Iran and the $29 Billion That Will Be Released Immediately After Sanctions Are Lifted

While various figures ranging from $20 billion to $180 billion have been mentioned regarding Iran's blocked assets abroad since the announcement of the nuclear agreement between Iran and world powers, recent reports indicate that the definitive amount of resources Iran can access immediately after sanctions are lifted is $29 billion. One such report was published by the World Bank, estimating the total blocked assets of Iran abroad at $107 billion, stating that $29 billion of this amount will be released immediately for Iran's use. The economic magazine Forbes also republished an article from an academic publication called 'The Conversation,' confirming that the amount of money Iran can obtain immediately after sanctions are lifted is indeed $29 billion. This research article estimates the total blocked assets of Iran at over $101 billion. The $29 billion figure is close to the amount that Valiollah Seif first mentioned a few days after the nuclear agreement as the amount of money that would be available to Iran. Since the nuclear agreement, various figures regarding Iran's blocked assets have been announced, including two different figures mentioned by former U.S. President Barack Obama regarding the released assets of Iran. In Iran, various officials have also announced significantly different figures regarding the amount of Iran's assets to date. A clear point is that Iran's blocked assets constitute various financial resources. Part of these resources relates to Iran's blocked accounts in European countries and the U.S. before the intensification of sanctions, while another part pertains to oil revenues after the U.S. sanctions on oil sales and the central bank over the past four years. Fereydoun Khavand, an economist in Paris, points out that there is a difference between the foreign exchange reserves of the central bank and the foreign assets of the government: 'The problem is that everyone is not talking about the same issue. For example, there is a fundamental difference between the foreign assets of the government and the foreign exchange reserves of the central bank. When Iran sells oil abroad, the buyer deposits the money for this commodity into a dollar account abroad. The money in this account belongs to the government. To cover its expenses, the government sells all or part of these oil dollars to the central bank in exchange for rials. From then on, the dollars that the government sold become the foreign exchange reserves of the central bank. The central bank can sell these dollars to the people or merchants in exchange for rials or can keep the dollars as foreign exchange reserves. When the central bank governor says that Iran's blocked foreign assets abroad are $29 billion, he means that part of the foreign assets that belong to the government.' In the article published in Forbes, referencing statements from the Iranian central bank's currency deputy, Iran's financial assets abroad are estimated at $89.6 billion. These assets relate to investments in the Niko company affiliated with the Ministry of Oil and also collateral held by Chinese companies to secure credit lines to Iran. These are part of the assets whose access remains ambiguous. Hassan Mansour discusses the ambiguities surrounding this portion of Iran's assets, stating that the problem lies in the fundamental nature of these transfers: 'When it is said that $35 billion has been invested in the Niko company of the Ministry of Oil, it is unclear what has happened to this money. Where is it? Has it been spent on projects? Has it been consumed, or does it exist as cash? Or is it with this company for future investments? Or when it is said that $22 billion in China, which Mr. Mohajeri corrected to $25 billion, is collateral for the Chinese financing, what does that mean? Does it mean that the Chinese are holding this money in exchange for financing Iranian projects, or has it been consumed? If it has been consumed, where has it been spent? Thus, with each passing day, instead of clarifying ambiguities, more uncertainties are added.' The World Bank warns in its report that even the improper use of the $29 billion resources that will be immediately available to Iran could have detrimental effects on Iran's economy. This reputable international institution considers the proper management of these assets necessary for economic development and emphasizes that the Iranian government should avoid spending the money obtained from the lifting of sanctions on consumption.