May. 10, 2024 at 4:44 pm

Posts Misrepresent Unfreezing of $16 Billion in Iranian Funds

May 10, 2024no commentNo tags

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Quick Take

A recent deal involving a prisoner swap and the extension of a Trump-era waiver have freed $16 billion in previously frozen Iranian funds. Social media posts distort the sources of the money to falsely claim “Joe Biden gave 16 billion to Iran.” The Iranian money has been unfrozen with restrictions that it be used for humanitarian purposes.

Full Story

Two separate agreements in the fall allowed Iran to access up to $16 billion of its previously frozen assets, including a reported $10 billion as the result of an extension of a Trump-era waiver that allows Iran to access funds for humanitarian purposes.

Posts on social media have misrepresented those agreements, claiming, “Joe Biden gave 16 billion to Iran.” One early version of the claim, which spread widely on X, the platform formerly known as Twitter, showed a picture of President Joe Biden with this text: “Anyone remember when this guy handed $16,000,000,000 to Iran last year?” It came from an account that describes itself as “Conservative populist.” When the post went viral, the account added a marketing link to a survivalist goods company.

“This use of the word ‘gave’ is certainly intended to mislead,” Heather Williams, a senior policy researcher at RAND who specializes in Middle East regional issues, told us in an email. “[P]eople often try to portray this issue in a way that gives the impression that America is giving funds to Iran.”

The agreements don’t provide any U.S. money to Iran, as the posts suggest. Rather, they allow Iran to access its own assets that had been frozen in foreign banks due to earlier sanctions. The money can only be used for humanitarian purposes.

It’s also not clear how much of the $16 billion – which is held in accounts in Qatar and Oman – has been spent. As of December, U.S. officials said no Iranian money held in Qatar had been spent, but there were two transactions from the funds in Oman. The amounts of the transactions have not been disclosed.

Williams said she isn’t as familiar with the details of the money held in Oman. But as for Qatar, “There is no clear evidence Iran has used any of this money,” she said — although there are still questions about how Qatar plans to enforce the restrictions on the money, and Iran has claimed to have access to the money.

Here’s the deal with each of the two agreements.

$6 Billion in Foreign Banks

In September, the U.S. and Iran exchanged prisoners in a deal that also included the unfreezing of $6 billion in Iranian assets.

Five Americans were released from Iranian jails and returned to the U.S., and five Iranians who had either been charged or convicted in the U.S. received clemency. The other part of the deal freed up $6 billion in previously frozen Iranian assets.

As we’ve explained before, none of it was U.S. money. It was Iranian money that had been held in South Korean banks.

The money was from South Korea’s purchases of Iranian energy products. It was held in the bank accounts after then-President Donald Trump announced the withdrawal of the U.S. from the Joint Comprehensive Plan of Action, better known as the Iran nuclear deal, in May 2018. Months later, the administration reinstated sanctions on Iran that were lifted after Iran agreed to the nuclear deal, which was negotiated by the U.S., China, France, Germany, Russia, the United Kingdom and the European Union. Those sanctions included a partial ban on oil exports, and the next year, the Trump administration made it a total ban. The sanctions were also aimed at stopping “transactions by foreign financial institutions with the Central Bank of Iran.”

In October 2019, the Trump administration made the money in those accounts available to Iran for limited humanitarian purposes, although the banks didn’t use that accommodation much due to the increased reporting it required.

As the Washington Institute for Near East Policy explained, “participants and observers complained that the ‘enhanced due diligence’ requirements were too much of a burden.”

So, even though there were mechanisms to disperse Iranian assets, “the South Koreans weren’t interested,” Patrick Clawson, director of research at the Washington Institute, told us last year. “From the beginning, South Korean banks were reluctant to use it because they feared the U.S. could change its mind and come back and fine them.”

The prisoner swap deal in September moved that money from South Korea to Qatar, although it is available only for humanitarian purposes. John Kirby, spokesman for the National Security Council, said in October that Iran hadn’t accessed any of the money.

Abram Paley, the State Department deputy special envoy for Iran, said the same thing in December during a House Financial Services Committee hearing.

“Not a penny of this money has been spent and these funds will not go anywhere anytime soon,” Paley said, although he didn’t explain what mechanism was keeping the funds static.

After the Hamas attack on Israel on Oct. 7, Deputy Treasury Secretary Wally Adeyemo reportedly told House Democrats in a closed-door meeting in October that the U.S. and Qatar had reached an agreement to prevent Iran from accessing the $6 billion that had been unfrozen as part of the prisoner swap, according to ABC News.

The Biden administration was under pressure to act because of Iran’s support for Hamas. “The Iranian government has backed Hamas for decades, going back nearly to the group’s inception in the 1980s,” according to a Congressional Research Service report on the history of U.S. policy toward Iran.

The CRS report, which was last updated on April 22, cited the same news reports and noted that the apparent agreement was “for an unspecified period of time.”

We reached out to the State Department for more information but didn’t get a response.

At the same December House hearing, Elizabeth Rosenberg, the assistant secretary for terrorist financing and financial crimes at the Treasury Department, also confirmed that no money had left those accounts. “There have been no transfers out of this, from the $6 billion sum held in Qatari financial institutions,” she said.

$10 Billion in Energy Sales to Iraq

In 2018, after Trump pulled the U.S. out of the Iran nuclear deal and reinstated sanctions, his administration issued a waiver that allowed Iraq to continue purchasing electricity from Iran, with restrictions that Iran only use the proceeds for humanitarian purposes.

That waiver has been consistently renewed, typically in 120-day increments.

On Nov. 14, Secretary of State Antony Blinken signed another waiver, “the twenty-first such waiver across multiple administrations,” Paley, the State Department’s deputy special envoy, said at the hearing. That waiver expired in March and was, again, renewed.

News stories noted the estimated reserve of money that had built up from the sale of energy from Iran to Iraq was about $10 billion.

The decision to extend the waiver was criticized by some conservative politicians, who highlighted the $10 billion figure, including Sen. Tim Scott of South Carolina and Sen. Thom Tillis of North Carolina. And that number has now found its way to social media posts.

It’s unclear exactly how much has accrued from the sale of Iranian energy to Iraq, though. It’s also unclear how much has been accessed by Iran, which, as we said, can use the money only to fund humanitarian purchases.

The $10 billion figure — which has been referenced by many U.S. officials over the last several months — appears to have come up over the summer, in an Iranian media report.

When the previous waiver was renewed in July, the State Department allowed for money to be held in bank accounts outside of Iraq to prevent Iran from pressuring Iraq to give it access to the funds. That money is now largely held in Oman. As of December, there had been two transactions from those accounts, according to Rosenberg, who declined to give details about them during the House hearing.

Also in July, the Persian-language broadcaster Iran International reported that the chairman of the Iran-Iraq chamber of commerce had estimated the amount of money in the Iraqi accounts for Iran was $10 billion, which is the earliest reference we could find to that amount.

A month earlier, in June, the U.S. had reportedly approved a payment of $2.7 billion from restricted funds held for Iran in Iraq.

Neither the State Department nor the White House responded to our requests for more details.

When the waiver was reissued in November, State Department spokesman Matthew Miller explained that the money “is held in accounts that are restricted where they can only be used to pay for food, medicine, humanitarian purposes, and other non-sanctionable activities.”

Referring to Iraq, Miller said, “We’ve had a number of policies we’ve worked with to try to ensure their energy independence, but in the meantime, they continue to buy Iranian electricity. And so we have in the past, as has the Trump administration, issued waivers to allow these funds to move to restricted accounts, or as I said, that can be used for humanitarian and other non-sanctionable purposes.”

And, more recently, Kirby, the NSC spokesman, answered a reporter’s question in April about the unfreezing of Iranian assets, saying, “none of those funds — funds set up in an account, by the way, by the previous administration — goes directly to the Supreme Leader of the [Islamic Revolutionary Guard Corps]. It can only be used for humanitarian purposes. And we’re watching that account very, very closely to make sure that that’s what happens.”

So, saying only that “Joe Biden gave 16 billion to Iran” leaves the false impression that the administration has provided new, unrestricted money to Iran. That money already belonged to Iran, and its use is restricted. It’s also unclear how much of it Iran has actually accessed.

Editor’s note: FactCheck.org is one of several organizations working with Facebook to debunk misinformation shared on social media. Our previous stories can be found here. Facebook has no control over our editorial content.