Iran Aims To Submit Funds Frozen In South Korea To Arbitration

Earlier this week, the Biden Administration announced that some of Iran’s frozen funds in Iraq will go to Oman, acting as a conduit to release the money for purchasing non-sanctionable goods under US supervision. Iraq owes Iran around $11 billion for imports of gas and electricity, but US banking sanctions prohibit dollar transactions with Iran. In June, the US agreed to make $2.7 billion available for Iran’s humanitarian needs.

Despite this development, the Iranian currency, the rial, has not shown improvement and continues to trade at around 500,000 rials per US dollar, as its value has drastically depreciated in the past year. 

Businessman Masoud Daneshmand expressed doubts about the impact of the released funds, stating that the Iranian government would not receive any cash directly. Instead, after Iran purchases goods like wheat, it can present invoices, and Oman will release the money following US verification. Hence, the government will not have additional funds to impact the currency market.

Others, however, disagree with this perspective. Some argue that any released funds, even for food and medicine, could free up other foreign currencies for purposes such as supporting armed proxy groups in the region or producing military equipment such as drones that are supplied to Russia for its invasion of Ukraine.

Amidst the ongoing economic crisis, Iran’s annual inflation is estimated to be somewhere between 50-70 percent, in the absence of reliable figures. However, what is certain is that food prices have risen much faster. Media and even regime politicians have been saying for months that food price inflation is around 100 percent.

Nevertheless, Ahmad Kimiyai, an economist, believes that the release of frozen funds, though not in cash dollars, is still beneficial. It allows some assets to enter the country despite sanctions and can be used for humanitarian imports, addressing shortages of food and medicine.

However, he said it is much better that the money can be used for humanitarian imports instead of cash transfers. “This is better than if the money reached the government, because it might be tempted to do populist acts,” referring to cash handout schemes to the population. 

“Now we are certain that goods will be imported that can reach the people’s dinner tables,” and help with shortages of medicine, Kimiyai said.

On the other hand, businessman Kamran Soltanizadeh, who is the head of Iran’s currency exchangers indirectly criticized government propaganda highlighting that the US has released the frozen funds. He argued that there has been no official statement about exactly how much, when and how funds have been released.

He also stressed that the Iranian government is injecting dollars and other hard currencies into the forex market to support the rial, and if it were not for these interventions, the national currency would have fallen further.

After a complaint lodged by IRGC's Thar-Allah headquarters in the capital, and a trial, Behzadi received a six-month prison sentence on grounds of "publishing false content." However, in a subsequent decision, the court opted to amend the sentence to a one-year prohibition from engaging in any form of media responsibility.

The Thar-Allah Headquarters, is a command within the Islamic Revolutionary Guard Corps, responsible for security in the Tehran area. This means it is the principle military force organzing suppression of protests.

The charges against Behzadi primarily stemmed from an interview conducted by Etemad with Dariush Farhood, a revered figure in the field of Iranian genetic science and his alleged abduction by plainclothes agents. Another complaint concerned an article highlighting the arrest of cinematographers and artists who stood in solidarity with the people during nationwide protests.

The court contended that the interview with Farhood presented information that was deemed “false and misleading”.

The case's outcome brings to attention the ongoing challenges faced by media professionals in Iran, where press freedom has been a contentious issue for decades. The 2023 World Press Freedom Index, as compiled by Reporters Without Borders (RSF), ranked Iran at the lowest position on the list, marginally above countries like Vietnam, China, and North Korea, reflecting the gravity of the situation.

Throughout the years, Iran has incarcerated hundreds journalists, writers, and bloggers, often accusing them of jeopardizing national security by expressing their opinions. Tragically, some of these individuals have lost their lives while in detention.

The Harakat Hezbollah al-Nujaba group, a part of Iran-backed Shiite militia Hashd al-Shaabi – also known as Popular Mobilization Forces – warned of consequences to the US military presence and its dominance over Iraq's oil sector and its economy.

Akram al-Kaabi, Harakat Hezbollah al-Nujaba's leader – a US-designated terrorist who is regarded as one of the main operatives of Iran’s Revolutionary Guards' Quds Force in Iraq – said, “this is the last warning” to Americans who have flooded the country with ongoing political and economic crises. “We have repeatedly warned about the US interference in the country’s internal affairs and provoking strife,” he said.

The leader of the group -- unofficially operated by the IRGC's Quds Force that provides funding, weapons, and training to its members – added that if the US forces do not leave Iraq and Washington does not stop “blatant interference and evil in our country, there will be broad and decisive measures by the heroes of Iraq who did not and will not accept humiliation and indignity.”

The remarks came in a statement on Wednesday after 14 Iraqi private banks sanctioned by Washington over helping to siphon US dollars to Iran said they were ready to challenge the measures and face audits and called on Iraqi authorities to provide assistance.

US financial authorities last week barred the Iraqi banks from conducting dollar transactions as part of a wider crackdown on dollar smuggling to Iran via the Iraqi banking system. The latest sanctions, along with earlier sanctions against eight banks, have left nearly a third of Iraq's 72 banks blacklisted, two Iraqi central bank officials said.

Haider al-Shamma, speaking on behalf of the 14 sanctioned banks, said on Wednesday the sanctions could further weaken Iraq's currency, which has fallen from under 1,500 dinars per US dollar last week to 1,580 as of Wednesday.

The dinar tailspin against the dollar has worsened since the New York Federal Reserve imposed tighter controls on international dollar transactions by commercial Iraqi banks in November to halt the illegal siphoning of dollars to Iran.

Iraq's central bank says the dinar's depreciation is also tied to merchants, including some undertaking illegitimate financial transactions, sourcing currency from the black market rather than the official platform. Under the curbs that took effect in January, Iraqi banks must use an online platform to reveal their transaction details. But most private banks have not registered on the platform and resorted to informal black markets in Baghdad to buy dollars.

Iran International revealed in May that Qassem Soleimani, an aide to former IRGC’s Quds force commander, is a key figure in money laundering for Tehran. Earlier in the year, Iran International also unraveled some details about the inner workings of a Quds force unit tasked with smuggling money from Iraq to Iran, proving that the Islamic Republic’s embassy in Iraq is also involved in money laundering operations aimed at funneling revenues from oil and gas exports back to Iran.

This financial network is bypassing the US sanctions at the cost of the Iraqi economy. An informed source in Baghdad told Iran International late in December that Washington has received reports that Iraq is still conducting trade with Iran using US dollars despite sanctions.

The Jewish Insider reported that committee Chairman Michael McCaul said officials had not been able to offer details on Malley’s status regarding an investigation over his security clearance.

Iran International first reported June 29 that Malley’s security clearance had been suspended and he has been under investigation related to his handling of classified documents. The Federal Bureau of Investigation is reportedly involved in the investigation, although until now no official details have been announced, except that Malley is on “unpaid leave.”

Chairman McCaul (R-TX) had threatened the Biden administration with subpoena if they failed to brief his committee on Malley’s status. While he had been suspended perhaps as early as April, the administration did not inform Congress about it.

“We don’t really have any details” on the Malley investigation “because it’s an ongoing investigation,” McCaul said according to the Insider. He also said that the administration will likely not be able to provide a full briefing until the investigation ends.

A spokesperson from the Committee told Iran International that officials refused to provide any significant new information, including the reason Malley's security clearance was revoked, citing the Privacy Act, but the Committee will try again to obtain more information.

McCaul was quoted by the Insider as saying, “They couldn’t get into the details,” adding, “the question is, is the FBI involved because if they are, then that’s a national security problem.”

Malley who was chief US nuclear negotiator with Iran has been replaced by Abram Paley as acting envoy.

Amid immense financial pressure faced by Iranians all over the country, Molavi Abdolhamid delivered a compelling Friday prayer sermon, emphasizing the need for support from the authorities and compassion for the situation of regular citizens.

Addressing the congregation, Abdolhamid criticized the common practice of attributing inefficiencies and problems to external "enemies." He was referring to the term "enemy," often used by Supreme Leader Ali Khamenei and his loyalists to refer to the United States, he deemed it incorrect to solely blame external factors for internal issues, particularly in relation to domestic economic challenges.

During the Friday prayer, which coincided with the 10th of Muharram and the Day of Ashura, Abdolhamid, the Imam of Zahedan said, "No government, whether Muslim or non-Muslim, should resort to violence against its own people merely to ensure its survival."

He further stressed that the regime, its rulers, and the entire system owe their existence to the people, adding that the right to govern and elect officials lies with the citizens, and therefore, it is essential to listen to their voices and their concerns.

As the sermon concluded on the 43rd Friday of protests in Zahedan, Abdolhamid urged demonstrators to leave the mosque without engaging in chanting or further protests. During the previous two Friday prayers, worshipper and protestors honored Abdolhamid’s request and observe silence as a sign of respect for the sacred days of Muharram.