Expert explains why better for US to unfreeze Iran's assets than lift imposed sanctions

Expert explains why better for US to unfreeze Iran's assets than lift imposed sanctions

Azerbaijan, Baku, Oct. 23 / Trend, S. Isayev

The idea behind unfreezing Iran's assets is that in return for concessions that Iran offers in its meetings with the 5+1 countries, the United States has to offer something, professor of economics at U.S. Northeastern University, Kamran Dadkhah told Trend.

He was commenting on recent news on US officials having an idea to offer Iran access to at least some of its frozen money in exchange for verifiable concessions on nuclear program.

"The proposal being considered by the United States government is to allow Iran access to some of the money it has earned by exporting oil to different countries, which at present can only be used to buy non-sanctioned goods locally," he said.

"Lifting sanctions is problematic because a few days down the road negotiations may stall and re-imposing sanctions would be difficult," Dadkhah explained.

He went on to note that the U.S. government considers the gradual unfreezing as a spigot that can be turned on and off depending on Iran's behavior without changing the sanctions.

The U.S. and its Western allies suspect Iran of developing a nuclear weapon - something that Iran denies. The Islamic Republic has on numerous occasions stated that it does not seek to develop nuclear weapons, using nuclear energy for medical researches instead.

According to Bloomberg, more than $50 billion of Iranian money is frozen, or semi-frozen, in banks around the world.

Dadkhah went on to note that there is no question that such a move with unfreezing will help Iran and the Iranian government would be willing to use it.

"The fact is that the Iranian economy is a miserable state; it is suffering from high inflation (particularly, food prices), high unemployment, and low and even negative growth rate," he said. "Being able to use this fund could alleviate some short term problems."

Nevertheless, such an option, especially if it is formally offered and publicized, would cause political problems for the Iranian government, Dadkhah said.

"The critics would say that such a concession on the part of the United States is too small to warrant any quid pro quo. After all, the money belongs to Iran and sanctions, unfairly in their opinion, have deprived the country from using its own money," he said.

"Thus, lifting such an unfair restriction and the fact that the amount may not be substantial cannot justify Iran's move to accommodate Western demands," he said.

Dadkhah went on to say that the move could be useful to both sides if it is done as a part of a larger agreement and without emphasizing particular features of this option.

"Iran could buy time to tackle its basic economic problems," he said.

Speaking of technical details of how Iran would be able to get its money, Dadkhah said that part of the restrictions the United States and the UN have imposed on Iran, restrict the country in converting its oil revenues to dollar and transferring money internationally.

"In addition, some countries trading with Iran including India and China have used the sanctions as a pretext to restrict Iran's access to the oil proceedings," he added. "They have asked Iran to keep its money in those countries and to buy certain local goods."

"If the proposal being considered by the US administration goes through, then those restrictions are eased," he said. "Sanctions stay in place but Iran can get its oil revenue in dollars and spend it more freely."

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