As the United States escalates military pressure with airstrikes on Iran’s nuclear sites—identified as “Operation Midnight Hammer” on 22 June 2025—scrutiny has intensified over prior executive actions that released billions in frozen Iranian funds. Critics suggest these waivers, granted during the Biden administration, may have indirectly provided financial flexibility for Iran to support its nuclear infrastructure or other activities.
The Biden administration approved the release of billions of dollars in frozen Iranian assets through a series of sanctions waivers, primarily tied to Iraq’s energy purchases and a prisoner exchange with South Korea. While the past administration asserted the funds were restricted for humanitarian use, critics argued the cash flow gave Iran breathing room to support destabilizing activities—including terrorism.
$10 Billion Unlocked via Iraq
The most substantial tranche came through Iraq. The Biden administration repeatedly renewed a sanctions waiver—first issued in July 2023 and extended as recently as November 2024—allowing Iraq to transfer payments for Iranian electricity into restricted accounts abroad. The total accessible to Iran is estimated by Iranian media and U.S. officials to be around $10 billion, reflecting accumulated payments since a Trump-era waiver in 2018.
Although these funds were technically to be used only for humanitarian purposes like food and medicine, critics point out that such arrangements are easily fungible. By freeing up these restricted funds, Iran could reallocate internal resources for other uses, including military operations, weapons development, and support for proxy militias. As of December 2023, two transactions have occurred from accounts in Oman, though details remain undisclosed.
$6 Billion from South Korea to Qatar
In a separate high-profile case, the Biden administration in September 2023 facilitated the transfer of $6 billion in previously frozen Iranian oil revenues held in South Korea. The money was moved to banks in Qatar as part of a prisoner swap deal. Like the Iraq-based funds, this tranche was also supposedly restricted to humanitarian expenditures. However, U.S. officials confirmed in December 2023 that no significant amount of this $6 billion has been spent, with tighter controls imposed after the October 2023 Hamas-Israel conflict.
Political Fallout and National Security Concerns
Republican lawmakers strongly criticized the financial releases. They argued the administration was indirectly enabling Iran to continue supporting terrorism and escalating regional threats, especially against U.S. allies such as Israel.
“The money is fungible,” said Senator Tom Cotton (R-AR). “Every dollar that Iran can use for food or medicine is a dollar they don’t have to spend on those things—and can instead spend on drones, missiles, and terror proxies.”
Biden officials countered that the funds were subject to strict oversight and could be used only for humanitarian needs, not military or nuclear purposes. State Department spokespeople emphasized the transactions were legal, tightly monitored, and intended to benefit ordinary Iranians, not the regime.
Still, the broader geopolitical impact remains uncertain. With tensions rising in the Middle East and U.S.-Iran relations as fragile as ever, these waivers have emerged as a flashpoint in ongoing debates over Washington’s Iran policy.
Now, with bombs dropped on those facilities on June 22, 2025, ending the time for talking, the debate over these funds has intensified amid the military escalation.
References
Biden Withdraws Trump’s Restoration of UN Sanctions on Iran (18 Feb 2021)
https://apnews.com/article/joe-biden-donald-trump-iran-united-states-united-nations-aa8f38fa3bf7de3c09a469ec91664a3c
U.S. Treasury Renews Iraq Sanctions Waiver Allowing Payment to Iran (18 Jul 2023)
https://www.reuters.com/business/energy/us-issues-new-waiver-allowing-iraq-pay-iran-electricity-2023-07-18/
Biden Administration Unfreezes $6 Billion in Iranian Funds for Prisoner Swap (18 Sep 2023)
https://www.nytimes.com/2023/09/18/us/politics/iran-prisoner-deal.html
US says Iran cannot access its $6 billion in Qatar any time soon (12 Oct 2023)
https://www.reuters.com/world/us/us-signals-iran-wont-access-its-6-bln-qatar-any-time-soon-2023-10-12/
Posts Misrepresent Unfreezing of $16 Billion in Iranian Funds (10 May 2024)
https://www.factcheck.org/2024/05/posts-misrepresent-unfreezing-of-16-billion-in-iranian-funds/
U.S. Renews Waiver Letting Iraq Pay Iran for Electricity (14 Nov 2024)
https://www.reuters.com/world/us-renews-120-day-waiver-allowing-iraq-pay-iran-electricity-2024-11-14/
How the U.S. Bombarded Iranian Nuclear Sites Without Detection (22 Jun 2025)
https://apnews.com/article/320a85327f94ed7496f09564261f3148
IAEA Says Entrances to Tunnels at Iran’s Isfahan Site Hit by U.S. Strike (22 Jun 2025)
https://www.reuters.com/world/middle-east/iaea-says-entrances-tunnels-irans-isfahan-site-hit-by-us-strike-2025-06-22
Trump Says Iran’s Key Nuclear Sites ‘Obliterated’ by U.S. Airstrikes (22 Jun 2025)
https://www.reuters.com/world/middle-east/iran-israel-launch-new-attacks-after-tehran-rules-out-nuclear-talks-2025-06-21/
Hegseth, Caine Laud Success of U.S. Strike on Iran Nuke Sites (22 June 2025) https://www.defense.gov/News/News-Stories/Article/Article/4222533/hegseth-caine-laud-success-of-us-strike-on-iran-nuke-sites/
