The United States of America House of Representatives approved a legislation late on Thursday to barr the US from making cash payments to Iran, it has been reported.
The Republican-led house of reps passed the bill by a large margin of 254 votes to 163. The bill also requires Congress to be notified before any future claims settlements with Tehran are conducted.
The Obama administration paid Iran $1.7 billion in cash in January to settle a decades-old arbitration claim, and the legislative proposal won considerable support from Republicans keen to rebuke this.
They claim the payment which brought to an end a 35-year legal saga was a ransom for the release of four American prisoners.
The legal saga was centred on a purchase of US arms which were never delivered due to the outbreak of the Iranian revolution in 1979. They were to be purchased by former Iranian monarch Shah Mohammad Reza Pahlavi.
The Republican lawmakers also contended that the untraceable cash could have been used to finance global terrorism operations.
The Obama administration has however denied the claims, and Democrat lawmakers on their part have accused Republicans of trying to score political points with the bill.
Although the new bill targets Iran, it also includes an amendment that would prevent the US from making cash payments to other designated sponsors of terrorism and North Korea.