US Starts Talks With Qatar on Releasing $6 Billion in Frozen Iranian Funds

Use would be limited to purchases of humanitarian goods

The US has begun talks with Qatar on a plan that would allow Iran to use $6 billion in frozen funds held in the Gulf state to buy humanitarian goods. Washington appears to be positioning the move as an initial financial incentive in follow-up nuclear negotiations with Tehran after a ceasefire agreement.

The Wall Street Journal reported on June 19, citing people familiar with the matter, that the US is discussing how Iranian funds in Qatar could be used. The plan is designed to let Iran make limited use of part of the roughly $100 billion in Iranian assets estimated to be frozen worldwide.

Under the structure being discussed, the $6 billion held in Qatar would be used to pay for food, medicine and other humanitarian goods ordered by Iran's central bank. The mechanism for using the Qatari accounts could also become a precedent for handling other frozen Iranian assets held elsewhere.

The money came from sales of Iranian crude oil and was originally frozen in South Korea. It was later transferred to accounts in Doha in September 2023 after the Biden administration reached a prisoner-swap deal with Iran. The Financial Times had previously reported that Washington was moving toward releasing the funds, and the Journal said the US has now begun direct talks with Qatar.

A Qatar-based disbursement structure would make it easier for the US to monitor Iran's purchases. It would also give Washington a way to use continued access to the funds as leverage in future negotiations. Iran, however, has not yet agreed to the arrangement.

The proposal is one of several options the US is expected to present during two months of nuclear talks with Iran following the signing of a ceasefire memorandum. Article 11 of the agreement is said to state that the US would allow full access to frozen Iranian assets depending on progress in the final negotiations. A US official said the flow of funds would continue as long as Iran engages productively in the talks.

Experts say even a limited easing of the asset freeze could provide an economic buffer for Iran. It could also serve as a political signal of easing tensions between Washington and Tehran.

Still, some argue that Iran would receive a large reward before making meaningful concessions on its nuclear program.

Oh Se-seong, Hankyung.com reporter sesung@hankyung.com