Biden Unlocks Fresh Funds to Iran Totaling Billions

Biden, Iran's Ali Khamenei (Win McNamee and Majid/Getty Images)
November 14, 2023

The Biden administration on Tuesday reapproved a sanctions waiver that will allow Iran to access upward of $10 billion in frozen assets, the State Department confirmed to the Washington Free Beacon.

The sanctions waiver, which was set to expire today after first being authorized for a period of 120 days in July, allows Iraq to transfer payments for multibillion-dollar electricity imports from Iran into accounts outside of the country that can be used by Tehran. This is the first time the Biden administration has renewed the waiver since the Iran-backed terror group Hamas launched an unprecedented attack on Israel that was reported to have been planned with Tehran's support.

Renewal of the waiver "allows Iraq to use its own funds to render payment for Iranian electricity imports into restricted Iranian accounts in Iraq," a State Department official told the Free Beacon, speaking only on background. "These restricted funds can only be used for humanitarian and other non-sanctionable transactions."

While Iran can only use the funds related to the sanctions waiver for the purchase of humanitarian goods, critics of the administration's policy argue that by freeing up this cash, Iran can allocate other financial resources to its global terrorism operation, which has been in overdrive since Hamas's October 7 attack on Israel. Analysts place the amount of cash accessible by Iran at upward of $10 billion, as the Free Beacon first reported on Monday.

In deciding to renew the waiver for an additional 120 days, the State Department official said, "Unfortunately, Iraq will not wean itself off of Iranian gas imports overnight."

The administration maintains that allowing these funds to be accessed by Iran limits its leverage of the Iraqi government, which has grown increasingly close to Tehran's hardline regime in recent years.

"It is in the U.S. interest that this money leave Iraq and be spent down from Iran's accounts held overseas," the State Department official went on. "Money used for non-sanctionable, allowable transactions—like humanitarian trade—is not available to Iran for other purposes, and it deprives Iran of leverage against the Iraqi government."

Critics, however, see the sanctions waiver as proof that the administration is maintaining Tehran's financial channels, even after it provided Hamas with the resources necessary to slaughter more than 1,200 Israelis and take hostage many others, including Americans.

"The White House just responded to October 7th with a $10 billion reward," Richard Goldberg, a senior adviser at the Foundation for Defense of Democracies and sanctions expert who served on the White House National Security Council, told the Free Beacon. "Congress needs to act quickly to cut off Iran's access to every penny."

Due to Iraq's reliance on Iran for energy, the State Department said, "this waiver continues to be necessary, to provide space and time for the government of Iraq to implement [Iraqi prime minister Mohammed Shia Al Sudani's] energy reform agenda."

"This waiver isn't about Iraq importing electricity or gas," Goldberg said in response to the State Department's comments about the waiver. "It's about Iran getting access to the cash."

The State Department also confirmed that like July's version of the waiver, Iraq will be able to transfer Iranian funds to third-party countries, including Oman and several in Europe.

While the Trump administration during its time in office granted a sanctions waiver to Iraq for these electricity payments, it gave the authorization only on the condition that the payments were kept in an escrow account in Baghdad. The Biden administration's version allows the money to move outside the country, making it easier for Tehran to access the funds, according to Goldberg.

The State Department maintains that Iraq's ongoing payments to Iran effectively reduce "Iranian leverage over Iraq."