US and Iran sign memorandum of understanding
As he left Versailles, President Trump referred to the memorandum of understanding between the United States and Iran, shouting to reporters, “It’s signed.”
WASHINGTON – President Donald Trump touted a newly signed memorandum of understanding with Iran while criticizing former President Barack Obama for giving $1.7 billion in “green cash” to Iran as part of the 2015 Iran nuclear deal, which Trump abandoned.
But President Trump’s tentative deal to end the US war with Iran has come under scrutiny for potentially delivering much larger financial benefits to Iran in the form of a $300 billion redevelopment fund.
The memorandum of understanding that President Trump signed with Iran on June 17 has raised questions about the sources of funding for the Iran Redevelopment Fund and whether the United States could end up being drawn into its financing. President Trump has insisted that no US dollars will be put into the fund, but he has not said which countries or private organizations will pay for it.
Under the agreement, the U.S. and Middle Eastern partners will “develop a final mutually agreed upon plan for the reconstruction and economic development of the Islamic Republic of Iran at a cost of at least $300 billion,” according to the memorandum of understanding.
The United States will also lift all sanctions on Iran and unfreeze its assets, but only if Iran does not develop nuclear weapons and fulfills its commitments in the final deal to dispose of highly enriched uranium, which the Trump administration hopes to accomplish within 60 days. After President Trump signed the memorandum, the United States immediately lifted restrictions on Iranian oil exports.
The fund is intended to encourage Iran to complete a final deal with the United States and jump-start Iran’s economic development and infrastructure improvements after being devastated by the war. The Fund’s implementation mechanism will be finalized in a final agreement with Iran, but accessing funds from the Fund must comply with the terms of the peace agreement.
However, the document does not specify which countries will finance the fund or whether the private sector will provide the funding. President Trump, who attended the G7 meeting in France, denied that the United States would provide funding.
“We’re not investing. We’re not putting in a dime,” President Trump said on June 17. “People can decide whether to do that or not, but it’s up to them.”
“There is no $300 billion payment by the US to Iran, that’s Fake News!” Trump later said in a post on Truth Social. “All America needs is success, lower oil prices, and victory.”
Will the $300 billion fund be funded by private donors?
Vice President J.D. Vance made the same promise he made to reporters at a June 18 White House press conference. “The United States will not give up a dime, and the economic benefits and even sanctions relief associated with this deal will only be realized if Iran takes action.”
But if the United States isn’t paying into the fund, who will?
More than half of the fund’s $300 billion has already been invested, and will consist entirely of private sector money, Reuters reported, citing unnamed people familiar with the deal.
Reuters reports that companies based in the United States, Gulf Arab states, Asia, South America and Africa have pledged funding, and that the administration views the fund as a private investment vehicle rather than a government recovery program.
Mr. Vance did not specify the specific source of funding, but suggested that private investors and Iran’s neighbors would provide the funding.
Asked who would pay for the redevelopment funds, Vance said: “There is a great desire from the Arab world and outside the Arab world to actually engage Iran if it behaves appropriately.”
Vance cited the United Arab Emirates as an example. “Let’s just say they want to invest in building power plants. That’s not really possible at the moment because of the structure of US sanctions,” the vice president said. “So what we are saying is that if you guys act and Emirates itself wants to build a power plant, we will provide the necessary sanctions relief to make that possible.”
Vance added that discussions about the source of the fund’s funding are preliminary, as Iran must first agree to the nuclear provisions in the final deal.
“This is a long way off because it presupposes a change in Iranian behavior,” he said.
Trump vs. Obama over Iran
President Trump has for years attacked President Obama for demanding a $1.7 billion cash payment to Iran. But the deal was the result of the Obama administration’s 2016 settlement with Iran, ending decades of legal disputes after Iran did not receive military equipment for which Iran paid the United States $400 million before the 1979 revolution.
President Trump also regularly accused President Obama of giving $150 billion to Iran as part of the nuclear deal with Iran. But Obama’s deal did not include direct payments to Iran and instead, like Trump’s preliminary deal, lifted a freeze on Iran’s access to its own cash in foreign bank accounts totaling about $50 billion.
Nevertheless, President Trump accused President Obama of “bribing” Iran to get the nuclear deal signed.
“He tried to bribe his way out, and I didn’t do that,” Trump said of Obama at the Group of Seven Summit in France this week. “So you know what the Iranians did? They laughed at Obama and said, ‘He’s a son of a stupid country.'”
Contributed by: Reuters
X Contact Joey Garrison at @joeygarrison.
