The recent memorandum of understanding signed between the United States and Iran in the Pakistani capital Islamabad has opened the door for Tehran to access billions of dollars of its financial assets held and restricted around the world as a tool of mutual political and economic pressure.

Article 11 of the Joint Diplomatic Memorandum stipulates Washington's explicit undertaking to make frozen or restricted Iranian funds and assets available for full use immediately upon the commencement of the implementation of the agreement, with the two parties committing to agree on release mechanisms during the negotiations, and the issuance of all necessary licenses and permits by the United States through the Office of Foreign Assets Control (OFAC) to make these funds fully available for the payment of payments to any end beneficiary designated by the Central Bank of Iran.

Mixed estimates

Current economic estimates of the size of Iran's assets listed abroad ranged between $80 billion and $120 billion, depending on the different legal and financial definition of the covered assets and the extent of their actual access. International financial analysis reports have shown that there is no standardized official statistics for these funds due to the complexity of their legislative nature, with experts pointing out that the liquid and actual available value may be less than the $80 billion limit, given that a large part of these balances, especially those located in China, are held in the form Escrow escrow accounts or barter trade agreements are completely illiquid, limiting Iran's ability to act freely or convert them into direct cash.

Historical roots

The story of the freezing of Iranian funds began in the wake of the 1979 Islamic Revolution and the infamous American hostage-taking crisis at the Washington embassy in Tehran, which marked the major turning point in the severing of economic and diplomatic ties between the two countries.

Historical records of the US State Department monitored the response of then-US President Jimmy Carter by freezing about $12 billion (worth of at the time) of Iranian assets, in one of the earliest and most prominent uses of the International Economic Emergency Act (IEEPA), before the freeze expanded over the past four decades to become hostage to thorny political and security files, most notably international concerns about uranium enrichment levels, the accumulation of stockpiles in the nuclear program, the development of ballistic missiles, and support for groups armed in the Middle East.

Distribution Map

Iran's retained balances were distributed mainly in Asian and European banks as a result of the accumulation of revenues from oil, gas, and energy sales during periods of tightening international sanctions.

Financial data published by the US Treasury Department revealed that China holds the lion's share with assets ranging from $20 billion to $50 billion, followed by the Republic of Iraq with energy and electricity dues of between $6 billion and $15 billion, while India and South Korea hold about $7 billion each ($6 billion of Korean funds were transferred to accounts restricted in Qatar in 2023), in addition to balances in Japan ranging from $1.5 to $3 billion, and about $1.6 billion frozen In Luxembourg, Clearstream is in a complex legal dispute, along with $2 billion frozen directly within the United States.

Release mechanisms

The expected release and transfer plans under the June 2026 understandings relied on strict control mechanisms to ensure that funds do not flow in cash and directly to Tehran's treasury to avoid being used for military purposes. According to forecasts issued by clearing centers and international banks, the gradual release will be linked to concrete nuclear and security commitments, with estimates circulating that between $12 billion and $24 billion could be freed in the first phase through banking channels in third countries such as Qatar and Oman to purchase humanitarian and medical goods only, or through the activation of conditional licenses for the "OFAC" office, and the expansion of direct bargaining trade to secure commodity imports, in an attempt to save the Iranian economy, which suffers from chronic inflation exceeding 40% and a sharp decline in the value of the local currency. riyals).

Iranian sources confirmed that the issue of frozen Iranian assets is one of the most complex files that reduce the overlap of politics and economics in international relations over the past four decades.

When the landmark nuclear deal (JCPOA) was signed in 2015, Iran's economy breathed a sigh of relief after being granted access to a large part of its restricted funds, before President Donald Trump's withdrawal in 2018 and his imposition of a policy of "maximum pressure" re-closed these accounts and re-accumulated balances in global banks.

The Iranian sources pointed out that the Islamabad memorandum of understanding in June 2026 came to repeat the same cycle within the equation of "money for commitments", as Washington is aware that the economic recovery file is the most sensitive card for the decision-maker in Tehran, while Iran sees these funds as a sovereign right that hinders its long-term development and the average citizen bears its economic and living costs directly.