Israel is taking sanctions to a whole new level by refusing to comply with a Swiss court order that it pay $1.1 billion. The debt dates to before Iran’s 1979 Islamic revolution, for its share of a jointly owned oil pipeline.
“Without referring to the matter at hand, we’ll note that according to the Trading with the Enemy Act it is forbidden to transfer money to the enemy, including the Iranian national oil company,” the Israeli Finance Ministry said in a statement.
The complex dispute began in 1968, when non-Islamist Shah Reza Pahlavi ruled Iran. The Eilat Ashkelon Pipeline Co. (EAPC) was created as a joint venture between an Israeli company, Trans-Asiatic Oil Ltd. (TAO), and the National Iranian Oil Co. to supply Iranian oil to Europe.
The oil was taken by boat to the Israeli port of Eilat at the northern tip of the Gulf of Aqaba, where it then moved through a network of pipelines to Ashkelon on Israel’s Mediterranean coast, then to the northern Israeli port of Haifa and eventually on to European customers.
The Iranians provided 14.75 million cubic meters of crude oil through the EAPC, earning $450 million for TAO.
With the two countries now at war, EAPC is the sole operator of more than 450 miles of the EAPC pipelines in Israel.
Prior to Iran’s revolution, the two countries were allied against the Sunni Muslim Arab nations in the region, who chafed against both a Jewish state in the Middle East and against Iran, a country that predominantly adheres to rival Shi’a Islam.
Now Iran and Israel are sworn enemies, with Tehran providing billions of dollars in military and financial aid to terror groups aligned against Israel, including Hezbollah in Lebanon and Hamas in Gaza.
After the revolution, which saw Iran declare Israel an enemy, Israel expropriated all Iran’s assets in its territory. That included nationalizing the pipeline.
The legal saga has gone on for years, with rulings consistently in Iran's favor. Yet these, and the latest ruling, are likely to mean little given the animosity between the two countries who appear more on course for outright war than reconciliation.