As momentum builds for a second round of talks between the United States and Iran aimed at ending their war, one central issue has emerged as a bone of contention: Tehran’s frozen assets held in other countries. Iran’s economy has been ailing for years due to sanctions imposed on the country by the US and other nations. These sanctions have been imposed since 1979, first over the US hostages held at the American embassy in Tehran following the Islamic revolution, and then amplified over Iran’s nuclear and ballistic missiles programmes.
These measures have restricted Tehran’s ability to access its own assets, like revenues from oil sales, which have been frozen in foreign banks. 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 Al Jazeera that these assets are about three times what Iran earns annually from the sale of hydrocarbons. 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.
Jacob Lew, who was secretary of the Treasury under former US President Barack Obama, said in 2016 that Iran would not be able to access all of its assets frozen abroad even if all sanctions were lifted. At the time, Iran had agreed to a landmark deal with the US and other nations, capping its nuclear programme in exchange for sanctions relief. Lew had told Congress that in reality, Iran would be able to access only about half of its frozen assets at best, because the rest were already committed to previously promised investments or for loan repayments.
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.
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