19:19 GMT28 October 2020
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    After withdrawing from the Iran nuclear deal in 2018, Washington applied severe economic pressure on the Islamic Republic through sanctions, import restrictions, and asset freezes. In 2019, Tehran appealed to the International Court of Justice to try to get nearly $2 billion in frozen funds back from the United States.

    Iran is stepping up its efforts to use its foreign currency reserve assets abroad, notwithstanding pressure from Washington, President Hassan Rouhani has said.

    Speaking at a meeting of the economic co-ordination headquarters on Tuesday, Rouhani said that the Government would work to accelerate the implementation of agreements with countries in the region to regain access to and make use of Iranian assets located abroad.

    Rouhani’s comments come after an announcement by Iranian Central Bank governor Abdolnaser Hemmati on Monday that Tehran had reached an agreement with Iraqi officials to unlock Iranian assets stuck in Iraqi banks to buy basic commodities and humanitarian goods exempt from US restrictions. Iraqi banks are believed to contain up to $5 billion in Iranian assets amid Iran’s export of large quantities of electricity and gas to the war-torn nation.

    The news follows the Trump administration’s introduction of new sanctions across Iran’s financial sector last week, including the blacklisting of 18 major state and commercial banks, a move which Tehran dubbed an escalation of the “psychological war” against the Islamic Republic.

    In his comments on Tuesday, Rouhani said Iran’s use of funds held abroad has increased despite US efforts to restrict Tehran’s economic interaction with other nations.

    Iranian Foreign Minister Mohammad Javad Zarif, also present at the meeting, presented Rouhani and other members of the government a report on his recent visit to China, where he spoke with Chinese officials about expanding economic co-operation in areas including tourism, industry, IT, communications and financial and monetary exchange mechanisms.

    Rouhani also noted that Iran must expand its co-operation with the Eurasian Union, saying Tehran has the capacity not only to provide the Russia-led bloc with goods, but to serve as a partner for the transit of goods.

    Washington slapped Tehran with tough energy and banking sanctions in May 2018 after the Trump administration unilaterally withdrew from the Joint Comprehensive Plan of Action (JCPOA) nuclear agreement, which offered Iran sanctions relief in exchange for a scaling back of its nuclear programme and a pledge not to develop nuclear weapons.

    Tehran asked the JCPOA’s western European signatories to develop an exchange mechanism to allow the bloc to continue to do business with Tehran without violating US sanctions. However, apart from limited use to help Iran tackle the coronavirus pandemic, the mechanism has remained largely unused. This has prompted Iran to roll back some of its commitments under the JCPOA.

    Iran is believed to have tens of billions of dollars in funds frozen in banks around the world, including nearly $2 billion in the United States. US courts have gradually eaten away at the Islamic Republic's wealth stashed in US coffers, ordering frozen funds to be used to pay the families of US servicemen killed in the 23 October 1983 truck bombings in Beirut, Lebanon, which Washington has blamed on Tehran, and to compensate victims of 9/11, despite the fact that Iran had nothing to do with the Twin Tower terrorist attacks.

    In 2019, the International Court of Justice ruled that Iran has a legal claim to the $2 billion in assets it still has frozen in US banks. Last month, Washington urged the ICJ to throw out Iran’s bid to get its cash back, claiming that The Hague does not have jurisdiction in the case.

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