Funds limited to humanitarian purchases such as food and medicine; first financial incentive since ceasefire MOU; further asset releases possible as nuclear talks advance

Iranian President Masoud Pezeshkian holds up the ceasefire memorandum of understanding with the United States after signing it on Thursday. Iran is widely seen as having secured greater economic benefits from the MOU than it did under the 2015 nuclear deal struck with the Barack Obama administration. [UPI]
Iranian President Masoud Pezeshkian holds up the ceasefire memorandum of understanding with the United States after signing it on Thursday. Iran is widely seen as having secured greater economic benefits from the MOU than it did under the 2015 nuclear deal struck with the Barack Obama administration. [UPI]

By Seo Ji-yeon, The Herald Business

The United States is in talks with Qatar over allowing partial access to $6 billion in frozen Iranian funds held in the country — the first financial incentive pursued since Washington and Tehran signed a ceasefire memorandum of understanding. Analysts say the move could mark the starting point for broader asset releases as nuclear negotiations advance.

The Wall Street Journal reported Friday, citing sources familiar with the matter, that the US and Qatar are discussing arrangements that would allow the $6 billion to be used for humanitarian purchases, including food and medicine.

The funds represent proceeds from Iranian crude oil sales that were originally frozen in South Korean financial institutions before being transferred to a restricted account in Doha following a US-Iran prisoner exchange agreement in 2023.

Under the arrangement currently under discussion, Qatar would retain custody of the funds and make payments directly to suppliers of food, medicine and other goods ordered by Iran's central bank. Iran would not receive cash directly, and the United States would monitor how the money is spent — a structure designed to ease some financial pressure on Tehran while preserving sanctions controls.

The deal could mark the first time Iran is granted access to any portion of the roughly $100 billion in assets estimated to be frozen worldwide. Analysts have also raised the possibility that the Qatar model could serve as a template for handling other frozen Iranian assets going forward.

The Financial Times had earlier reported that Washington was considering allowing Iran limited access to funds following the ceasefire agreement. The Wall Street Journal's report confirms that the US has moved into detailed discussions with Qatar on the specifics.

However, Iran has not yet formally agreed to the proposed structure, according to sources. Tehran is pushing for a broader scope of access and expanded use of the funds.

The move is being interpreted as an early confidence-building measure ahead of nuclear negotiations the two sides are set to conduct over the next 60 days. Article 11 of the ceasefire MOU states that the United States will make Iran's frozen assets "fully available" depending on progress in final negotiations.

Washington appears to be pursuing a phased approach — first permitting limited use of the funds, then expanding the scope of sanctions relief based on outcomes in follow-on talks, including restrictions on Iran's nuclear program and acceptance of International Atomic Energy Agency verification.

Sanam Vakil, director of the Middle East program at the London think tank Chatham House, said even a limited asset release carries significant weight for the Iranian economy. "It can help stabilize the currency and ease economic pressure, while also serving as a political signal of de-escalation between the two countries," she said.

The discussions are unfolding amid domestic controversy in the United States over the economic concessions embedded in the ceasefire deal. Republican hardliners have criticized the arrangement, arguing that Iran stands to receive rewards before making any substantive concessions on its nuclear program.

The White House and supporters of the negotiations counter that restricting fund use to humanitarian purposes and keeping it under US oversight allows Washington to maintain its sanctions regime while encouraging Iran to keep the Strait of Hormuz open and avoid further military confrontation.


sjy@heraldcorp.com