The Trump administration is asserting that billions of dollars in frozen Iranian assets will not be directly transferred to Iran's government, countering concerns that the White House might be enabling a significant adversary. A senior U.S. official stated that the funds are intended to function as an escrow, with payments directed to vendors supplying humanitarian goods rather than to Tehran.
"There's no big handouts, there's no big tranches of cash," the official told The Post. Under the framework associated with ongoing U.S.-Iran negotiations, Iran can request purchases of items such as food, medicine, and other humanitarian supplies, but the money would not be given directly to the regime. Instead, payments would go to companies providing agricultural products, medical equipment, or other approved goods.
This approach to humanitarian spending originates from a $6 billion fund held in Qatar. This fund was released by the Biden administration in September 2023 as part of a prisoner swap that secured the return of five detained Iranian-Americans in exchange for five Iranians held in the U.S. U.S. officials have previously indicated that payouts from this fund were put on hold following the Oct. 7, 2023, Hamas attacks in Israel.
The U.S. maintains that this arrangement grants Washington complete control over the pace and scope of any economic concessions, while also providing Iran with incentives to continue cooperating with nuclear inspections and other negotiated provisions. The system is designed to ensure that the money never enters Iranian government accounts and can be immediately halted if negotiations falter.
"Every single piece of this process, we retain control," the official said. "If at some point in the process the Iranians stop walking this path with us, payments stop. We can freeze the whole thing." The $6 billion fund originated from Iranian oil sales to South Korea years ago. The Biden administration permitted its transfer to Qatar in 2023 for humanitarian purchases. The U.S. placed a hold on these payouts after the October 7th attacks.
This $6 billion is separate from an estimated $10 billion Iran could generate through oil sales over a 60-day period of waived oil sanctions granted by the U.S. as part of a Memorandum of Understanding (MOU), which also lifted the American blockade on Iranian ports. U.S. officials have minimized the impact of this sanctions waiver, noting that Iran was already engaged in black market oil sales despite existing sanctions. However, experts suggest the waiver has facilitated quicker cash generation for Tehran by providing access to legitimate banking networks.
Behnam Ben Taleblu, senior Iran program director at the Foundation for Defending Democracies, commented on the policy shift, stating, "There is a world of difference between doing what you can to stop the world's foremost state sponsor of terrorism from getting more dollars, to turning a blind eye to literally enabling it." The arrangement also does not include an estimated $300 billion in reconstruction investments in Iran that the U.S. aims to secure from private companies in the Gulf and globally, contingent on Tehran reaching a final agreement with Washington. Officials reiterate that any released funds would be disbursed in small increments tied to specific, non-Iranian transactions, ensuring the money does not directly reach Iran.
The administration argues this structure aims to address humanitarian needs within Iran while preventing the regime from diverting funds to military activities, proxy groups, or its nuclear program. This aspect of the broader negotiations remains politically sensitive, with critics warning that any sanctions relief could ultimately empower Tehran. They contend that even indirect financial benefits are problematic, as fungible money can free up other resources for illicit purposes.
"We just got out of two direct conventional conflicts and a blockade with this regime, so anything that relieves the pressure frees up more revenue and more resources to build back better," Taleblu said. The MOU reportedly forbids Iran from supporting terrorism, and the administration has stated that frozen funds can be revoked if such activities are detected.