SouthernWorldwide.com – An ambitious $300 billion investment fund for Iran, a key component of the recent U.S.-Iran memorandum of understanding, may be practically unachievable due to existing U.S. sanctions law, an expert has warned.
The memorandum, signed by President Donald Trump and Iranian President Masoud Pezeshkian, aims to end the ongoing conflict and ensure the free passage through the Strait of Hormuz. A significant aspect of the 14-point plan includes the lifting of U.S. sanctions on Iran, allowing Tehran to boost its oil revenue and regain access to international banking systems.
However, the proposed $300 billion private investment fund for Iran’s reconstruction and development faces a significant hurdle. This is due to a long-standing U.S. determination that Iran’s construction sector is under the direct or indirect control of the Islamic Revolutionary Guard Corps (IRGC).
This legal challenge questions the feasibility of one of the core economic promises within the Trump-Iran framework. If the fund relies on investments in sectors already identified as IRGC-controlled by the U.S., the administration might need to depend on temporary waivers or new licenses. Such a structure could deter long-term investors and complicate any final agreement.
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The U.S. State Department officially designated Iran’s construction sector as being controlled by the IRGC in 2020 and again in May 2025. Under the Iran Freedom and Counter-Proliferation Act (IFCA), this designation carries sanctions risks for any individuals or companies involved in business within this sector.
Miad Maleki, a former Treasury official, suggests that for a stable and durable version of this investment fund to materialize, congressional involvement would be necessary. If a final deal is reached, the U.S. government and its allies would need to actively assist Iran in establishing or accessing such a fund.
Maleki noted that the president possesses considerable unilateral authority to begin easing restrictions. This includes revoking relevant executive orders and directing the Treasury Department’s Office of Foreign Assets Control to issue general licenses, potentially waiving certain congressional sanctions laws.
However, he cautioned that these executive actions alone might not be sufficient to attract serious investors for a long-term commitment.
“Technically, the fund could be switched on through some kind of an executive action plan alone, but it would be on paper and it would have to be renewed every 180 days,” Maleki explained, referring to the mandatory 180-day waivers for sanctions tied to Iran’s construction sector.
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Maleki emphasized the difficulty for investors, especially in a context like Iran, where sanctions uncertainty, political risks, and an unreliable partner are present. He stated that projects requiring significant, long-term investment are not compatible with short, renewable waivers.
“It’s hard to find someone who would be investing … based on something that could not just be renewed if Iran, especially in the context of Iran, where you don’t really have a reliable partner, where things can blow up any minute,” he added.
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This situation raises doubts about whether the negotiators genuinely anticipated the memorandum evolving into a final, lasting agreement.
“The more I’ve been digging into this memorandum of understanding, sanctions paragraphs of this memorandum, the more I have come to this kind of doubt that the negotiators really were counting on a final deal to be reached,” Maleki stated.
“If you do get to a final agreement and you’re looking into actually meeting the commitments that you made, this $300 billion investment fund, it’s not something you can really set up,” he concluded. “I think it would be almost close to impossible to get something that would materialize.”
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One potential interpretation is that the U.S. side sees its role as primarily providing sanctions relief, leaving Iran and potential investors to navigate the practicalities of establishing the fund.
“We’re going to give them the waivers that they need. If they can’t find investors to invest in this, that’s their problem,” Maleki described as a possible perspective from the negotiators.
The issue of IFCA waivers, which are limited to 180 days and require justification to Congress, could become a contentious point. This could force the administration into repeatedly defending the suspension of sanctions tied to IRGC-controlled sectors.
Critics also argue that the pact grants Iran significant economic advantages while deferring critical nuclear and security issues for future negotiations. Maleki pointed out that the U.S. had substantial leverage over Iran through sanctions, military pressure, and a blockade, but may have traded this leverage for the reopening of the Strait of Hormuz.
“We reached a point that we had leverage that no U.S. president has ever had with Iran,” Maleki said. “Yet we gave that away for this, for the opening of the Strait of Hormuz.”
He suggested that Iran is likely to use the negotiation process to delay rather than expedite a final agreement.
“Iran is going to go back to its playbook of dragging, buying time with the sanctions relief-type incentives that I’m seeing in this package,” Maleki predicted. “I do not think that the Iranian regime is going to rush to get to a deal.”
John Hannah, a senior fellow at the Jewish Institute for National Security of America, warned that any economic benefits derived from the agreement could inadvertently bolster the IRGC.
