Will a US-Iran deal unlock $300bn in investment fund for Tehran?
The Trump administration has been adamant the investment fund is not a payout for Iranian enriched uranium. The US-Iran memorandum of understanding expected to be
The Trump administration has been adamant the investment fund is not a payout for Iranian enriched uranium. The US-Iran memorandum of understanding expected to be formally signed in Switzerland on Friday could allow for the establishment of a $300bn investment fund for Iran, as part of a broader settlement to end the war that triggered a global energy crisis and upended markets worldwide. US Vice President JD Vance told CBS News on Monday that the incentives would be connected to Iran’s “performance” in adhering to the deal, which was digitally signed by both sides on Sunday. The scale of the financial incentives grabbed the headlines due to US President Donald Trump’s longstanding criticism of a 2015 nuclear accord that he claimed delivered economic benefits to Tehran. In a bid to manage perceptions around this politically sensitive issue, Trump took to his Truth Social platform to claim that “the story that the US is paying Iran 300 million Dollars is Fake News,” while Vance told CBS News that the money would not be a US payout in exchange for Iran’s enriched uranium. “When people say that billions of dollars of assets will be released, that’s not true,” the vice president told the CBS Morning programme. “What is true is that Iran will have a much better and much more prosperous future if they meet the obligations they make in this agreement.” What do we know about the $300bn investment fund? Vance said the deal “fundamentally extends a hand to Iran and says, ‘Look, if you guys are willing to honour your obligations, if you’re willing to allow real inspections of your nuclear programme, then we will welcome you back into the world economy.’ “That’s the sort of thing they could have access to, funded by the Gulf Coast coalition, so long as they honour their end of the obligation,” Vance told CBS. He also claimed that while US money would not be injected, economic opportunities could arise once Iran repositions itself in the global economy. The New York Times quoted sources saying the fund would not come from governments but be created for companies eager to invest in Iran.
Muhanad Seloom, a non-resident senior fellow at the Middle East Council on Global Affairs, said the setup was a no-lose solution for Washington. “If Iran reforms, the administration owns the peace; if it doesn’t, the US loses nothing and the Gulf carries the risk,” he told Al Jazeera. What about the Iranian frozen assets? Seloom said the idea of an investment fund was built precisely to escape the optics of releasing Iran’s frozen funds. While the exact amount of Iran’s frozen assets is unclear, official Iranian reports and experts have set the total amount at more than $100bn. Iran’s economy has been crippled due to years of sanctions imposed on the country by the United States and other nations following the Islamic revolution in 1979, and then amplified over Iran’s nuclear and ballistic missiles programmes. These measures have restricted Tehran’s ability to access its own assets, such as revenues from oil sales, which have been frozen in foreign banks. Tehran was granted sanctions relief in the wake of the landmark 2015 nuclear deal signed under President Barack Obama, but Trump tore it up in 2018 during his first term. The 2015 deal had put limits on Iran’s nuclear enrichment in exchange for sanctions relief. Iran’s state-affiliated Mehr News agency reported on Sunday that the 14-point draft memorandum of understanding provided for the release of $24bn in frozen Iranian assets. Pressed by CBS News on the possibility of releasing frozen funds, Vance said the $24bn figure “just doesn’t appear anywhere in any of the texts that we’ve talked about with the Iranians”. “What we have said is that we’re willing to talk about unfreezing assets, but a much, much bigger deal is unsanctioning their economy – so long as they make the long-term commitments on the nuclear programme,” the vice president added. For Iran, where the war inflicted an estimated $29bn damage and the population is struggling with the highest inflation rate since 1942, the investment fund may constitute a much-needed lifeline. But the optics will not be as favourable, raising a “dignity problem”, Seloom said.
The BriefWire