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| Value of Iran Sanctions Relief Is Hard to Measure | |
| (about 3 hours later) | |
| A principal argument opponents raise against the nuclear agreement with Iran is that it would release at least $100 billion in impounded funds that Tehran could then use for attacks against the West and others. But exactly how much money the Iranians would actually receive and how they would use it, should the accord survive, remain difficult and unresolved questions. | A principal argument opponents raise against the nuclear agreement with Iran is that it would release at least $100 billion in impounded funds that Tehran could then use for attacks against the West and others. But exactly how much money the Iranians would actually receive and how they would use it, should the accord survive, remain difficult and unresolved questions. |
| The best answer appears to be that nobody really knows, not even the Iranians themselves. As in the broader dispute over whether the agreement would block or pave Iran’s pathways to a nuclear weapon, conflicting claims on both sides have clouded the issue. | The best answer appears to be that nobody really knows, not even the Iranians themselves. As in the broader dispute over whether the agreement would block or pave Iran’s pathways to a nuclear weapon, conflicting claims on both sides have clouded the issue. |
| The money sits in foreign banks, out of Iran’s reach. Estimates of the sum that could become available to Iran range from $29 billion to as much as $150 billion. | The money sits in foreign banks, out of Iran’s reach. Estimates of the sum that could become available to Iran range from $29 billion to as much as $150 billion. |
| Accumulated partly from Iranian sales of oil and other goods, the money is one of the most important, and perhaps misunderstood, components of the nuclear deal reached last month. | Accumulated partly from Iranian sales of oil and other goods, the money is one of the most important, and perhaps misunderstood, components of the nuclear deal reached last month. |
| “These numbers are extremely manipulable,” said Cliff Kupchan, chairman of the Eurasia Group, a political risk consultancy in Washington. “Depending on what you count, you can use your number for or against the deal.” | “These numbers are extremely manipulable,” said Cliff Kupchan, chairman of the Eurasia Group, a political risk consultancy in Washington. “Depending on what you count, you can use your number for or against the deal.” |
| The money has been impounded for years in accounts in China, India, South Korea and other Iranian trading partners because of American sanctions that would penalize those countries if Iran were permitted access. Under the accord, Iran could reclaim the money by complying with verifiable guarantees that Iranian nuclear work is peaceful. | The money has been impounded for years in accounts in China, India, South Korea and other Iranian trading partners because of American sanctions that would penalize those countries if Iran were permitted access. Under the accord, Iran could reclaim the money by complying with verifiable guarantees that Iranian nuclear work is peaceful. |
| Opponents of the accord, including Prime Minister Benjamin Netanyahu of Israel and leading Republicans in Congress, have described the money as a windfall, a jackpot and a signing bonus, valuing it at the upper end of the estimates. Some contend that the money may not even rightfully belong to Iran and is more analogous to the seized booty of a drug cartel. | Opponents of the accord, including Prime Minister Benjamin Netanyahu of Israel and leading Republicans in Congress, have described the money as a windfall, a jackpot and a signing bonus, valuing it at the upper end of the estimates. Some contend that the money may not even rightfully belong to Iran and is more analogous to the seized booty of a drug cartel. |
| Moreover, they argue, once the accord takes effect, there is nothing to stop Iran from using the money to strengthen its strategic military allies, including Hezbollah of Lebanon and Hamas of Gaza, regarded by the United States and Israel as terrorist groups. | Moreover, they argue, once the accord takes effect, there is nothing to stop Iran from using the money to strengthen its strategic military allies, including Hezbollah of Lebanon and Hamas of Gaza, regarded by the United States and Israel as terrorist groups. |
| Some also say Iranian officials will immediately seek to move much of the money into their country, putting it out of reach should sanctions be reinstituted under the nuclear agreement’s so-called snapback provisions for violations. | Some also say Iranian officials will immediately seek to move much of the money into their country, putting it out of reach should sanctions be reinstituted under the nuclear agreement’s so-called snapback provisions for violations. |
| Proponents of the accord, led by the Obama administration, say the total amount is much less than critics are asserting and would not be quickly accessible, a process that could take months. | Proponents of the accord, led by the Obama administration, say the total amount is much less than critics are asserting and would not be quickly accessible, a process that could take months. |
| “There is no ‘signing bonus,’ ” said Adam J. Szubin, the acting under secretary of the Treasury for terrorism and financial intelligence, in testimony about the accord on Wednesday to the Senate Banking Committee. | “There is no ‘signing bonus,’ ” said Adam J. Szubin, the acting under secretary of the Treasury for terrorism and financial intelligence, in testimony about the accord on Wednesday to the Senate Banking Committee. |
| Mr. Szubin estimated that Iran has $100 billion to $125 billion in foreign exchange assets worldwide, but that “our assessment is that Iran’s usable liquid assets after sanctions relief will be much lower, at little more than $50 billion.” | Mr. Szubin estimated that Iran has $100 billion to $125 billion in foreign exchange assets worldwide, but that “our assessment is that Iran’s usable liquid assets after sanctions relief will be much lower, at little more than $50 billion.” |
| He echoed what his boss, Treasury Secretary Jacob J. Lew, said in testimony on July 28 to the House Foreign Affairs Committee, arguing that Iran has pre-existing financial obligations that must be satisfied with much of the impounded money, leaving roughly $56 billion left. | He echoed what his boss, Treasury Secretary Jacob J. Lew, said in testimony on July 28 to the House Foreign Affairs Committee, arguing that Iran has pre-existing financial obligations that must be satisfied with much of the impounded money, leaving roughly $56 billion left. |
| The obligations include delayed payments to creditors, including China, one of Iran’s biggest trading partners. | The obligations include delayed payments to creditors, including China, one of Iran’s biggest trading partners. |
| “I am not going to say $56 billion is not a lot of money, but it’s not $150 billion, and it cannot be all used because they need to keep some foreign reserves to run their economy,” Mr. Lew said. | “I am not going to say $56 billion is not a lot of money, but it’s not $150 billion, and it cannot be all used because they need to keep some foreign reserves to run their economy,” Mr. Lew said. |
| He also sought to refute critics who assert that Iran would almost certainly use the money nefariously, arguing that Iran’s leaders face urgent economic problems. | He also sought to refute critics who assert that Iran would almost certainly use the money nefariously, arguing that Iran’s leaders face urgent economic problems. |
| “We can’t say that there won’t be any more money going toward malign purposes,” he said. “But the order of magnitude is way, way smaller, and it’s in line with the kinds of spending they have been doing anyway.” | “We can’t say that there won’t be any more money going toward malign purposes,” he said. “But the order of magnitude is way, way smaller, and it’s in line with the kinds of spending they have been doing anyway.” |
| Critics of the agreement have challenged the administration’s lower estimate of sanctions money, and what they call its imprecise accounting. | Critics of the agreement have challenged the administration’s lower estimate of sanctions money, and what they call its imprecise accounting. |
| Mark D. Wallace, chief executive of United Against Nuclear Iran, a New York-based advocacy group that had sought more stringent sanctions on Iran, said he put the estimate of available Iranian money under the agreement’s sanctions relief at closer to the $100 billion figure commonly cited by the pact’s opponents. | Mark D. Wallace, chief executive of United Against Nuclear Iran, a New York-based advocacy group that had sought more stringent sanctions on Iran, said he put the estimate of available Iranian money under the agreement’s sanctions relief at closer to the $100 billion figure commonly cited by the pact’s opponents. |
| “Are they going to write a $50 billion check to Hezbollah? No,” Mr. Wallace said. Still, he said, “some of the facts of this deal, the American people are finding troubling.” | “Are they going to write a $50 billion check to Hezbollah? No,” Mr. Wallace said. Still, he said, “some of the facts of this deal, the American people are finding troubling.” |
| Mr. Wallace, a former diplomat at American Mission to the United Nations who worked on the presidential campaigns for both George W. Bush and John McCain, acknowledged that “there is hyperbole on both sides” over the nuclear agreement, including the amount of impounded money. | Mr. Wallace, a former diplomat at American Mission to the United Nations who worked on the presidential campaigns for both George W. Bush and John McCain, acknowledged that “there is hyperbole on both sides” over the nuclear agreement, including the amount of impounded money. |
| “It is opaque,” he said. “But I do think the administration is trying to lower the number even further.” | “It is opaque,” he said. “But I do think the administration is trying to lower the number even further.” |
| Some economists have contended that Iran will have less money at its disposal even than Treasury officials have asserted. | Some economists have contended that Iran will have less money at its disposal even than Treasury officials have asserted. |
| They also contend that President Hassan Rouhani of Iran, who has staked his political survival on improving the lives of Iranians, is far likelier to use the freed money to rebuild Iran’s economy than to underwrite military adventurism or terrorism. | They also contend that President Hassan Rouhani of Iran, who has staked his political survival on improving the lives of Iranians, is far likelier to use the freed money to rebuild Iran’s economy than to underwrite military adventurism or terrorism. |
| “There are obviously tensions and competing needs, but what I expect him to do is fund development projects to jump-start the economy,” said Djavad Salehi-Isfahani, a professor of economics at Virginia Tech and a nonresident senior fellow at the Brookings Institution. | “There are obviously tensions and competing needs, but what I expect him to do is fund development projects to jump-start the economy,” said Djavad Salehi-Isfahani, a professor of economics at Virginia Tech and a nonresident senior fellow at the Brookings Institution. |
| “This money is going to be a lifeline for the government,” Mr. Salehi-Isfahani said. | “This money is going to be a lifeline for the government,” Mr. Salehi-Isfahani said. |
| As for the estimates of $100 billion or more, he said, “that number doesn’t exist.” | As for the estimates of $100 billion or more, he said, “that number doesn’t exist.” |
| If Iran had accumulated such a sum in its impounded foreign accounts, he and others argue, it would be partly reflected in a stronger foreign-exchange rate for the rial, Iran’s currency, on the anticipation that the government would soon be awash in dollars. | If Iran had accumulated such a sum in its impounded foreign accounts, he and others argue, it would be partly reflected in a stronger foreign-exchange rate for the rial, Iran’s currency, on the anticipation that the government would soon be awash in dollars. |
| Instead, the rial has remained stable or slightly weakened against the dollar over the past year. | Instead, the rial has remained stable or slightly weakened against the dollar over the past year. |
| Ali Vaez, the senior Iran analyst at the International Crisis Group, said questions about the precise amount of sanctions money that would be available had become contentious inside Iran as well, with Parliament designating a special committee to investigate. | Ali Vaez, the senior Iran analyst at the International Crisis Group, said questions about the precise amount of sanctions money that would be available had become contentious inside Iran as well, with Parliament designating a special committee to investigate. |
| Last week, the governor of Iran’s central bank, Valiollah Seif, said that of roughly $77 billion held abroad, only $29 billion would be usable because the rest had already been committed to petrochemical investments or as collateral for Chinese-financed development projects. | Last week, the governor of Iran’s central bank, Valiollah Seif, said that of roughly $77 billion held abroad, only $29 billion would be usable because the rest had already been committed to petrochemical investments or as collateral for Chinese-financed development projects. |
| But that could have been an attempt to dampen public expectations, Dr. Vaez said. | But that could have been an attempt to dampen public expectations, Dr. Vaez said. |
| “The Iranian government is coming under intense lobbying by different interest groups who are seeking to earmark these resources,” Dr. Vaez said in an email. The fear, he said, is that efforts to invest the money wisely “could drown in the swamp of pent-up public expectations of rapid economic recovery.” | “The Iranian government is coming under intense lobbying by different interest groups who are seeking to earmark these resources,” Dr. Vaez said in an email. The fear, he said, is that efforts to invest the money wisely “could drown in the swamp of pent-up public expectations of rapid economic recovery.” |