US Says Iran Cannot Access Funds in Qatar Any Time Soon

The United States said on Thursday that Iran would not gain access any time soon to US$6 billion in Iranian funds parked in a Qatar bank last month as part of a prisoner exchange and that Washington retained the right to completely freeze the account.

The question of Iranian access to the funds has been in the spotlight since Palestinian Hamas militants attacked Israel on Saturday, killing more than 1,300 people and taking scores of hostages back to the Palestinian Gaza Strip.

"Iran will not be able to access the funds for the foreseeable future," a senior U.S. official, speaking on condition of anonymity, told Reuters.

U.S. Secretary of State Antony Blinken, speaking at a news conference in Tel Aviv, said that Iran had neither accessed nor spent any of the US$6 billion, adding: "We have strict oversight of the funds and we retain the right to freeze them."

Blinken said the U.S. Treasury oversees any disbursement to ensure it is used only for humanitarian purposes. Several U.S. media outlets reported on Thursday that the United States and Qatar had agreed to stop Iran from accessing the money.

Iran has made no secret of its backing for Hamas, funding and arming the group, but Iran's Supreme leader Ayatollah Ali Khamenei said on Tuesday that Tehran was not involved in the Hamas attack on Israel.

Iran's U.N. mission said the U.S. government was "acutely aware that they cannot renege" on the deal reached over the money, which was transferred to Qatar from an account in South Korea to make it accessible for Iranian humanitarian needs.

The Iranian oil revenues had been frozen in Seoul after Washington, under former President Donald Trump, placed a total ban on Iran's oil exports and sanctioned its banks in 2019.

"The money rightfully belongs to the people of Iran, earmarked for the Government of the Islamic Republic of Iran to facilitate the acquisition of all essential and non-sanctioned requisites for the Iranians," said Iran's mission to the United Nations in New York. It did not respond to a request for comment on whether Iran had yet tried to access the funds.

Qatar's International Media Office did not immediately respond to a request for comment. The U.S. Treasury Department declined to comment. White House national security spokesman John Kirby declined to speak about diplomatic conversations or "speculate ... about future transactions."

He said the money was intended to be disbursed "to approved vendors - that we approved - to go buy food, medicine and medical equipment, agricultural products, and ship it into Iran directly to the benefit of the Iranian people."

"Every single dime of that money is still sitting in the Qatari bank," Kirby told reporters, adding: "The regime was never going to see a dime of that money."

This is while the governors of the central banks of the Islamic Republic of Iran and Qatar on the sidelines of the annual meeting of the International Monetary Fund (IMF) discussed the issues related to the development of banking cooperation and joint investments after the transfer of US$6 billion to Iranian banks in Qatar, which has been materialized, and the solutions for developing relations using these sources.

Mohammad-Reza Farzin, the Governor General of the Central Bank of Iran (CBI), stated in that meeting, "Considering that Iran's freed financial resources can be used in Qatar through SWIFT and with openings of LCs , technical communication between Qatari banks and 6 Iranian banks is currently underway. By establishing these technical connections, the operating banks send and operate the necessary payment orders."

The CBI governor pointed to the provisions of the previous agreement between Iran and Qatar regarding the use of these funds in 6 Iranian banks in Qatar, stressing speeding up the issue in order to start the payments as early as next week.

Sheikh Bandar bin Mohammed bin Saoud Al-Thani, the Governor of Qatar Central Bank, for his part, emphasized in the meeting, "Qatar adheres to all its obligations with Iran and there is no obstacle in the development of banking relations between the two countries." The Qatari banking chief pointed to the fundamental and good measures that have been taken in the past few days regarding the use of Iran's financial resources in Qatar, saying, "The rumors raised about this in the past one or two days have no real value and were mostly like a joke and a media gossip."

Iran rejected a report that said the country had been barred from accessing its US$6 billion funds recently unfrozen and transferred to Qatari banks as reported by US media. Iran's permanent mission to the United Nations dismissed a report that claimed the United States and Qatar had agreed to prevent the Islamic Republic from accessing US$6 billion recently unfrozen and transferred to Qatari bank. The American daily the New York Times made such a claim.

"Wally Adeyemo, the deputy Treasury secretary, told House Democrats on Thursday that Iran would no longer have access to the funds, according to a person familiar with the matter. The money was under close supervision and strict conditions that it be used only for humanitarian purposes," the NY Times reported.

The US Secretary of State Anthony Blinken did not confirm the reports about the agreement between the US and Qatar to re-block the Iranian money in a Qatari bank.

Back in August, Iran and the United States agreed to a Qatar-brokered deal to secure the release of some US$6 billion of Iranian funds that had remained blocked in two South Korean banks since 2018 under the pretext of US sanctions. The money was successfully transferred last month to accounts held by six Iranian banks in Qatar’s Ahlibank and Dukhan Bank.

This year's IMF annual meeting is taking place in Marrakech, Morocco on October 9-15, 2023. - Reuters, Mehr