Iranian funds frozen abroad are part of its important foreign relations agenda, as economic sanctions have been targeted more than once - by the United States and the European Union - Iran's financial situation abroad, especially with regard to the work of the Central Bank of Iran, so it has acted to paralyze the movement of money transfer to and from it.
However, the step taken by the administration of US President Joe Biden in February 2021 to inform the Security Council of withdrawing his predecessor Donald Trump's speeches to activate the "Snapback" mechanism (which means the return of all economic sanctions that were imposed on Iran before the "5 + 1" agreement) It opened the door to the possibility of resuming negotiations on Iran's nuclear program, and also strengthened the prospects for a return to the partial lifting of economic sanctions on Iran, in light of what the new negotiations awaiting about returning to the "5 + 1" agreement could result.
However, the US move can be considered a green light by releasing the frozen Iranian funds, as some economic officials in Iran stated that, in early March 2021, the country obtained about $ 3 billion from 3 countries: South Korea, Iraq, and the Sultanate of Oman.
Observers of the Iranian issue will find that there is an escalation by both America and Iran regarding the position on returning to the "5 + 1" agreement, in order to obtain better benefits than it was before the sanctions imposed by Trump on Iran in November 2018.
Trump's sanctions were not trivial;
They included the ban on Iranian government purchases of US currency, the ban on Iran's trade in gold and other precious metals, as well as the sanctions included financial transfers in Iranian riyals, the prohibition of activities related to any financial measures to collect funds related to the Iranian sovereign debt, the prohibition of financial transfers related to Iranian oil, and the absence of any action. Transfers and financial transactions of foreign institutions with the Central Bank of Iran.
By reading the most important financial provisions in the sanctions imposed by the Trump administration in November 2018, we find that they paralyze all financial dealings of Iran, isolate it from abroad, and deprive it of its most important resources, which are oil and natural gas exports. Bringing in foreign funds through foreign debt, to be a card later to create a network of interests with other countries, as a buffer against the repeated pursuit by America to impose sanctions on it.
Iran has resorted to various tricks to deal with the outside world, by exporting oil away from official sources, whether through Iranian private sector companies, or through other methods, through which oil is exported without the name of Iran, according to the statement of the Iranian Oil Minister in September. 2020.
However, the Corona pandemic imposed itself, and put the countries aligned with America against Iran in a difficult humanitarian situation, as Iran was exposed to violent waves of the Corona virus, and it was - and still is - in need of basic commodities related to food and medicine, and Iranian Foreign Minister Muhammad Javad Zarif stated that his country It needs to use its frozen funds in a humanitarian circumstance, which is the Corona pandemic, to import food and medicine, and preventing Iran from doing so is an inhumane act.
On the issue of Iran's frozen funds abroad, several questions arise about the nature of this money, the places where it is kept, and the extent of Iran's efforts to recover it, and will it witness a positive development under the Biden administration?
And when will Iran get this money back?
What are the expected returns on the Iranian economy to recover this money?
The following lines carry the answers to these questions.
America resorted to imposing economic sanctions on Iran, which were largely the result of freezing funds owed to the Iranian government (Reuters)
Why was the weapon freeze money used against Iran?
With the first moments of the Iranian revolution in 1979, a collision with America occurred, and then repeated clashes began between the two countries at several stages.
As some American facilities in different regions were exposed to acts of violence, and America held Iran responsible for it, and that is why America resorted to imposing economic sanctions on Iran, and it was largely represented in freezing the funds owed to the Iranian government, or to some of its senior officials, or to some economic institutions associated with the Iranian regime, Like the Revolutionary Guard and other institutions.
However, Iran's expansionist role in the Middle East region, as well as Iran's nuclear program, pushed America and the European Union to impose economic and financial sanctions against Iran, which continued between 2012 and 2016, but the "5 + 1" agreement was a lifeline for Iran to get out of its isolation. With the foreign economy, this matter did not last long, as the US administration changed, and Trump came to restore all economic sanctions on Iran in November 2018, and even more than they were, with the aim of forcing Iran to abandon its nuclear program, and to satisfy its Gulf allies and the entity Zionists, who hostile to the Iranian regime.
What is the truth about the value of frozen funds?
There is no single narrative that can be relied upon to arrive at a definitive figure regarding the value of Iran's funds frozen abroad, whether by the Iranians or the Americans. Between $ 32 billion and $ 120 billion, estimates vary. After activating the "5 + 1" agreement in early 2017, the bank governor stated The Iranian Central Bank said that his country will recover about $ 32 billion frozen abroad, but it will not return in the form of cash, but rather in the form of basic commodities that Iran needs, and that $ 28 billion of these funds belong to the central bank, and the rest belongs to the public treasury.
Also, former US Treasury Secretary Jack Lew stated before Congress that Iran's frozen funds are estimated at $ 120 billion, but what Iran will be allowed to deal with is only $ 56 billion.
What is the map of the presence of frozen Iranian funds?
There are several countries that have frozen Iranian funds, chiefly: America, China, India, Iraq, the Emirates, the Sultanate of Oman, South Korea, and Japan.
Although some estimates go that Japan, South Korea and the UAE each have about 23 billion dollars, and India about 6 billion dollars.
Given the age of the issue, all the countries that were establishing commercial relations with Iran will of course have frozen funds, whether it is for the state, persons or institutions.
In the period before the emergence of China as an economic power, the European Union used to gain the share of the first trading partner of Iran, then the situation changed in favor of the United Arab Emirates, then recently China became the first trading partner of Iran, and the policy of cheap oil that Iran followed during the face of economic sanctions created dues for it. Finance in China, India, South Africa, and many oil importers.
All countries that were establishing trade relations with Iran will have frozen funds (European)
How did Iran get back some of its money previously frozen?
Iran had no way to obtain part of its frozen funds abroad except through two paths: the first is the judicial one, but in the end it was conditional on American consent, and the last example in this path was what happened in April 2020, with Iran recovering $ 1.6 billion from Luxembourg, It was frozen on US orders.
The second was within the framework of the political settlement over Iran's nuclear program;
In late 2013, it was agreed between Iran and the six major powers that Iran would get 4.2 billion dollars of its frozen funds in 8 installments, during the period between November 2013 and July 2014, provided that it fulfills its obligations regarding its nuclear program.
Indeed, in January 2014, Japan paid Iran about one billion dollars in two batches of its frozen funds, which are money owed in return for Iranian oil exports to Japan, and so did South Korea in March 2014, when it paid about 450 million dollars to Iran, from the funds. It has frozen oil, which was also a match for Iranian oil exports to Korea.
What is the nature of the prosecutions to freeze Iran's funds?
Iran's foreign funds have suffered from several prosecutions by the United States under the pretext of obtaining compensation for terrorist acts in which Iran has been involved. The US pursuit of Iranian funds was not limited to America, but extended to Germany and other European countries.
The most recent matters related to the judicial dispute between America and Iran - regarding economic sanctions - was the acceptance by the International Court of Justice in early February 2021 of the Iranian case, and its announcement that it was authorized to consider the Iranian case regarding the lifting of the economic sanctions imposed by the Trump administration on Iran, which prompted the Biden administration. In the same month, it submitted a memorandum to the Security Council to withdraw its speeches on imposing economic sanctions on Iran.
Iran considered the decision of the International Court of Justice a judicial victory for it at the international level against America, despite the fact that the case was not finally settled, but the mere acceptance means that the case deserves consideration, and that there is American arbitrariness in the matter.
Trump's sanctions on Iran included a ban on government purchases of American cash (Al-Jazeera)
What is the future of returning frozen funds?
The introductions indicate the results. The Biden administration’s speech to the Security Council to cancel the economic sanctions imposed by Trump on Iran, as well as the acceptance by some countries of releasing some funds recently, especially after the numerous statements of Iranian officials, although in small amounts, as they say, “First rain drop then Pouring down. "
The coming days - especially the second half of 2021 - may witness a development in the negotiation file to return to the "5 + 1" agreement, which means reaching an agreement that allows the return of what is agreed upon in terms of funds, or at least agreement on a mechanism for returning these funds.
What supports the expectation that the second half of 2021 will witness a movement in the file of Iran's frozen funds, and the easing of economic sanctions on it;
Europe needs to return to its relations with Iran, as well as Japan and emerging countries, in order for the map of the great ambition of these countries to return to the plans of major projects for infrastructure in Iran, as well as the development of the oil, industry, and agricultural sectors, which guarantees great financial and economic returns for these countries.
But what happened through Korea, the Emirates, Iraq and Oman, to refund some of the frozen funds to Iran recently, will open the door for other countries, such as Japan, China and India, to take similar steps, especially since Iran greatly wants to import its needs of basic commodities and other tools from those countries, which is What is considered a good economic movement for the economic relations between Iran and these countries.
What does the return of frozen Iranian funds contribute to support its economy?
The issue of returning frozen funds to Iran abroad brings several advantages;
On top of which is restoring the local currency at the appropriate exchange rate against foreign currencies, as well as gaining the confidence of Iranian citizens in the local currency, and easing the tendency of citizens to hold foreign currencies.
The most important thing is after the return of frozen funds from abroad, because this will come within a framework that guarantees Iran’s return to the natural path of integration into the global economy, which means the return of foreign investments to the oil and natural gas sector, and Iran's production of large quantities that enable it to recover its economy, as well as the flow of oil and gas exports. Out.
There are other projects that were discussed during the final signing of the "5 + 1" agreement at the end of 2016, in terms of industry, infrastructure development, the banking system, and the return of the Central Bank and other Iranian banks to deal with all banks abroad.