Iran Says Unblocked Funds To Be Used For 'Non-Sanctioned Goods'

Iran's central bank chief said on Saturday that all of Iran's frozen funds in South Korea had been unblocked and would be used for "non-sanctioned goods".

Mohammad-Reza Farzin's post on social media appeared to confirm comments a day earlier by Washington, which said there would be restrictions on what Iran could do with any funds unfrozen under an emerging deal that has led to the release of five Americans from prison to house arrest in Tehran.

White House spokesperson John Kirby said Iran could only access the funds for basic necessities of humanitarian nature. An estimated $6 billion in Iranian assets have been held in South Korea.

"Essentially, the funds can only be accessed for food, medicine, medical equipment that would not have a dual military use," he said. "And there will be a rigorous process of due diligence and standards applied with input from the US Treasury Department."

However, It is not clear how the US will control the disbursements of the funds, which will be kept in six Iranian bank accounts in Qatar in euros, as any transfer of funds will be outside US control of dollar-denominated transactions.

Earlier, Iran's foreign ministry and government media insisted that the unfrozen funds would be under Tehran's direct and unrestricted control.

The five Americans will be allowed to leave Iran once the funds are unfrozen, a source familiar with the matter told Reuters.

"Congratulations to the foreign exchange diplomacy team for successfully releasing seized foreign currency resources," he said in the post on X.

He added that the costs of converting the funds from South Korea's won currency to euros would be accepted by the "third country" where the money would be deposited to buy "non-sanctioned goods".