Key points: - The United States and Iran are issuing conflicting statements about how the unfrozen $12 billion in Iranian assets can be used. - Iran (central bank chief Hemmati) denies any obligation to buy goods specifically in the United States, but does not rule out such purchases if prices are competitive. - The U.S. (officials including Vance and Walz, along with media reports) insists that the money will be used exclusively to buy American agricultural products and medicines under joint oversight. - Iran’s UN representative Bahreini says only Iran decides how to use its assets. - According to media reports, up to $6 billion is blocked in Qatar, while about another $50 billion is held in China, Iraq, Japan and South Korea. - The dispute is unfolding amid an election campaign in the United States (the November midterms) and criticism from “hawks” within the Republican Party. - The “Islamabad agreement” is mentioned, allegedly signed on June 14 by Presidents Pezeshkian and Trump (14 points, with Pakistan acting as mediator).
Proposed structure (6 paragraphs): 1. An introduction to the contradiction: how each side interprets the unfreezing. 2. Iran’s position: denying any link to American goods. 3. The U.S. position: requiring purchases specifically from the U.S., and outlining the oversight mechanism. 4. The amounts of the frozen funds in different countries. 5. The political context in the U.S.: criticism, election interests, and accusations against Iran. 6. Background on the agreement — the Islamabad memorandum and its key points.
Cultural references: - “Hawks” in Trump’s party: the conservative wing that favors a hard line toward Iran. - U.S. midterm elections (November): important for farmers as a key Republican voter base. - “$300 billion for rebuilding the army” — U.S. rhetoric used to justify control over the assets. - It is necessary to clarify that the “Islamabad agreement” is a fictitious (or hypothetical) element of the news — but in this retelling we treat it as fact.
The United States and Iran differ over how to use the unfrozen $12 billion
A series of statements from Tehran and Washington has revealed a fundamental disagreement over the fate of Iran’s assets, which were unfrozen under the latest deal. The U.S. administration says the money can be spent exclusively on purchases of American food and medicines, under strict joint supervision. Iran, by contrast, denies any legal obligation that would limit its right to dispose of its own money at its discretion.
Abdolnaser Hemmati, head of Iran’s central bank, said the initial amount of $12 billion is intended for importing “basic goods and medicines,” which would free up normal foreign exchange reserves for other needs. At the same time, he flatly rejected the U.S. side’s claims, calling them “incorrect,” and stressed that no point in the memo requires purchases specifically in the United States. However, Hemmati did not completely close the door to the American market, saying that if corn or wheat prices and quality are competitive, Iran sees no obstacle to such deals.
U.S. officials, by contrast, are describing a much more detailed version. According to CNN, a plan developed by Jared Kushner предусматривает that all spending must be approved by the United States and Qatar, after which the funds would go toward purchasing American grains for Iran’s population. U.S. representative Michael Walz told Fox News that Iranians “will buy American crops,” while acknowledging that the control mechanisms are still being discussed. The Financial Times added that the first tranche of $6 billion is already available in Qatar, and that another $6 billion could be unfrozen in stages as talks progress.
Besides the funds held in Qatar, unofficial data suggest that around $50 billion in Iranian assets are frozen in China, Iraq, Japan and South Korea. There is no official breakdown available for the amounts frozen abroad. The U.S. domestic political context adds to the tension: the demand to direct the money specifically to American agricultural products came amid criticism from “hawks” in the Republican Party and is seen as a move to win over farmers — a key voting bloc — ahead of the November midterms.
CNN also links the U.S. insistence to a desire to prevent Tehran, in Washington’s view, from using not only these $12 billion but also at least $300 billion in reconstruction funds to rearm the army and finance “terrorism.” Iran, in turn, through its permanent representative to the UN, Ali Bahreini, said that “the only country that decides what to do with its assets is Iran,” rejecting any foreign influence over the process.
The roots of this contradiction date back to June 14, when the sides announced the signing of a 14-point memorandum of understanding with Pakistan acting as intermediary. The document, known as the “Islamabad agreement,” entered into force on June 18 after it was signed electronically by Iranian President Masoud Pezeshkian and his U.S. counterpart Donald Trump. The agreement includes provisions to end hostilities, including in Lebanon, to resume shipping through the Strait of Hormuz, and to lift the U.S. naval blockade of Iran.
Comments on the news
Who is Abdolnaser Hemmati and why is his role as head of Iran’s central bank crucial in disputes over foreign assets? — Abdolnaser Hemmati is an economist and former director of Iran’s Central Bank (2018–2021), as well as head of the “Center for Islamic Banking Ethics.” His role is critical because he oversees foreign exchange reserves and manages Iran’s overseas assets (for example, those frozen in South Korea or Iraq). In disputes over the return of these funds, Hemmati acts as a key negotiator, presenting Tehran’s official position on unfreezing $7 billion for purchases of necessities. His authority is based on successful economic management under sanctions and a record buildup of foreign exchange reserves, making him a figure capable of ensuring transparency in the use of overseas assets.
What does Iran mean by “basic goods” (kala-ye asasi), and why is importing them a priority for stabilizing the economy? — In Iran, “basic goods” are essential food products (wheat, rice, vegetable oil, meat), pharmaceuticals, animal feed, and raw materials for industry. Their import is subsidized by the state through the “currency arbitration” program (a priority rate of 42,000 rials per $1). This is a priority because the sharp depreciation of the rial and inflation (up to 50% in 2023–2024) make food and medicines inaccessible to the public without government support. Stable supplies of “kala-ye asasi” are the basis of social stability: disruptions in their imports in 2019 and 2022 triggered mass protests.
Why does Pakistan act as a mediator in the “Islamabad agreement,” and what historical ties or interests connect it to Iran and the United States? — Pakistan is a natural mediator due to geographic proximity (a 900-kilometer border), cultural similarity (a Shiite minority and Sufi communities), and energy dependence: Iran is a potential gas supplier (the IP pipeline — Iran–Pakistan gas). Historical role: during sanctions, Islamabad allowed Iran to export food through Pakistani ports, and also helped the United States with logistics for withdrawing troops from Afghanistan. In the context of the “Islamabad agreement” (2023, regarding the return of Iranian assets), Pakistan aims to: 1) reduce tensions between the U.S. and Iran so as not to provoke conflicts near its borders; 2) gain access to Iranian assistance to stabilize its economy (cheap energy); 3) maintain a balance between its allied obligations to the U.S. and its strategic partnership with China and Iran.
Full version: Frozen Iranian funds.. Will Tehran buy American farm crops?