Photo: Reuters
Iran's Supreme Leader
Photo: Reuters
Iran gains access to 5% of global assets under Geneva accord
US official says nuclear agreement between world powers and Iran will free up $4.2 billion out of $100 billion in foreign exchange assets around the world, but warns businesses not to rush to deal with still-sanctioned country
Iran has about $100 billion in foreign exchange assets around the world, of which it will be able to access $4.2 billion under last year's nuclear agreement with six world powers, a senior US administration official said on Friday.



The official, who spoke on condition of anonymity, said the money and assets were held in various countries and that a significant proportion was Iran's oil revenue. Financial and other sanctions have meant Tehran has not had free access to spend it.


The governor of Iran's central bank said in mid-2012 it had built up $150 billion in foreign reserves to protect itself against tightening punitive measures on the country.


Under the six-month accord signed in November between Iran and the major powers, Tehran will receive limited sanctions relief, which the US estimates to be worth about $7 billion, in return for curbing its disputed nuclear program.


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Of this amount, $4.2 billion is in the form of access to currently blocked Iranian revenue held abroad.


The US official said Iran would identify from where it wants to take the funds and that Western authorities would facilitate their transfer in a series of installments during the next half year, depending on the Islamic Republic carrying out its part of the deal.


The White House also referred to the $100 billion figure in a summary it released on Thursday of the nuclear agreement between Iran and the United States, Russia, China, France, Britain and Germany.


The value of the sanctions relief was a "small fraction" of this amount of Iranian foreign exchange holdings that will continue to be blocked or restricted, it said.


The interim accord – meant to buy time for negotiations on a final settlement of the decade-old nuclear dispute – also pauses Western efforts to cut further Iran's oil exports, which Washington says have plunged by around 60 percent to 1 million barrels per day since early 2012.


The US official made clear that the volume would not increase if the oil price were to fall during the six-month agreement, the implementation of which is due to start on Monday.


Japan, South Korea, China, India, Taiwan, and Turkey are still importing Iranian oil, and the official said that if another country started purchasing crude from Tehran it would likely violate US law.


US warns firms against business with Iran

The administration official also underlined the US view that businesses should not rush to return to Iran, saying the sanctions relief under the Geneva agreement was both limited and reversible.


European companies are sizing up the potential of an end to the economic isolation of Iran, attracted by an urgent need to overhaul its creaking infrastructure, a young population of 76 million and major oil and gas reserves.


Reuters reported this week that Belgian chemical firm Tessenderlo will ship fertilizer to Iran within weeks as the easing of Western financial sanctions has helped Tehran complete its first potash tender purchase in two years.


Sanctions imposed by the United States and its allies over Iran's controversial nuclear program did not ban the supplying of fertilizer to the country.


But measures that have isolated Tehran from most of the global banking system have significantly limited its trading, shipping and payments over the past two years.


The administration official said it would not be good business to begin re-engaging with Iran now, because sanctions still made it very difficult to carry out transactions with the country and receive or make payments.


Iran rejects Western allegations that it has been seeking to develop the capability to make nuclear bombs.


But last year's election of a relative moderate, Hassan Rohani, as Iranian president paved the way for a diplomatic thaw with the West, which led to the Geneva accord.


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