News ID: 324442
Published: 0432 GMT October 03, 2022

What the release of Iran’s funds says to other countries

What the release of Iran’s funds says to other countries

Jafar Qannadbashi Expert on International Affairs

It was recently announced that the U.S. has greenlit the release of $7 billion of Iran’s frozen funds in South Korea. The issue has been on Iran’s agenda for years to no effect. The fact that the accomplishment comes at this period can be explained by two factors, one of which is external in nature, and the other internal.

The external factor involves the United States. The fact that only the approval of the U.S. was needed to unblock Iran’s assets shows that the sanctions against Iran were unilaterally imposed by the U.S. and lacked the support of the UN. On account of the Ukraine war dragging on and the next U.S. congressional election fast approaching, the Americans realized that they must give a concession to Iran. They need Iran’s crude oil and consider the escalation of tensions with Iran not to be in their best interests. Therefore, as I’ve stated before, the Americans are ready to revive the JCPOA, but they want to sign the deal in a way that does not imply a failure for the U.S.

Meanwhile, South Korea was inclined to release Iran’s assets because it has cost the Eastern Asian country some vast markets in Iran and inflicted great financial losses on its companies. So, it seems that Seoul’s push was consequential in releasing the funds.

The internal factor, however, concerns the policies of the incumbent Iranian administration. During the nuclear talks, the administration invested all of its effort in ending the sanctions and refrained from tackling fringe issues that do not fall within the framework of the JCPOA.

It is also noteworthy that Iran has adopted various strategic approaches in its foreign policy including developing relations with neighboring countries, gaining membership in the Shanghai Cooperation Organization (SCO), and promoting ties and cooperation with China and Russia.

In effect, Tehran decided not to tie the resolution of economic problems to the revival of the JCPOA. Even though it has striven hard to lift sanctions, it has also simultaneously pursued the approach of neutralizing the effect of sanctions. These policies delivered and, in fact, blunted the sharp edges of the sanctions. Even the Americans came to the same conclusion that sanctions no longer seem to be heavily impacting Iran’s economy.

Releasing Iran’s frozen assets in South Korea is significant in another respect, and that concerns the psychological effect it had on domestic markets which is summed up in the phrase, “The walls of sanctions finally came down”. The injection of such a sizable amount of money into Iran will definitely help solve the country’s current economic problems and stabilize markets.

Moreover, it also conveyed the following message to other countries: You can show greater courage and tenacity in cooperating with Tehran.



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