More than $100 billion in Iranian assets frozen overseas have emerged as a key point of contention in ongoing negotiations between Tehran and Washington, as both sides seek to sustain a fragile ceasefire.
Iran has demanded access to at least part of these funds as a confidence-building measure, with officials calling for the release of billions held in foreign banks under decades of sanctions, reports Al Jazeera.
The assets — largely revenues from oil sales — have been restricted since 1979, when the United States first imposed sanctions following the Islamic Revolution and hostage crisis. Subsequent measures tied to Iran’s nuclear and missile programmes have further limited Tehran’s access to its own funds.
On April 10, before the first round of ceasefire talks began in Pakistan, the speaker of Iran’s parliament, Mohammad Bagher Ghalibaf, said on X that Iranian frozen assets (revenues frozen in foreign banks) must be released before any negotiations could begin.
A day later at the ceasefire talks in Pakistan’s capital, Islamabad, some reports emerged suggesting that Washington had agreed to unfreeze at least some of the Iranian assets being held outside the country. But the US government quickly dismissed those reports, insisting that those assets remained frozen.
With talks expected to resume in the coming days, ahead of the expiry of the current US-Iran ceasefire in the early hours of April 22 in the Middle East, that tension is expected to resurface.
But how many Iranian assets are frozen, why is Tehran unable to access them, where are these funds at the moment, and why are they important to Iran?
While the exact amount of Iran’s frozen assets is unclear, official Iranian reports and experts have set the total amount of frozen Iranian assets overseas at more than $100bn.
Frederic Schneider, a nonresident senior fellow at the Middle East Council on Global Affairs told the media that these assets are about four times what Iran earns annually from the sale of hydrocarbons.
“This is a very substantial sum, especially for a society that has been suffering under decades of US-led sanctions,” he said.
But he added that it remains unclear whether the US — even if it were to release these assets — would make that conditional on how they are used.
“Iran definitely has a dire need for the assets but given the very chaotic history of sanctions and the lack of specialists on the US side to negotiate the details, Iran is sceptical,” he said.
Currently, Tehran’s key demand in the ceasefire talks is to release at least $6bn of its frozen assets, as a confidence-building measure.
When the funds, property or securities of a person, company or country’s central bank are temporarily retained by another nation’s authorities or a global body, that constitutes the freezing of assets.
This restricts the owners’ ability to sell these assets due to sanctions, court orders or other regulatory reasons.
According to US government archives, the first asset freeze took place in November 1979 when the US president at the time, Jimmy Carter, said that Iran “constitutes an unusual and extraordinary threat to the national security, foreign policy and economy of the United States”.
At the time, Iranian students were holding 66 American citizens hostage in the US embassy in Tehran.
The secretary of the Treasury at the time, William Miller, told reporters that Iran’s liquid assets back then amounted to less than $6bn, the largest component of which was $1.3bn in Treasury notes held by the Federal Reserve Bank of New York. In 1981, the Algiers Accords, brokered by Algeria between the US and Iran, resulted in the US unfreezing a significant portion of these assets in return for Iran releasing the 52 American captives who were still being held at that point in Tehran.
In the following years, however, relations between the US and Iran continued to sour, with Washington uneasy over Tehran’s nuclear programme.
Iran has always maintained that its uranium enrichment programme is for civilian energy purposes only, despite having enriched uranium far beyond the threshold required for that.
Israel and the US have repeatedly accused Iran of enriching uranium to develop nuclear weapons. The US and its allies, especially Europe, have slapped multiple rounds of sanctions on the country, even though Israel — the only Middle Eastern country widely believed to already hold nuclear weapons built through a clandestine programme — has faced no such scrutiny.
Bd-pratidin English/TR
