US, Iran Frozen Assets Dispute Clouds Peace Deal As Talks Enter Critical Phase

Iran and the United States have agreed to strike a deal after three months of war. While both sides have welcomed a 60-day period to extend the April 8 ceasefire to work out the framework of the peace deal, the release of Iranian frozen assets remains a key sticking point between the two nations.  

Pakistan’s Prime Minister Shehbaz Sharif, whose country mediated the deal, announced it on Sunday evening. He said that both sides had declared "the immediate and permanent termination of military operations on all fronts, including in Lebanon", although Israeli politicians criticised the deal. 

Trump announced the immediate removal of the US naval blockade of Iranian ports and the reopening of the Strait of Hormuz after the initial agreement is signed on Friday in Switzerland.  

Kazem Gharibabadi, Iran's Deputy Foreign Minister, also confirmed the end of military operations in a phone call on Iranian state TV, claiming that Iran achieved major victories in the war.  

Key past sticking points have included Iran's nuclear enrichment and Western insistence that the country not possess a nuclear weapon, and Iran's desire for comprehensive sanctions relief and access to tens of billions of dollars in frozen oil revenues. 

Question of the Frozen Assets  

Iran's semi-official news agency Mehr detailed a 14-point "memorandum of understanding" between the US and Iran, It reported that before the start of the negotiations, $12 billion in frozen assets would be released by Washington to Tehran. 

The agency stated that according to the memorandum the remaining of the frozen assets, which amount to nearly $24 billion in total, will be released during the negotiation period. 

Just ahead of the official announcement, a senior Iranian official disclosed that the U.S. had agreed to unfreeze $24 billion in Iranian assets as part of the draft agreement. 

Additionally, the impending agreement is anticipated to feature the phased removal of sanctions and the return of frozen Iranian assets, three regional officials informed the Associated Press. However, because the official text of the U.S.-Iran deal remains under wraps, the exact figures were not specified.  

In contrast to Tehran's assertions, Axios reported that U.S. officials familiar with the issue have dismissed the Iranian claim as false. Stating that Washington has not consented to releasing $12 billion in frozen assets, an official informed Axios, "This is completely not true. This is a pay-for-performance deal, and no frozen funds will be released without the Iranians implementing their commitments.” 

This stance aligns with previous statements from the Trump administration, which emphasized that any release of Iranian funds is strictly conditional upon Tehran fulfilling specific obligations under the pact.  

Consequently, the U.S. appears to be standing firm on its demand for Iran to halt its nuclear and uranium enrichment program.  

Meanwhile, Iran's Deputy Foreign Minister Kazem Gharibabadi stated that Tehran's commitments under the peace deal are set to take effect this Friday, noting that the subsequent phase of talks will center on lifting the long-standing sanctions that have damaged Iran's economy. However, the Iranian official added that Tehran will only enter this next phase of negotiations after its assets are unfrozen, the U.S. naval blockade is lifted, and a formal end to the war in West Asia is officially declared.

The Nuclear Question 

Iran surrendering its nuclear programme and enriched uranium is one of the key goals of the US (and Israel). It was also the very reason why the war started in the first place as US and Israel launched a “pre-emptive strike” on Iran, alleging that it "possessed a nuclear weapon". 

Washington has called Iran’s nuclear programme a “red line” on several occasions, with US President Donald Trump stating that a deal will only come if Iran agrees to halt it. 

In a Sunday interview with the New York Times, Trump revealed that negotiators are still debating a potential 20-year suspension of Iran's enrichment activities. He noted that he "might settle" for a 15-year freeze, but declined to provide additional details, stating he preferred not to "negotiate via the media." 

Tehran has not publicly commented upon the matter. While the abandoning of its enriched uranium still remains under question, Iran has declared on multiple occasions that it has no intention of either developing or acquiring a nuclear weapon. Meanwhile, Rafael Mariano Grossi, Director General of the International Atomic Energy Agency (IAEA) which is the United Nations' nuclear watchdog, has also previously said that there has been no evidence of Iran building or possessing a nuclear bomb.

The stipulated 60-day negotiation period for the peace deal would also include discussions on the Iranian nuclear programme. 

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