Major dispute to threaten Trump's Iran deal over billions in frozen Tehran funds: expert

As U.S. and Iranian negotiators met in Switzerland on Sunday, a regional analyst warned that a dispute over billions in potentially unfrozen Iranian assets could quickly test the durability of a fledgling interim agreement.

The disagreement is emerging, they say, as Washington and Tehran begin implementing the memorandum of understanding signed June 17, with negotiators holding the first round of talks at Bürgenstock, near Lucerne, Switzerland.

According to Iran International, President Masoud Pezeshkian had signaled Tehran's expectations early Sunday, saying, "$6 billion of our funds in Qatar will be returned. Trump, who tried to deny Iran its rights, acknowledged them in his recent speech."

The dispute traces back to discussions at the G7 summit in Évian-les-Bains, France, where world leaders debated the issue.

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"We have taken their money, it isn't our money, it is their money, and we froze it," President Donald Trump said. "At a certain point in time, I guess we're going to have to give it back."

He also stressed that any access to the funds remains strictly conditional, writing on Truth Social that Iran would receive "not ten cents" during the 60-day negotiation period if it failed to uphold its commitments.

"There are effectively two competing narratives about the frozen funds," Alex Vatanka, a senior fellow at the Middle East Institute, told Fox News Digital.

"Releasing frozen assets is not simply an economic question. It is one of the central political tests of trust between Tehran and Washington and will likely become one of the first major implementation disputes in the weeks ahead," Vatanka added.

Paragraph 11 of the MOU framework states that the United States "undertakes to make fully available" restricted and frozen Iranian funds.

However, the agreement ties any release of funds to a step-by-step process based on compliance, rather than granting immediate, unrestricted access.

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"First, there remains considerable uncertainty over the total amount of Iranian assets frozen abroad," Vatanka said.

"Iranian officials often speak of more than $100 billion, while Western estimates range higher. The immediate negotiations, however, appear focused on securing access to roughly $24 billion to $25 billion as an initial tranche."

Iran's frozen assets are widely estimated at between $100 billion and $120 billion and held under sanctions and financial restrictions in countries including China, India, Iraq and South Korea, according to reporting by the Wall Street Journal.

Vatanka said the central dispute extends beyond the size of the payout.

"The real dispute is not simply about how much money Iran receives, but who ultimately controls how it is spent."

"Iranian officials are emphasizing sovereignty over the funds, while the United States is trying to preserve leverage by attaching conditions to their use," he added as talks got underway Sunday.

In a statement on X, Qatar's Foreign Ministry said the talks are aimed at reaching a comprehensive and lasting agreement covering all elements of the framework.

Spokesman Majed bin Mohammed Al Ansari said technical teams were negotiating the final deal while oversight groups would monitor implementation and track progress.

The U.S. and Qatar are exploring a mechanism to channel an initial $6 billion toward humanitarian purchases, including food and medicine, according to reports.

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However, Western intelligence officials remain concerned that unfrozen funds could be diverted to regional conflicts rather than domestic development projects.

Reuters reported that Iran has already signaled to Hezbollah that increased financial support could resume if Tehran's cash flow improves.

"This issue also has an important regional dimension," Vatanka said. "Iran has pledged to direct a portion of those reconstruction funds toward supporting its weakened proxy network in Lebanon."

"The United States has insisted that Iran cannot use any unfrozen assets to fund terrorist organizations, warning that access to the funds would be revoked if Tehran violates the terms of the agreement," he added.

Vatanka said the two sides also remain divided over the broader purpose of the agreement.

"Tehran is presenting the roughly $25 billion as money that will be released gradually and invested in rebuilding the country's infrastructure, with officials talking about roads, airports, transport corridors and projects that visibly benefit ordinary Iranians."

"Washington, however, appears to be describing something much narrower," Vatanka added.

"U.S. officials have indicated they want the funds released through controlled mechanisms, primarily for humanitarian and other approved civilian purchases, rather than giving Tehran unrestricted access."