US, Qatar discuss mechanism for frozen Iranian funds

Qatar mechanism for humanitarian funds

The United States and Qatar are discussing a mechanism that could make billions of dollars in frozen Iranian assets available for humanitarian spending under the recently signed Islamabad Memorandum of Understanding, according to The Wall Street Journal on Saturday. The plan, which requires Iran's approval, would initially grant access to $6 billion held in Qatar.

Under the proposed arrangement, Qatar would permit purchases of food, medicine and other humanitarian goods ordered by Iran's central bank using money drawn from the frozen assets, the report said. The mechanism could serve as a model for handling other pools of Iranian funds frozen in countries including China, India, Iraq and Qatar.

Economic incentives for Tehran

Iran is seeking the release of part of an estimated $24 billion in blocked assets as soon as possible, according to the report. "Even limited asset releases function as both economic lifelines and political signals of de-escalation," Sanam Vakil, Middle East director at Chatham House, told the newspaper.

She said such measures are among the few concrete incentives available to help Iran stabilize its currency and ease domestic economic pressure. The arrangement would be separate from revenue Iran is expected to earn from oil sales, which Washington agreed to allow following the signing of the agreement.

Islamabad agreement context

Under the agreement signed earlier this week, the US committed to making Iran's frozen assets "fully available for use" as long as Tehran engages productively in ongoing talks, the report said, citing a US official. US President Donald Trump and Iranian President Masoud Pezeshkian electronically signed the "Islamabad Memorandum of Understanding" on Wednesday evening, intending to pave the way for ending the war launched by Washington and Tel Aviv against Iran on Feb. 28.

Discussions on the Qatar mechanism began in late May during talks in Doha involving Iranian Parliament Speaker Mohammad Bagher Qalibaf and other officials. Critics of the agreement have argued that it provides economic benefits to Iran before major progress is made on its nuclear program, while supporters say it could help support negotiations and reduce regional tensions.