“Do you remember the debate over how much money Iran was going to get? Sometimes you hear some of the presidential candidates putting a mistaken figure out of $155 billion. We never thought it would be that. Others thought it would be about a $100 billion because there was supposedly $100 billion that was owed and so forth. We calculated it to be about $55 billion when you really take a hard look at the economy and what is happening. Guess what, folks; you know how much they have received to date as I stand here tonight? About $3 billion. So what we said to people was true.” –Secretary of State John F. Kerry, remarks at J Street National Gala dinner, April 18, 2016

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The international agreement to restrain Iran’s nuclear ambitions has long been the subject of controversy. Because of international sanctions over its nuclear program, Iran had billions of dollars in assets that were frozen in foreign banks around the globe. With sanctions lifted, in theory those funds would be unlocked, with estimates of as high as $150 billion being suggested.

The Treasury Department in 2011 designated the entire Iranian government as a “primary money-laundering concern.” Iran is estimated to have spent as much as $15 billion in 2012 and 2013 propping up the government of Syrian dictator Bashar Assad, even as its economy imploded because of sanctions. So foes of the agreement argued that the deal will make it easier for Iran to expand its regional influence through its proxies.

A reader asked us to examine this quote from Secretary of State Kerry, in particular whether the $3 billion figure cited by Kerry was meaningful.

The exact amount of money at stake is not known. As Kerry noted, the Treasury Department has estimated that once Iran fulfills other obligations, it would have about $55 billion left.

“Estimates of total Central Bank of Iran (CBI) foreign exchange assets worldwide are in the range of $100 to $125 billion,” Adam J. Szubin, the acting Treasury undersecretary for terrorism and financial intelligence told Congress in 2015. “Our assessment is that Iran’s usable liquid assets after sanctions relief will be much lower, at a little more than $50 billion. The other $50-70 billion of total CBI foreign exchange assets are either obligated in illiquid projects (such as over 50 projects with China) that cannot be monetized quickly, if at all, or are composed of outstanding loans to Iranian entities that cannot repay them. These assets would not become accessible following sanctions relief.”

For its part, the Central Bank of Iran said the number was actually $32 billion, not $55 billion.

So why is Kerry talking about just $3 billion? The State Department did not seem especially eager to defend the figure when questioned by reporters, who asked whether the secretary was echoing complaints by Iran that the money has not come fast enough.

“He was reiterating the fact that there’s not this big windfall of cash,” said State Department spokesman John Kirby. “He wasn’t trying to make the Iranians’ case. That it comports with Iranian concerns that they’ve expressed, I don’t think I can dispute that.”

Here’s what’s really going on, based on interviews with experts and diplomats.

Iran has been in no rush to bring billions of dollars back to the country, in part because of inflationary concerns. Iran’s main interest was to gain access to the international banking system, because under sanctions only cash could be used. Thus when almost 2 million Iranians each year go to Iraq for a three- to four-day pilgrimage commemorating “Arbaeen” of Imam Hussein, whose death led to the split between Shiite and Sunni Muslims, Iranian pilgrims would need to carry more than $1 billion in cash.

Now, with sanctions relief, that’s no longer necessary. Iranian funds can be accessed in Iraq.

At the same time, however, the reluctance of many international banks to handle Iranian money has made it difficult for Iran to conclude international transactions, especially if dollars are involved. As an example, South Korea has purchased Iranian oil, and so Iran has accumulated South Korean won as payment. Iran would like to convert that into yen so it can purchase goods in Japan. But South Korean banks do not convert directly from won to yen, but first convert the won into dollars, and then into yen. That means the money, for literally milliseconds, would pass through the U.S. banking system. So far, South Korean banks have refused to make the transaction, fearing they would run afoul of U.S. sanctions still on Iran. A similar situation exists for funds currently in Omani rials, as Oman has purchased Iranian oil.

Eager to keep the deal regarded as a success in Iran, U.S. government officials have fanned the globe urging banks to be more open to deal with Iran. According to one report, meetings between U.S. officials and banking officials have been held in more than 15 countries so far this year, to little effect.

“The entire issue of Iran’s foreign exchange assets is murky,” said Cliff Kupchan, chairman of Eurasia Group, a consulting firm. “On the $55 billion, Iran claims foreign banks won’t move the money for fear of U.S. sanctions and their U.S. exposure. I think it’s a combination of bank fears, and that Iran doesn’t want the money repatriated as spending it would have inflationary effects and the money is quite secure in the Bank of Japan, in China, or wherever else.”

This was always Iran’s money, but the total amount made available remains unclear. But Kerry’s claim that Iran has “received” $3 billion since the agreement went into effect is misleading. That number reflects only what Iran has transferred back to the country, and belies the fact that U.S. officials are actively urging banks to give Iran even more access to the international banking system. It is simply a “snapshot in time” figure that is not especially relevant.

We’re not sure why Kerry used the figure–which he has not repeated–and he did note that the official U.S. government estimate is $55 billion. But that doesn’t excuse such a lowball number, especially if Kerry is arguing that administration claims on the deal have been truthful.

(c) 2016, The Washington Post · Glenn Kessler