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

Use would be limited to humanitarian purchases

The US has begun talks with Qatar on a plan to allow Iran to use $6 billion in funds frozen in Qatar to buy humanitarian goods. The move is intended as an initial financial incentive in nuclear negotiations expected to follow a ceasefire agreement between Washington and Tehran.

The Wall Street Journal reported on June 19, citing people familiar with the matter, that the US is discussing with Qatar how Iran could use the funds held there. The proposal is aimed at allowing Tehran limited access to part of the roughly $100 billion in Iranian assets estimated to be frozen around the world.

Under the structure being discussed, the $6 billion held in Qatar would be used for purchases of food, medicine and other humanitarian goods ordered by Iran's central bank. The way the funds in Qatari accounts are used could also set a precedent for handling other frozen Iranian assets elsewhere.

The money comes from proceeds of Iranian oil sales and was originally frozen in South Korea. It was later transferred to an account in Doha in September 2023 after the Biden administration reached a prisoner-swap agreement with Iran. The Financial Times had earlier reported on Washington's plan to unfreeze the funds, and the Journal said the US has now begun 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 leverage in negotiations over whether to keep allowing access to the funds. Iran has not yet agreed to the arrangement.

The proposal is one of several options the US could present during two months of nuclear talks with Iran after the signing of a ceasefire memorandum of understanding. Article 11 of the agreement is said to state that the US would allow Iran full access to its frozen assets depending on progress in final negotiations. "As long as Iran engages constructively in the negotiations, the flow of funds will continue," a US official said.

Experts say even a limited release of assets would provide some economic relief for Iran. The step could ease pressure on Iran's economy while also signaling a political thaw between the US and Iran.

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

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