use of force, and President Truman sent a personal message to this effect to Attlee. Both the British Foreign Secretary and the Defence Minister favoured the use of military force to seize the oil installations. The option of military intervention was kept open until September 1951, when London finally decided to evacuate British personnel, and continue covert action, instead.
After winning the general election the following month, Churchill berated his predecessors “who had scuttled and run from Abadan when a splutter of musketry would have ended the matter”. “If we had fired the volley you were responsible for at Ismaila at Abadan” Churchill explained to his Foreign Secretary, Anthony Eden, “none of these difficulties …would have occurred”. (The reference was to the British action at Ismaila, Egypt in January 1952. After Egyptian rebels assaulted a British military base, British soldiers occupied the town, surrounded the police headquarters, and proceeded to engage in a turkey shoot, killing fifty people and wounding a hundred before the surrender.)
A few months into his term, however, Churchill noted that “by sitting still on the safety valve and showing no weariness we are gradually getting them into submission”.
Preference for a dictator
Britain’s aim was to install “a more reasonable government”, Foreign Secretary Anthony Eden explained. “Our policy”, a British official later recalled, “was to get rid of Mossadeq as soon as possible”. An adviser at the British embassy, Colonel Wheeler, explained that “a change of government could almost certainly be effected without difficulty or disturbance”. So by November, a Foreign Office official could report that the “unofficial efforts to undermine Dr Mussadiq are making good progress”.
After the failure of the oil negotiations, the main British negotiator advised the Shah that the “only solution” was “a strong government under martial law and the bad boys in prison for two years or so”. Britain’s ambassador in Tehran agreed, noting that “if only the Shah can be induced to take a strong line there is a good chance that Musaddiq may be got rid of”. The new government should then “take drastic action against individual extremists”.
With 1952 came Britain’s preference for “a non-communist coup d’etat preferably in the name of the Shah”. It was clearly understood by the British embassy in Tehran that “this would mean an authoritarian regime”.
British planners had no illusions about the Shah. They noted that “the chief complaint of his political critics [is] that he wishes to monopolise power for himself”. Neither did he “sufficiently check the members of his family and their entourage from interference in politics and their profitable incursions into business”.
As with the secret planning in Indonesia in 1965, Britain supported the establishment of a strong-arm dictatorship in the face of popular, nationalist alternatives. A coup could be successful, planners noted, “provided always a strong man can be found equal to the task”. This “strong man” would “rule in the name of the Shah”. The files show that the ambassador in Tehran preferred “a dictator”, who “would carry out the necessary administrative and economic reforms and settle the oil question on reasonable terms”.
The Foreign Office stated who such a reasonable new strongman might be: General Zahidi, who was to become Prime Minister after the coup. Zahedi had spent much of the war in prison in Palestine after being arrested for pro-Nazi activities by the British authorities. He was known as ruthless and manipulative and had twice been chief of police in Tehran. British officials now began to talk to him about providing £10-20 million to the Iranian treasury on his taking power.
By March 1952, the British embassy was lamenting that the Iranian army was “unlikely to take overt action against Musadiq” but that its attitude might become “more positive”. The Shah was also reported to be resisting British pressures to act but the British “made it abundantly clear that we desire the fall of Musaddiq as soon as possible”.
British embassy official Sam Falle met Zahidi on 6 August and recorded the latter to be prepared to take on the premiership. Falle suggested that Zahidi make this known to the US. The ambassador confirmed that Zahidi “will make his own contacts with [the] American embassy and does not wish to appear to be our candidate”.
In October 1952, the Iranian government closed down the British embassy, claiming – correctly – that certain intrigues were taking place there, and thus removing the cover for British covert activities. An MI6 and Foreign Office team met with the CIA in November and proposed the joint overthrow of the Iranian government based on Britain’s well-laid plans. British agents in Iran had been provided with a radio transmitter to maintain contact with MI6, while the head of the MI6 operation put the CIA in touch with other useful allies in the country.
British pay-offs had already secured the cooperation of senior officers of the army and police, deputies and senators, mullahs, merchants, newspaper editors and elder statesmen, as well as mob leaders. “These forces”, explained the MI6 agent in charge of the British end of the operation, “were to seize control of Tehran, preferably with the support of the Shah but if necessary without it, and to arrest Musaddiq and his ministers”.
On 3 February 1953 a British delegation met the CIA director and the US Secretary of State while the head of the CIA’s operation, Kermit Roosevelt, was dispatched to Iran to investigate the situation. On 18 March “the CIA was ready to discuss tactics in detail with us for the overthrow of Musaddiq” and it was formally agreed in April that General Zahidi was the acceptable candidate to replace him. By then, British and US agents were also involved in plans to kidnap key officials and political personalities. In one incident the Chief of Police was abducted, tortured and murdered.
The final go-ahead for the coup was given by the US in late June. Britain had by then already presented a “complete plan” to the CIA. Churchill’s authorisation soon followed and the date was set for mid-August. That month, Kermit Roosevelt met the Shah, the CIA director visited some members of the Shah’s family in Switzerland, and a US army general arrived in Tehran to meet the Shah and General Zahidi.
The signal for the coup scenario to begin had been arranged with the BBC; the latter agreed to begin its Persian language news broadcast not with the usual “it is now midnight in London”, but instead with “it is now exactly midnight”. On hearing these broadcasts the Shah fled the country and signed two blank decrees to be filled in at the right time, one dismissing Musaddiq, the other appointing Zahedi as prime minister.
Huge demonstrations took place in the streets of Tehran, funded by CIA and MI6 money; $1 million was in a safe in the US embassy and £1.5 million had been delivered by Britain to its agents in Iran, according to the MI6 officer responsible. According to then CIA agent Richard Cottam, “that mob that came into north Tehran and was decisive in the overthrow was a mercenary mob. It had no ideology. That mob was paid for by American dollars and the amount of money that was used has to have been very large”.
One key aspect of the plot was to portray the demonstrating mobs as supporters of the Iranian Communist Party – Tudeh – to provide a suitable pretext for the coup and the Shah’s taking control in the name of anti-communism. Agents working for the British posed as Tudeh supporters, engaging in activities such as throwing rocks at mosques and priests.
Roosevelt, the head of the CIA operation, sent envoys to the commanders of some provincial armies, encouraging them to move on to Tehran. In the fighting in the capital, 300 people were killed before Musaddiq’s supporters were defeated by the Shah’s forces. A US general later testified that “the guns they had in their hands, the trucks they rode in, the armoured cars that they drove through the streets, and the radio communications that permitted their control, were all furnished through the [US] military defence assistance program”.
The British input, however, had also been significant. One agent of the British – Shahpour Reporter, who subsequently served as adviser to the Shah – was rewarded with a knighthood, before becoming a chief middleman for British arms sales to Iran, in particular for the manufacturers of Chieftain tanks and Rapier missiles. Two years after the coup, the head of the MI6 end of the operation became director of the Royal Institute of International Affairs, one of Britain’s leading research institutes.
As in every other British and US military intervention until the collapse of the USSR, the “communist threat” scenario was deployed as the Official Story. Much subsequent academic work and media commentary plays to the same tune. The real threat of nationalism (and dirtier aims like protecting oil profits) were downplayed or removed from the picture presented to the public. In the words of a secret Foreign Office telegram to the embassy in Washington: “It is essential at all costs that His Majesty’s Government should avoid getting into a position where they could be represented as a capitalist power attacking a Nationalist Persia.”
There are two variants to the Official Story. The first is that the coup was a response to an impending takeover by the Communist Party, Tudeh – which had close contacts with the Soviet Union – and therefore prevented the establishment of a Soviet-backed regime. The second is that Tudeh was in the ascendancy within Musaddiq’s government. Both variants are plainly false.
In September 1952 the British ambassador recognised that the Tudeh “have played a largely passive role, content to let matters take their course with only general encouragement from the sidelines…they have not been a major factor in the development of the Mussadiq brand of nationalism”. The US embassy stated three months before the coup that “there was little evidence that in recent months the Tudeh had gained in popular strength, although its steady infiltration of the Iranian government and other institutions [had] continued”.
As for Tudeh attempting a coup, a State Department intelligence report noted that an open Tudeh move for power “would probably unite independents and non-communists of all political leanings and would result…in energetic efforts to destroy the Tudeh by force”. As Iranian scholar Fakhreddin Azimi has pointed out, the seizure of power by means of a coup was not part of Tudeh strategy, and it was also unlikely that the Russians would anyway have endorsed such a move. The deliberate funding of demonstrators posing as Tudeh supporters also gives the game away as to how seriously the communist threat was actually feared.
In their secret planning, the British deliberately played up the communist threat scenario to the Americans to persuade them to help overthrow Musaddiq. One file notes that, in proposing the overthrow of Musaddiq to the Americans, “we could say that, although we naturally wish to reach an oil settlement eventually, we appreciate that the first and most important objective is to prevent Persia going communist”. The MI6 agent believed “the Americans would be more likely to work with us if they saw the problem as one of containing communism rather than restoring the position of the AIOC”.
“I owe my throne to God, my people, my army – and to you”, the Shah told the head of the CIA operation responsible for installing him; by “you” he meant the US and Britain.
Now that a “dictator” had been installed in line with Foreign Office wishes, stability could be restored, initially under the favoured candidate prime minister, General Zahidi. An agreement the following year established a new oil consortium that controlled the production, pricing and export of Iranian oil. This provided Britain and the US with a 40 per cent interest each. Indeed, the 40 per cent figure for the US was the price Britain secretly (and grudgingly) agreed to pay the US in exchange for US help in overthrowing Musaddiq. Britain’s share was thus reduced from the complete control it had prior to Musaddiq; but it had prevented the danger that Iranians might use oil primarily to benefit themselves. The US gain of a significant stake in Iranian oil showed the new relative power of the partners in the special relationship.