The war over the frozen funds of Iran

More than $10 billion belonging to Iran is frozen in banks in Seoul and Baghdad. Ever since Biden took office there have been negotiations between the sides on the release of the funds. So far, the US has prevented it

The change of the administration in the White House in January started negotiations between Iran and the US and Europe on a return to the nuclear agreement. But not only that. Joe Biden's entry to the Oval Office changed the hawkish line toward Iran from the days of Donald Trump. This approach spurred Iran to take action on two parallel vectors for the release of frozen funds: the Korean track and the Iraqi track. 

In Korea, Iranian funds that were supposed to be transferred to Tehran in exchange for oil acquired by Korea are frozen. In Iraq, funds intended to pay Tehran for the supply of electricity are frozen. "According to Iran, Iranian accounts in the Trade Bank of Iraq hold about 3.5 billion dollars, which make up a share of the debts of the Iraqi government to Iran for the import of electricity and gas," according to a report by the Meir Amit Intelligence and Terrorism Information Center.

"On March 6, the Iranian President, Hassan Rouhani, spoke with the Iraqi Prime Minister, Mustafa al-Kazimi, and complained about the delays in releasing the Iranian funds in Iraq, and called on them to be unfrozen immediately. An Iraqi official was quoted by the al-Jazeera network stating that the United States permitted to use some of the Iranian funds held in the Trade Bank of Iraq (TBI) to finance purchasing of humanitarian goods."

In February, reports that Seoul was ready to release to Iran billions of dollars of the frozen funds started to appear. Iranian Foreign Minister Mohammad Javad Zarif claims that there are close to $10 billion worth of Iranian funds in South Korea. A report by Bloomberg claims that there are $7 billion. There is also conjecture that the amount stands at about $8.5 billion.   

According to a report by Yonhap, South Korea offered to release part of the Iranian funds to a bank account in Switzerland that will be used for humanitarian purposes following Iran's seizure of a South Korean tanker and its crew in January. 

Even by the minimum estimate, there is about $10.5 billion frozen in banks in Iraq and Seoul. At this stage, the Americans have their foot on the brake and are not allowing the transfer of funds to Iran. However, according to reports online, the sides are negotiating the release of part of the money for humanitarian purposes.  

How can the US supervise "humanitarian expenses"? That is an open question. If the payment is made directly to the supplier of equipment that will send it to Iran, so be it. But if the money is transferred to bank accounts in Iran, the US will have no actual way of monitoring its use.