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      Russia to Compensate Iran for S-300 Deal

      Russia to pay Iran $800 million after cancelling sale of S-300 defense system.
      By Elad Benari
      First Publish: 10/11/2010, 5:41 AM / Last Update: 10/11/2010, 5:38 AM

      After cancelling its planned sale of the S-300 missile defense system to Iran, Russia is now planning to pay the Islamic Republic $800 million as compensation, this according to a report last Thursday by Gulf in the Media, who quoted the head of state-owned Russian Technologies, Sergei Chemezov.

      Last month, Russia announced that it would shelve the plan to sell the missile defense system to Iran since going through with the sale would violate the sanctions imposed on the Islamic Republic by the UN last June. However, the Russians left the door open for a change in policy, depending on how Iran responds to international demands for United Nations inspection of its nuclear facilities.

      "A decision has been made not to supply S-300s to Iran. They are definitely subject to the sanctions, [and] time will show. It will depend on Iran's behavior," Russian Chief of General Staff Nikolai Makarov said at the time.

      Should Iran acquire the high-precision system, its nuclear plants would be close to invincible against aerial attacks as they are known today. The S-300 anti-aircraft missiles system can down airplanes and missiles from a range of up to 90 miles (150 kilometers).

      Chemezov told reporters: “We annulled the contract, now we are conducting talks about how to compensate the losses they have incurred. He added that Russian Technologies expected to receive the money from the state and would then make the payment to Iran, but added it was unlikely to happen until next year.

      Both Washington and Jerusalem were opposed to the deal between the Russians and the Iranians, and mounted pressure on Moscow to scrap the deal in the face of Iran's race towards probable development of a nuclear weapon.

      In June, Moscow supported a fourth round of UN sanctions against Iran, a move which was seen as part of a gradual shift by Russia closer to the tougher stance taken towards Iran by the United States and the European Union. Iran subsequently threatened “reciprocal measures" against countries who had voted for the sanctions, Russia included.

      Iran is Russia’s biggest trading partner in the Middle East. The S-300 contract was first announced in 2007.