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Unpacking US-Iran Funds: Truths Behind The "Given" Claims

Tiana Wolf

Table of Contents

Introduction: Unraveling the Financial Web

The question of "how much did the US give Iran" is a recurring and often contentious point in American political discourse and international relations discussions. This seemingly straightforward query, however, masks a deeply complex history of financial transactions, frozen assets, and diplomatic settlements that have spanned decades, often intertwined with critical geopolitical events.

From the landmark nuclear deal of 2015 to more recent hostage exchanges, various figures and narratives have circulated, frequently leading to misunderstandings and strong political accusations. This article aims to cut through the noise, providing a clear, evidence-based examination of the financial flows between the United States and Iran, clarifying what money was involved, why, and under what circumstances. By delving into the specifics, we can better understand the true nature of these transactions and dispel common myths surrounding the notion of the U.S. "giving" money to Iran.

A Look Back: US-Iran Financial Ties Before 1979

To truly understand the financial complexities between the United States and Iran, one must first look back to a time before the 1979 Islamic Revolution. During the 1960s and 1970s, Iran was a key strategic ally of the U.S. in the Middle East, and their relationship included significant military cooperation. In fact, Iran was the largest partner of the U.S. Foreign Military Sales (FMS) program. This partnership involved substantial arms deals and other defense-related procurements.

It was during this period that Iran paid the U.S. for military equipment that was never delivered due to the revolution and the subsequent severing of diplomatic ties. These payments, held in escrow, became the subject of a decades-long legal dispute at the Iran-U.S. Claims Tribunal in The Hague. This historical context is crucial because it forms the basis for some of the most significant financial settlements that would later occur, often misconstrued as the U.S. "giving" money to Iran.

The JCPOA: Unfrozen Assets, Not "Given" Cash

Perhaps no single event has generated more confusion and political rhetoric regarding US-Iran funds than the 2015 Joint Comprehensive Plan of Action (JCPOA), commonly known as the Iran nuclear deal. A persistent claim, notably voiced by some political figures, was that the United States "gave" Iran $150 billion as part of this agreement. For instance, former President Trump stated that the nuclear deal with Iran gave the country $150 billion, including $1.8 billion from the United States in cash. This figure, $150 billion, is indeed the highest estimate that has circulated.

However, this narrative fundamentally misrepresents the nature of the transaction. The United States did not "give" $150 billion to Iran in 2015. Instead, the JCPOA, which was signed by China, France, Germany, Russia, the United Kingdom, the United States, the European Union, and Iran, was a landmark nuclear agreement designed to prevent Iran from developing nuclear weapons in exchange for sanctions relief. The deal lifted some international sanctions, which in turn unfroze Iranian assets that were held largely in foreign, not U.S., banks. To be abundantly clear, the money that was unfrozen belonged to Iran; it was not U.S. taxpayer money being handed over.

While the JCPOA did infuse Iran with cash by allowing it access to its own previously restricted funds, the total amount of Iranian assets frozen globally was estimated to be around $100 billion to $120 billion. Of this, a significant portion was already allocated to specific projects or debts. Jacob Lew, who served as Treasury Secretary at the time, testified before Congress that the actual amount Iran would be able to use was about $50 billion. This figure stands in stark contrast to the $150 billion widely cited. Furthermore, right before the United States reimposed sanctions in 2018, Iran’s central bank controlled more than $120 billion in foreign exchange reserves, much of which was held in accounts abroad and subject to various restrictions. It’s also worth noting that in 2014, as part of an interim nuclear deal that preceded the JCPOA, Iran repatriated $4.2 billion from its overseas revenues, another instance of Iran gaining access to its own funds.

The $1.7 Billion Settlement: A Decades-Old Debt

Another significant financial transaction that often gets conflated with the idea of the U.S. "giving" money to Iran is the $1.7 billion settlement. This payment, made in 2016, specifically after the implementation of the Iran deal, has been a source of considerable controversy, with some claiming it was a "ransom payment for hostages." However, the facts reveal a different story.

This $1.7 billion was not a new payment but rather the settlement of a long-standing financial dispute stemming from the 1979 Iranian Revolution. The funds had been contested since that time, relating to the aforementioned military equipment order from the 1970s. The day after the nuclear deal was implemented, the U.S. and Iran announced they had settled the claim over this 1970s military equipment order. The U.S. agreed to pay the $400 million principal along with about $1.3 billion in interest. This $400 million was money Iran had paid into a U.S. Defense Department trust fund for military equipment that was never delivered.

President Obama approved the $400 million transfer, which he announced in January 2016, as the first payment of this larger $1.7 billion settlement. In each case, the United States reached financial settlements with Iran related to disputes originating with the 1979 Islamic Revolution, which were directly or indirectly connected with the release of Americans held hostage in Iran or Lebanon. While the timing of the payment coincided with the release of American prisoners, U.S. officials maintained it was a legitimate settlement of a legal claim, not a ransom for new hostages. This distinction is crucial: it was a resolution of a historical debt, not a payment for the freedom of individuals newly detained.

Why Cash Payments? The Reality of Sanctions

A particular aspect of the $1.7 billion settlement that drew considerable scrutiny was the use of physical cash for the transfer. Critics often highlighted this as suspicious or unusual. However, the explanation provided by U.S. officials points directly to the very sanctions regime the U.S. itself had put in place against Iran.

Treasury Department spokeswoman Dawn Selak stated that the cash payments were necessary because of the "effectiveness of U.S. and international sanctions," which had largely isolated Iran from the international finance system. White House press secretary Josh Earnest further elaborated on August 22, 2016, explaining, “the reason that paper currency was used to make the transfer is because there’s no banking relationship between the United States and Iran. So it’s because of our commitment to ensuring the isolation of Iran that the transaction was carried out in this way.”

In essence, the very success of U.S. sanctions in cutting Iran off from global banking channels meant that traditional wire transfers were not feasible. To settle the legitimate legal claim, the only practical method was to use physical currency. This highlights the paradox of sanctions: while designed to isolate, they can also complicate standard financial transactions, necessitating alternative, less conventional methods of payment even for legitimate settlements.

The Trump Era: Sanctions, Waivers, and Oil

The financial landscape between the U.S. and Iran shifted dramatically in 2018 when the Trump administration pulled the U.S. out of the Iran nuclear deal and reinstated a wide array of sanctions. This "maximum pressure" campaign aimed to cripple Iran's economy and force it back to the negotiating table for a more comprehensive agreement.

Despite the comprehensive nature of these sanctions, even the Trump administration found it necessary to issue waivers in certain circumstances. For example, a waiver was issued that allowed Iraq to continue purchasing electricity from Iran, with the understanding that the payments would be held in an Iraqi bank and could only be used by Iran for humanitarian or non-sanctionable goods. This illustrates the complex reality of sanctions: while intended to be stringent, they often require carve-outs to prevent humanitarian crises or maintain regional stability.

The impact of these sanctions on Iran's economy was significant, particularly on its oil exports, which are a primary source of revenue. Under the Trump administration's heightened sanctions, Iran's average oil exports dropped considerably. However, in recent years, under the Biden administration, there has been a notable increase. Iran exported nearly 1.4 million barrels of oil per day in October 2023, sustaining its average for the year. This is up 80% from the 775,000 barrels per day Iran averaged under the Trump administration, indicating a partial recovery in its oil sector despite ongoing sanctions.

The $6 Billion Hostage Deal: A Recent Controversy

In September 2023, another significant financial transaction involving Iran became a focal point of debate: the release of $6 billion in previously frozen Iranian assets in exchange for the release of five American citizens held in Iran. This deal, facilitated by the Biden administration, saw the $6 billion transferred out of South Korea, where it had been held due to sanctions, and moved to Qatar, a Middle East nation that sits across the Persian Gulf from Iran.

In return for the unfrozen funds, five Iranians held in the United States were also allowed to leave. The Biden administration has defended this $6 billion deal by emphasizing that, similar to the JCPOA funds, this was Iran's own money, not U.S. taxpayer dollars. Furthermore, strict conditions were placed on its use: the funds were designated for humanitarian purposes only, such as food, medicine, and agricultural products, and would be held in a restricted account in Qatar, requiring U.S. oversight for disbursements.

Despite these assurances, the deal immediately drew sharp criticism, particularly from Republicans, who sought to link the $6 billion in unfrozen Iranian funds to the weekend attacks on Israeli civilians that occurred shortly after the deal. The claim, "Why did Joe Biden just give 10 billion dollars to Iran," as seen in a December 2024 tweet by Curtis Richard Hannay, exemplifies the conflation and exaggeration often associated with these financial discussions. It's important to clarify that the figure widely discussed was $6 billion, not $10 billion, and it was Iran's money, not a "gift" from the U.S.

The controversy intensified after the Hamas attacks on Israel in October 2023, leading the U.S. to re-freeze access to these funds. This incident highlights the volatile nature of U.S.-Iran financial dealings and how quickly they can become entangled in broader geopolitical crises. It also sets up a potential decision point for a future administration; with Trump’s return to the presidency imminent, his incoming administration will face the decision of whether to allow Iran continued access to these funds, should conditions change.

It's also relevant to note that while this deal involved an exchange of prisoners and funds, there have been instances where hostages were freed during the Trump administration without the release of any Iranian funds, demonstrating that such exchanges are not universally tied to financial transactions.

Iran, Israel, and the Funds: Unpacking the Links

The recent attacks in Israel and the subsequent conflict in Gaza have inevitably drawn attention back to Iran's role in the region and, by extension, the funds it possesses. As mentioned, the $6 billion unfrozen for humanitarian purposes quickly became a political football, with critics attempting to draw a direct line between these funds and the attacks. However, the United States has not publicly linked Iran to the attacks in Israel in terms of direct operational involvement or funding for the specific Hamas assault.

While reports from outlets like the BBC ("Did Iran support plan for attack on Israel?") and The Wall Street Journal ("Iran helped plot attack on Israel over several weeks") have explored potential Iranian involvement in planning or encouraging the attacks, U.S. officials have maintained that there is no direct evidence that Iran directed or knew the precise timing of the Hamas operation. Furthermore, the $6 billion in question was always held in a restricted account and designated for humanitarian purposes, making it difficult for it to be diverted to military or terrorist activities, even if Iran desired to do so. The funds were re-frozen shortly after the attacks, further ensuring they could not be accessed.

It is crucial to distinguish between Iran's general support for proxy groups in the region and the direct use of specific, monitored funds for illicit activities. Iran's nuclear program remains at the heart of its conflict with Israel and the broader international community, and its financial resources, whether from oil exports or unfrozen assets, undoubtedly play a role in its regional influence. However, the narrative that the U.S. "gave" Iran money that was then used to fund attacks is a significant oversimplification and misrepresentation of the complex financial and political realities.

Conclusion: Navigating a Nuanced Narrative

The question of "how much did the US give Iran" is far more nuanced than political soundbites often

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