Iran's frozen assets, the last major stumbling block in negotiations with Washington

Public statements and leaks indicate negotiations with Iran are moderately on track, with water beginning to fill the negotiating process after a three-month dry period. Key stumbling blocks remain, especially frozen Iranian assets held in third countries. The pool is described as roughly one-third of Iran’s GDP and could provide an economic lifeline for the regime. The assets are mainly funds in foreign checking accounts, with smaller amounts in real estate. Many funds originate from oil and gas exports to third countries, while some come from payments for arms transactions disrupted by the 1979 Revolution. Iranian authorities seek access for medicines and basic goods, but access depends on U.S. approval. The assets were frozen through secondary, extraterritorial sanctions that restrict third-country entities from doing business with Iran.

"Talks to end the war with Iran and reopen the Strait of Hormuz appear, for the first time in three months, to be moderately on track. At least that is the impression conveyed by public statements and leaks from both sides: water is beginning to fill the deep negotiating well, which until now had been practically dry. There remain, however, some significant stumbling blocks. Chief among them according to hints from Iranian authorities last weekend are the frozen assets owned by the Islamic Republic."

"A vast pool of money, equal to about one-third of the Asian country's GDP, held in third countries and which Tehran now hopes to recover and that would offer the Iranian regime an economic lifeline that could help ensure its survival. What are these frozen assets? They are funds generally deposited in checking accounts at foreign banks and, to a much lesser extent, real estate. Most stem from exports of oil and gas to third countries, not to the United States, although some are payments Tehran made to Western countries for arms transactions that never took place: the 1979 Revolution disrupted those deals and the sums already handed over were seized."

"Iranian authorities have for years tried to persuade the countries holding those assets to loosen restrictions, stressing that the ultimate use would be the purchase of medicines or other basic goods, now scarce in the country and exempt from sanctions. Without success, of course: until the U.S. gives the green light, Tehran cannot access them. How did the U.S. get those funds frozen? Thanks to so-called secondary or extraterritorial sanctions. Most economic penalties on Iran are primary: a sanctioning country or body (such as the UN Security Council or the EU) prohibits its companies and citizens from trading with Iran."

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