Iran Confirms Accessing Frozen Funds - Says It Invited Grossi To Visit

The publication also said that Prime Minister Naftali Bennett will not meet with US Special Envoy Robert Malley who is visiting Israel to show his displeasure. The American envoy is seen as spearheading ‘a deal at any cost’ approach in the Biden Administration.

According to briefings received by Israeli officials the United States is willing to lift the most important sanctions in exchange for a simple cessation of uranium enrichment by Iran.

That would leave a considerable quantity of 20-percent and 60-percent enriched uranium in Tehran’s possession and all the enrichment equipment it has assembled recently.

The US had pledged to aim for a stronger agreement with Iran after it launched indirect talks in April but is now reportedly focused on stopping further enrichment.

This would be even more than Iran has been demanding during the past months, which is a return to the status quo of May 2018 when former president Donald Trump withdrew form the Joint Comprehensive Plan of Action or JCPOA.

Yahya Ale-Es’haq chairman of Iran-Iraq joint commerce of chamber and Hossein Tanhaee, head of the Korean chamber were responding to claims by Ali Naderi, the CEO of the government’s official news agency IRNA on Friday, that recently $3.5 billion of Iran’s frozen funds abroad were released.

This claim was followed on Saturday by Javan newspaper, affiliated with the Revolutionary Guard, that claimed $4 billion has been released “without negotiations”, but providing no details.

Ale-Es’haq told local media that Iraq has not freed any of the funds it owes Iran due to US banking sanctions and if the news about frozen money being released is true, it could be related to South Korea. Two banks in Seoul hold $7 billion also frozen because of US sanctions.

But Tanhaee separately told ILNA news agency late Saturday that South Korea also has not released any funds.

Last week, South Korea’s Yonhap news agency wrote after Korea's first vice minister for foreign affairs, Choi Jong-kun, talked by phone with the US special envoy for Iran, Robert Malley, that Seoul and Washington maintained communication over Iran, especially on Iranian assets locked in South Korean banks.

Neither the CEO of government news agency IRNA who had made the initial claim, nor Javan newspaper affiliated with the Revolutionary Guard presented any evidence or quoted an official source to back-up their claims. There have been no foreign official or media reports indicating that the United States has agreed with release of Iranian frozen funds.

An editorial Saturday in Javan said that within 100 days of Raisi taking office, not only had $4 billion been freed "without much negotiation” but also the "capacity of Iran's nuclear program has been growing.”

The paper contrasted these events with the two-year negotiations leading to the 2015 nuclear deal, the JCPOA (Joint Comprehensive Plan of Action), and with the failure of previous president Hassan Rouhani to secure the release of Iranian funds frozen by third parties wary of punitive United States action under its ‘maximum pressure’ sanctions threatening anyone buying Iran’s oil or dealing with its financial sector.

In a dig at Rouhani, whose strategy of deepening economic ties with Europe was thwarted by ‘maximum pressure,’ Javan noted that “sometimes not being eager to negotiate, particularly with Westers powers, produces better results.”

In a tweet Friday the CEO of the government official news agency (IRNA), Ali Naderi, said $3.5 billion of Tehran's frozen funds had been released. Naderi did not say where the assets were frozen but claimed they could soon be used for “trade,” presumably implying they might pay for exports to Iran rather than be transferred as cash.

Javan added $500 million to this figure on the grounds, it said, that the United Kingdom had finally agreed to pay a four-decade-old debt of £400m ($535m) owed Iran for weapons bought in the 1970s but never delivered.

The newspaper linked the release of frozen funds and Britain honoring the debt to the resumption of Vienna talks at the end of November on reviving the JCPOA. The pavements would give “a different perspective to the Vienna process," it said.

Iran has assets frozen in several countries including South Korea and Japan, largely for past purchases of Iranian oil, as well as in Iraq, India, and China. It was reported this week that China imported on average 560,000 barrels per day(bpd) of Iranian oil from the beginning of August until the end of October, but other Asian customers stopped buying it under US pressure.

$50 billion frozen

The semi-official Iranian Students News Agency (ISNA) in a report Saturday said Iran's assets frozen abroad amounted to $50 billion, including $8 billion in South Korea, $3 billion in Japan, and $6 billion in Iraq.

The ISNA report said that suddenly injecting all these assets into the forex market would push the exchange rate for the dollar to 150,000 rials or less. Nonetheless, the rial fell by 1,900 to 285,300 against the US dollar in the unofficial market Thursday.

Iranian officials have repeatedly made claims of the looming release of frozen funds, from Iraq in March for instance, but have not subsequently confirmed the transfer of money.

Last week South Korea’s Yonhap news agency wrote after Korea's first vice minister for foreign affairs, Choi Jong-kun, talked by phone with the US special envoy for Iran, Robert Malley, that Seoul and Washington maintained communication over Iran, especially on Iranian assets locked in South Korean banks, which it put at $7 billion.

The White House is required to affirm every six months that there is enough oil supply globally to maintain sanctions against Iran that were put in place in 2012, during Barack Obama's administration.

Biden's memo sent to Secretaries of State, Treasury and Energy comes in advance of a virtual meeting with China's President Xi Jinping on Monday, in what is expected to be the leaders' most extensive meeting since Biden took office.

Iranian media reported Biden’s statement amid general pessimism about the outcome of the talks to restore the 2015 nuclear agreement (JCPOA) and have the US sanctions lifted. The government’s news website IRNA, however, was quick in trying to instill optimism quoting a member of parliament’s energy committee on Saturday who said exports have gradually increased in the past few months.

China is the largest purchaser of Iranian oil, averaging purchases of more than 500,000 barrels a day over the last three months.

Chinese purchases of Iranian crude have continued this year despite sanctions that, if enforced, would allow Washington to cut off those who violate them from the US economy.

The Biden administration is currently not enforcing those sanctions ahead of forthcoming negotiations with Iran to revive the JCPOA.

"Consistent with prior determinations, there is a sufficient supply of petroleum and petroleum products from countries other than Iran to permit a significant reduction in the volume of petroleum and petroleum products purchased from Iran by or through foreign financial institutions," Biden said in the memo.

Biden administration diplomatic attempts to enforce the oil sanctions by persuading China to reduce purchases remain confidential, but critics believe the administration has not acted with determination to stop the trade.

Biden’s argument about sufficient oil supplies, however, is not so strong amid prices that have exceeded $80 a barrel. As gasoline prices have been rising in the United States, there is talk this week of the government releasing supplies form the Strategic Petroleum Reserves (SPR).

Almost all of Iran’s oil to China is shipped in illicit ways, with tankers transferring oil on high seas and documents fabricated to show other sources for cargoes. But Iranian officials and government-controlled media have claimed in recent months that Iran has been successful in exporting more oil to China.

No one knows how Chinese importers pay Tehran amid US banking sanctions on Iran but the role of intermediaries in selling cargoes to China and making payments to Iran has been reported. This means Iran is not recouping the full value of its exports.

With reporting by Reuters

The outspoken politician Ali Motahari, who was deputy-speaker in the previous parliament, said refusal to directly engage with the United States is simply a “revolutionary gesture and against the national interest.”

Supreme Leader Ali Khamenei has banned direct talks with the United States and the current key foreign policy players appointed by President Ebrahim Raisi who took office in August are known as hardliners close to Khamenei’s office. In recent weeks, Iranian diplomats have been demanding the US free Iran’s frozen funds as a “goodwill gesture” before Iran shows flexibility.

Motahari in his tweet went on to say that “In these past few years it became clear that Russia, China and Europe” are not the critical actors. Addressing the hardliners, he wrote that if Qasem Soleimani’s assassination is the reason for refusing to directly negotiate with the US, the decision to punish the perpetrators remains in place.

Soleimani, who was Iran’s top military and intelligence operator in the Middle East was killed in a US drone strike ordered by former president Donald Trump on January 3, 2019.

As Iran has delayed rejoining the Vienna talks for five months its economic crisis has deepened with the national currency rial falling 20 percent since Raisi took office.

Economists and financial experts in Tehran say that uncertainty about the nuclear talks is the main reason why the rial is losing value against major currencies. On Friday, two economists told the Fararu website that for the stability of rial all major sanctions should be lifted, but in the meantime negative and ambiguous statements by Iranian officials dissipates confidence and leads to rial’s fall.

Reports say that demand for US dollars has increased in recent days as people take advantage of their annual prerogative to buy up to $2,000 from legal currency dealers.

There is also the issue of approving financial reform bills that have languished for more than three years. The international Financial Action Task Force (FATF) has blacklisted Iran demanding legislation against money laundering and financing of terrorism. The designation by itself is enough to keep Iran’s banking relations with other countries restricted.

Iran has been spending from its currency reserves since US oil sanctions were imposed in 2018 and has resorted to printing money, which in turn has pushed inflation for essential goods to above 60 percent. Now, it planning to stop subsidizing food and medicine, which will push prices even higher, with all its political risk.

More and more public figures, including high-ranking clerics and politicians, such as Motahari, have been appealing to decision makers to speed up nuclear talks. Hardliners in charge of the government, on the other hand, are posturing to get more concessions from the United States.