Confusion About 'High-Level' Visit Tuesday Over Iran's Frozen Funds

Hossein Amir-Abdollahian, who was speaking at a meeting of officials dealing with foreign economic relations in Tehran, referred to Washington’s requests for direct talks with Iran and said that the United States should show goodwill. He emphasized that Tehran had asked the USto release some of Iran’s frozen funds prior to a final nuclear agreement but had received no positive reaction.

Amor-Abdollahian first made a direct demand in September 2021, while visiting New York, for the US to greenlight the release of $10 billion from Iran’s frozen funds.

Amir-Abdollahian once again on Sunday reiterated that Iran stands and will continue to stand on its “red lines” in the Vienna nuclear talks.

“The Americans continuously speak of the need for direct talks with Iran. After examining the issue and considering the views the Americans have, we did not find a benefit in direct talks,” he said. Amir-Abdollahian added, that the US “has not done anything positive” to provide confidence.

The chief Iranian diplomat’s remarks did not seem to be suggesting a new formal pre-condition for an agreement in Vienna, but it did appear that he wanted to emphasize the need for some sort of “goodwill” by the Biden Administration.

The negotiations stalled in mid-March after 11 months of talks among the original signatories of the 2015 nuclear agreement known as JCPOA, apparently because of Iran’s demanded from the US to remove its Revolutionary Guard from the list of foreign terrorist organizations.

At one point in his remarks, Amir-Abdollahian said that talks came to a halt after Russia’s invasion of Ukraine and the Western side told Iran that even if all outstanding issues were resolved, Russia would not agree to finalize a deal. In fact, Russia did make a new demandright before the talks ended in Vienna asking the US for waivers from Ukraine sanctions in its dealings with Iran.

Amir-Abdollahian maintained that instead of showing any goodwill, the United States imposed new sanctions on certain Iranian individuals and companies. He suggested that President Biden could release frozen funds with just one “executive order.”

He repeated that Tehran told Washington, “Not to create hurdles” and delay an agreement. “If our red lines are observed,” we can reach a good and lasting agreement, and now “it is the American side that must demonstrate goodwill,” Amir-Abdollahian said.

He added that the diplomatic path is open and claimed that the three European participants in the talks, the United Kingdom, France and Germany are also unhappy about unreasonable American demands.

The foreign minister emphasized that the people of Iran should know the government is striving for an agreement and lifting of sanctions, but he also repeated government’s policy of self-reliance in overcoming the impact of sanctions.

Iran’s economy continues to struggle amid a 40-percent annual inflation rate and a host of other serious issues mainly caused by US sanctions imposed by former president Donald Trump after he withdrew from the JCPOA in 2018. Criticisms and a general mood of despair has intensified in recent weeks as food prices continue to climb, and the government has no immediate solution to offer.

One report suggested that the United States has refrained so far from sending a counterproposal to Iran regarding its demand that the Revolutionary Guard be removed from the US Foreign Terrorist Organization list as a pre-condition to reviving the 2015 nuclear deal, the JCPOA.

Talks in Vienna that have lasted one year were close to completion at the end of February as the Russian invasion of Ukraine began. But then Iran that was insisting all along for the removal of all US sanctions imposed since 2018, demanded the delisting of the IRGC. The US position in the talks is that it will remove major sanctions related to Iran’s nuclear program, but not other sanctions that are related to terrorism or human rights violations.

Once the issue became public, opposition in the United States grew. Most Republicans and many Democrats openly put pressure on the White House not to delist the Guards, that are known to have caused mayhem in the Middle East by supporting a large network of militant groups, all the way to the Mediterranean shores and beyond.

The opposition made it less likely for the Biden team to agree to Iran’s demand, specially as Democrats face an uphill battle in the November elections.

But a nuance in White House statements leads to the possibility that President Biden might be thinking to delist the IRGC but not its extraterritorial Qods (Quds) Force, which is Iran’s direct arm for building up anti-US, anti-Israeli, and anti-Saudi forces in the region.

An opinion piece by David Ignatius in the Washington Post on Friday mentioned that sanctioning the IRGC in 2019 was somewhat of a controversial issue, as some in the government and outside experts believed the multi-faceted entity was not only Iran’s main military force but also a major player in Iran’s economy and the public sector in general.

But opponents of giving a reprieve to the IRGC argue that separating it from the Qods force would be a wholly artificial distinction, just as trying to distinguish between the political and military wings of Hamas or Hezbollah. The US has traditionally rejected such a distinction.

Frequent Iranian threats directed at the United States and Israel are officially pronounced by the Revolutionary Guard, not just by the Qods Force, which speaks occasionally. Practically, the IRGC might even officially disband the Qods and create another outfit overnight that would carry out the same mission in the region.

The issue is Iran’s anti-West ideology kept alive by Supreme Leader Ali Khamenei who reinforces it in every public speech. Every Iranian government entity is supposed to fight against the archenemy, America, and Israel, according to the official dictum of the Islamic Republic.

Even at the height of improved ties in the wake of the JCPOA, Khamenei declared in 2016 that the Islamic Republic had no intention of cooperating on regional disagreements with main enemy the United States and “evil” Britain. He repeated the same message in November 2017, before former president Donald Trump had pulled out of the JCPOA and imposed sanctions.

The Biden administration, however, believes that the revival of the JCPOA is important to delay Iran’s nuclear breakout timeline, while opponents believe in continuing ‘maximum pressure’ sanctions until the regime is crippled or collapses.

On Thursday, Chairman of the Joint Chiefs of Staff Gen. Mike Milley told a Congressional hearing that he opposes removing the Islamic Revolutionary Guard Corps (IRGC) from the US terror list and believes the Qods Force to be a terrorist organization.

“I’d say that the President shares the chairman’s [Gen. Milley] view that IRGC-Quds Forces are terrorists, and beyond that, we aren’t going to comment on… topics in the nuclear talks,” Deputy State Department Spokesperson Jalina Porter said.

Negotiations that started one year ago in Vienna to revive the 2015 nuclear deal known as JCPOA are in a state of limbo after Iran demanded the removal of IRGC from the US Foreign Terrorist Organization blacklist. The Biden Administration has apparently not made a decision on Iran’s demand.

Most Republicans and many Democratic lawmakers have increasingly voiced opposition to delisting the IRGC, which has created a network of militant proxy groups in the Middle East and threatens US allies.

The nuance in the State Department statement is about whether President Biden considers the whole of IRGC a terrorist organization or is trying to only keep the Qods Force on the terror list and remove the larger organization to reach a deal with Tehran.

Chairman of the Joint Chiefs of Staff General Mark Milley told the Senate Armed Services Committee on Thursday, "In my personal opinion I believe the IRGC Quds Force to be a terrorist organization and I do not support them being delisted from the Foreign Terrorist Organizations (FTO) list."

Milley’s remarks were worded very carefully as he differentiated the IRGC from the Quds Force -- its extraterritorial military wing – suggesting that the Biden administration may considering delisting the IRGC as an FTO but keeping its Quds Force as a terrorist organization.

Such a move may be intended to resolve one of the remaining issues in talks to restore the 2015 nuclear deal known as the JCPOA that have reached a deadlock over Iran’s demand to delist the IRGC.

The Trump administration added the IRGC to the list in 2019. Iran insists that delisting the IRGC is a requirement and 'red line' for a deal, and its foreign ministry blames Washington for the delay in reaching a deal, saying the halt in the Vienna talks is due to US failure to make a "political decision".

The Biden administration has apparently not made a decision yet, amid rising opposition by Republican congressmen as well as a growing

Treasury Secretary Janet Yellen said Wednesday that Iran would not be able to receive in US dollars its special drawing rights (SDRs), a supplementary asset allocated by the IMF as a potential claim on the “freely usable currencies of member states.” The system is used by the fund to assist member states in the interests of the global economy, with the largest ever allocation approved in August 2021 to help countries cope with the Covid-19 pandemic.

Iran has been short of foreign reserves, especially dollars, since the US in 2018 imposed ‘maximum pressure’ sanctions threatening third parties buying Iranian oil or dealing with Tehran’s financial sector. Talks in Vienna between Iran and world powers have been taking place for a year to revive the 2015 Iran nuclear deal, which eased sanction in return for curbs on Iran’s atomic program.

Yellen’s remarks came in response to Louisiana senator John Neely Kennedy − an opponent of the 2015 Iran nuclear deal − who said Wednesday he wanted to know why the US administration was ‘supporting’ the IMF in allocating SDRs to Russia, Iran, and China.

The senator told the Washington Examiner that not enough attention was paid to what he claimed was the US backing the allocation of $650 billion in SDRs in 2021. Kennedy appeared to be referring to the total amount of SDRs allocated last year – by the IMF, not the US administration − expressed as a dollar equivalent.

‘Gift to Iran’

The Washington Examiner claimed Iran had in 2021 received $4.5 billion in SDRs, Russia $17 billion, and China $40 billion. “We ought to hold hearings and ask why” the US had approved this, Kennedy said. “There is some reason they wanted to do this, this is a gift to Iran, it’s a gift to China.”

Abdolnaser Hemmati, then governor of the Central Bank of Iran, said April 19, 2020, that Iran had asked to receive its SDRs as allocated by the IMF, which he valued at 3.6 billion in terms of US dollars.

SDRs are set in terms of a basket based on the US dollar, the Chinese renminbi, the euro, the Japanese yen and the British pound. A recent IMF paper highlighted the long-term decline of the dollar in international reserves, losing ground both to the Chinese renminbi and smaller currencies, and there has been growing criticism of the US ‘politicizing’ the dollar as an international currency. Despite US and western European sanctions, Russian international reserves increased $2.1 billion over the week ending April 1, reaching the equivalent of $606.5 bn, according to the Bank of Russia. Europe continued to buy oil and gas from Russia, but most of the reserves are frozen by Western sanctions.