Iranian Diplomat Says US Had To Release Funds With No Nuclear Deal
Iran succeeded in freeing its blocked funds without the revival of the JCPOA nuclear accord, Tehran’s chief negotiator Ali Bagheri-Kani told the state television.
Iran succeeded in freeing its blocked funds without the revival of the JCPOA nuclear accord, Tehran’s chief negotiator Ali Bagheri-Kani told the state television.
The United States was insisting all along during nuclear talks that Iran’s funds would be released only after a nuclear deal was reached, Bagheri-Kani said during a television interview Thursday evening. However, “Iran’s diplomacy shaped conditions in such a way that the Americans were forced to retreat from their position and free Iran’s funds outside the framework of a [nuclear] agreement.”
Earlier this month, Iran and the United States announced that $6 billion frozen in South Korea due to US sanction will be released through Qatari mediation, as Iran moved five US hostages from prison into home detention. The Iranians insist that the US citizens will be released only as a prisoner exchange deal, and the release of the funds from South Korea is not related to the hostage deal. However, it is clear that the hostages are being kept in Tehran until the money reaches Iranian bank accounts in Qatar. Currently, the funds are with the Swiss central bank, which is exchanging them into euros gradually and will transfer to Qatar.
Bagheri-Kani confirmed that talks over the hostages were taking place alongside nuclear negotiations in 2021-2022, but the process ended when Russia invaded Ukraine in February 2022 and the delegations left Vienna after almost a year of periodic meetings.
He added that Iran continued pursuing the issue of the blocked funds through intermediaries and the US was resisting. In September 2022, however, “Americans accepted to take steps for releasing the money outside the framework of the nuclear talks, after our persistent follow-ups.”
This coincides with the start of nationwide antiregime protests in Iran immediately after the hijab police fatally wounded Mahsa Amini, a 22-year-old woman in mid-September. Once the protests began, the Biden administrations began voicing support for the Iranian people and their human rights. But if we believe the senior Iranian diplomat, this was the time the US administration agreed to discuss the release of the funds.
In early October, the State Department announced that the US was no longer pursuing the revival of the JCPOA.
“Our focus is not an accord that isn’t moving forward, but what is happening in Iran ... this popular movement and the brutal crackdown of the regime against protesters,” US special envoy Rob Malley said in Paris on October 14.“It’s the sale of armed drones by Iran to Russia ... and the liberation of our hostages…”
Two day later, Malley told CNN that "Right now the talks on revival of JCPOA are not on the US agenda; the focus is on what's happening in Iran as the talks are stalled," adding that “Iran has taken a position in those talks for the past two months, which is simply inconsistent with a return to the deal.” The same message was reiterated several times by Secretary of State Antony Blinken and other top officials.
Iranian protesters and their supporters in the US, Europe and elsewhere took these remarks as indication that the Biden administration had given up dealing with Tehran, while Bagheri-Kani’s remarks indicate behind the scenes talks were taking place for the release of the funds.
Bagheri-Kani said in his interview that the protests in Iran briefly “distracted” the Biden administration, “but they quickly returned to the talks at the end of autumn.”
Critics see the hostage deal as a dangerous step by the US, which will embolden Tehran to detain more Americans given the chance and the money can empower it to undertake anti-West actions.
Moreover, media reports have hinted that the administration has in fact reached a wider, unwritten deal with Tehran, because around $3 billion was also released from Iraq. Supposedly, Iran has agreed to marginally slow down its uranium enrichment in exchange for the funds and a US willingness not to actively enforce existing sanctions.
The Kingdom’s bid to reach parity with Iran, in spite of revived diplomatic relations this year, is driving the Persian Gulf’s oil powerhouse to reach out to China, according to the Wall Street Journal.
Saudi Arabia has asked the US to help it develop a civilian nuclear program as part of a potential deal that would include diplomatic normalization with Israel, which Riyadh doesn’t recognize. Saudi Arabia is also asking the US to provide security guarantees for the kingdom as part of such a deal.
It is causing dilemmas for the United States, which is walking a tightrope in the region, with continuing tensions with Iran and an ever-hungrier Saudi Arabia seeking uranium enrichment on its home soil.
Bypassing the US in favor of China, which earlier this year was a major part of the negotiations to reinstate diplomatic relations between Iran and Saudi, is a firm statement that with or without President Joe Biden’s agreement, Riyadh will do all it can to forge its way into the nuclear domain.
According to Israel’s Haaretz, leading American and Israeli experts are warning the Biden administration not to accept Saudi demands for uranium enrichment as part of a future US-Saudi-Israeli normalization agreement, for fear it will build its own nuclear weapons.
The fears emerged after Israel’s Strategic Affairs Minister Ron Dermer did not rule out Saudi uranium enrichment during an interview with PBS. He argued the Saudis could go to China or France to set up a native nuclear enrichment program, suggesting it would be better to have the US, Israel’s most important ally, involved.
A Saudi-Israel deal, alongside the shadow war with Iran, is atop Israeli Prime Minister Benjamin Netanyahu’s agenda, and many in Israel fear he will reach it at any cost as he approaches the end of his decades-long political career.
Opposition leader Yair Lapid said this week: “It is clear to everyone that if they [Saudi] start enriching uranium in the Middle East, everyone will want to."
Until now, the US has said American nuclear aid is contingent on the Saudis agreeing to not enrich their own uranium or mine their own uranium deposits in the kingdom—non-proliferation conditions not sought by China, which has been seeking to strengthen its influence in the Middle East.
China National Nuclear Corp., a state-owned company known as CNNC, has bid to build a nuclear plant in Saudi Arabia’s Eastern Province, near the border with Qatar and the United Arab Emirates, according to the WSJ, which claims the dealings with China are a pressure tactic on Washington as the two nations drifted further apart since the Biden administration came to power.
Biden promised to make Saudi a ‘pariah state’ after the brutal assassination of US-Saudi journalist Jamal Khashoggi, which has caused years of tension between Biden and Saudi’s de facto ruler, Crown Prince Mohammed Bin Salman.
Crown Prince Mohammed Bin Salman has made obtaining nuclear power a priority. After a decade of discussions, the Saudis are now impatiently pushing to award a contract for the Eastern Province plant, known as Duwaiheen—a two-reactor, 2.8-gigawatt facility—by the end of 2023 and eventually construct 16 reactors at a cost of some $80 billion to $100 billion.
Driven by the desire for parity with Iran in addition to looking towards a time when the kingdom’s main export, oil, is no longer a viable revenue source and nuclear power would offer a viable alternative, time is now ticking. MBS has made no secret of his willingness to develop nuclear weapons if Iran does.
China has already helped Riyadh build its own ballistic missiles and helped the Saudis with a facility for extracting uranium yellowcake from uranium ore, an initial step toward enriching uranium.
There is no doubt that Saudi Crown Prince has his eye on being the region’s political powerhouse, a fact which has more recently created tensions with the UAE’s President and MBS’s initial mentor on his rise to power, Mohammed Bin Zayed.
Close allies of the US such as the UAE and South Korea have accepted stronger restrictions on their nuclear programs and will see US support for enrichment on Saudi soil as a justification to demand the same.
Where the Israeli factor plays into the next stages of the race to nuclear is yet to be seen, the Prime Minister’s office claiming hours after Dermer’s comments that it will not allow any of its neighbors to develop nuclear weapons, but there seems no doubt that Saudi Arabia will get its way, whatever the cost.
The official government news agency IRNA carried a report on the summit headlined by a quote by President Ebrahim Raisi saying, “Iran’s membership in the bloc is opposition to American unilateralism.”
The BRICS group of nations reached a broad consensus to invite six countries - Argentina, Egypt, Iran, Ethiopia, Saudi Arabia and the United Arab Emirates - to join, in a move aimed at increasing the clout of a bloc that has pledged to champion the "Global South".
This is a historic expansion, which reflects the determination of BRICS countries to unite and cooperate with other developing countries, Xi said at the group's leaders' summit in South Africa's Johannesburg.
"This expansion meets the expectations of the international community and serves the common interests of emerging markets and developing countries," Xi added.
Raisi told the summit Iran Iran supports efforts by the BRICS group of emerging economies to move away from dependence on the US dollar.
"The Islamic Republic of Iran very resolutely supports the successful endeavors of BRICS in line with de-dollarization from the trade and economic interactions between the members and also making use of local currencies," he said.
Amid its economic isolation from the West and having few trading partners worldwide, the Islamic Republic views BRICS as a possible savior, with continuous propaganda domestically to present its membership as a critical accomplishment.
However, individual countries make economic decisions based on their interests and they see Iran, which is under US banking sanctions, as a risky proposition. The Islamic Republic has also created a heavily government controlled economic system not conducive to foreign investments.
In his meeting with China’s XI Jinping, Raisi emphasized that the invitation for Iran to join BRICS highlights the bloc’s opposition to the United States, and expressed hope that relations with China will be boosted. Tehran already has a 25-year cooperation agreement with Beijing, with details kept mostly secret, but Iranian officials have often referred to a Chinese pledge to invest $400 million in their country. However, in more than two years after the deal was officially concluded there is little sign of any investments.
IRNA quoted President Xi as having told Raisi that his country hopes to expand bilateral cooperation with Iran “to strengthen multilateralism.”
BRICS - whose acronym was originally coined by an economist at Goldman Sachs, currently comprises Brazil, Russia, India, China and South Africa.
Deepening geopolitical polarization in the wake of Russia's invasion of Ukraine and China's declining relations with the United States are spurring efforts by Beijing and Moscow to forge BRICS into a viable counterweight to the West.
"BRICS has embarked on a new chapter in its effort to build a world that is fair, a world that is just, a world that is also inclusive and prosperous," said South African President Cyril Ramaphosa, who is hosting a summit of BRICS leaders.
Henry Rome, Senior Fellow and Iran analyst at the Washington Institute, commented,“Iran’s invitation to the BRICS group likely will provide little in terms of practical benefits. But, like admission to the SCO, it will probably fuel the conviction among some Iranian leaders that Tehran can escape its isolation absent a nuclear deal.”
Aftab News, a website relatively independent of the current rulers and said to be close to other regime insiders, argued in an article published Thursday, that the outlook for Syria to pay Iran back looks bleak. Iran has a small share of Syria’s trade, roughly one-tenth of what Turkey exports to the country. Annual Iranian exports are less than $1.5 billion.
Both Iran and its ally, the government of Bashar al-Assad in Syria face serious economic challenges. Iran’s finances have steadily deteriorated since 2018 when the United States imposed sanctions after withdrawing from the JCPOA nuclear accord. Syria has remained in political limbo, insecurity, with various military groups roaming in the country and its other ally Russia weakened by its invasion of Ukraine.
United Nations envoy for Syria sounded the alarm to a worsening economic situation on Wednesday. “Prices are now spiraling out of control for essential goods such as food, medicine, fuel, basic commodities. Every part of Syria, every community, is affected,” said Geir O. Pedersen, adding many are struggling to put food on the table and feed their families.
As it usually happens, a man who is broke remembers what others owe him. So, the story goes for the Islamic Republic that aligned itself with Assad in 2011 as antiregime protests flared in the country. The clerical regime seeing its close ties with Assad as essential for its regional plans, supported Damascus with loans, free oil and tens of thousands of Iranian, Afghan, Lebanese, Iraqi and other fighters.
Now, when Iran suffers from a serious economic crisis some people in Tehran realize that they have spent tens of billions of dollars in Syria – a significant part of their restricted oil revenues – for a dubious outcome.
Estimates range from $30 billion to more than $50 billion material aid provided to the Assad regime. Tehran’s oil revenues in this period averaged from below $20 billion to above $40 billion annually. Therefore, it is safe to estimate that from 2011-2022 oil revenues hardly totaled $400 billion. If Iran spent $50 billion in Syria, that would be more than 10 percent of its total income from oil.
The $50 billion figure was revealed in May when an opposition hactivist group accessed government information. Minutes from a meeting of Iran’s Supreme National Security Council showed that Syria’s debt goes back to a long-term agreement signed between the two countries in January 2019, under former president Hassan Rouhani. However, the debt has been building for much longer, with roughly $11bn worth of oil given to Damascus from 2012 to 2021.
A combination of aid in the form of military support and cash, the total amount of debt to Iran is estimated to be about $50 billion, though the document said the final amount is still being calculated.
Aftab News listed an array of potentially profitable industries in Syria that Iran is interested to take under its control as compensation for money the Assad regime owes, but so far there has been no movement toward an agreement. A visit by President Ebrahim Raisi to Damascus in early May did not produce any breakthrough.
Among objects of interest to Iran are Syrian oil fields, new power stations, port facilities and mines. But Aftab News said that these need investments to become profitable, money that Iran does not have.