Iranian Ally China Unwilling To Release Country’s Frozen Oil Revenues

A moderate Iranian news website claims the Islamic Republic’s frozen assets in China are worth between $22 and $30 billion, suggesting that even Tehran’s close ally would not pay back its debts.

According to Rouydad 24, which was temporarily blocked by the country’s authorities for allegedly anti-regime sentiment in March, China is one of Iran's biggest debtors while Iraq owes Tehran about $11 billion for electricity and gas exports. South Korea has about $7 billion of Iran’s oil revenues frozen.

All these countries are unable to unfreeze the Islamic Republic’s money because the regime is under several rounds of US sanctions, and they would not jeopardize their ties with Washington for the sake of paying Iran’s debts.

The issue of Iran’s blocked funds has come to fore again following the International Court of Justice (ICE) rejection last week of Tehran’s legal bid to free up $1.75 billion of its assets frozen by US court rulings. The world court said that it did not have jurisdiction to rule on the Iranian claim linked to the assets of the Central Bank of Iran (CBI) that were blocked to be paid in compensation to victims of a 1983 bombing in Lebanon and other attacks linked to the Islamic Republic. 

In a report published in 2022, the International Monetary Fund reported that by the end of April 2020, the amount of Iran's blocked assets around the world had reached $115.4 billion. And according to Alena Douhan, the UN Special Rapporteur on Unilateral Coercive Measures who visited Iran in May 2022, the Islamic Republic has between $100 billion and $120 billion trapped in foreign accounts because of US sanctions.

“I urge states to unfreeze the assets of the Central Bank of Iran in accordance with customary norms of international law,” Douhan said in Tehran, drawing criticism by several human rights defenders, such as Iranian Nobel Peace Prize Laureate Shirin Ebadi, and London-based human rights lawyer Shadi Sadr.

Sadr called Douhan a “mouthpiece for the Islamic Republic” and “a disgrace to UN human rights experts.” The role of this rapporteur was created at the UN Human Rights Council by the adoption of a resolution proposed by Iran on behalf of Non-Aligned Movement in 2014, and is the only UN rapporteur who was allowed to visit the country in about 20 years.

Iran’s properties abroad can be divided into two general categories: the state properties that are usually managed under the supervision of the Central Bank of Iran, and the properties of companies that are linked to the government, thus considered state-owned.

Moreover, Iran has shares in some companies such as Germany’s Mercedes-Benz, France’s Eurodif -- a multinational nuclear enrichment facility – and Aqaba oil pipeline in Jordan bought during the Pahlavi era. The country also owns lands and buildings such as the historical building of the Iranian Embassy in Washington and properties in the US and Canada belonging to the Alavi Foundation, the successor organization to the Pahlavi Foundation that was a nonprofit group used by Shah Mohammad Reza Pahlavi to advance Iran's charitable interests.

The Islamic Republic – especially since the administration of President Ebrahim Raisi began -- claims that it is selling more oil, gas, and electricity but apparently the revenues are piling up in Chinese, Iraqi or other countries’ banks. Unless the regime finds a way to revive its 2015 nuclear deal with world powers, it is not expected that Tehran would access its frozen funds, especially now that prominent opposition figures have been calling on world countries to allow the funds to be used to support the striking workers of the energy industry in the country.

Axios reported on Monday that the Biden Administration has been entertaining the idea of a partial nuclear deal with Iran and has discussed it with allies, a claim that seems very disappointing for the Iranian protesters who have been holding regular anti-regime rallies since September, when the regime’s hijab police beat to death 22-year-old Mahsa Amini.

The only other way that the Islamic Republic can push other countries to unblock the assets is through its policy of hostage taking, something that is historically the source of contention between the Islamic Republic and the US as well as other countries. Time and again, reports surface in Iranian media that some of the frozen funds will be imminently freed in exchange for Iran releasing one or some of the foreign nationals it has imprisoned during the years on trumped up charges such as espionage.

The editor of hardliner daily Kayhan, Hossein Shariatmadari, who is known to be the unofficial mouthpiece of the Supreme Leader, keeps suggesting that Iran should block the entry of ships and oil tankers into the Persian Gulf via the Strait of Hormuz to put pressure on the countries blocking the regime’s money to repatriate Iran's oil money.

What happens from here is unclear, but Iran is finding that even its allies will not make exceptions for its ever increasing debts.