The United States is working with Qatar on a plan that could give Iran access to billions of dollars in frozen funds for humanitarian purchases, The Wall Street Journal reported, citing people familiar with the matter.

The plan, which has not yet been finalised, would initially involve around $6 billion in Iranian funds held in Qatar, according to the report. The money would reportedly be used for purchases of food, medicine and other humanitarian goods ordered by Iran’s central bank.

The arrangement could also serve as a model for handling other pools of Iranian assets frozen abroad under sanctions, the report said.

Iran still needs to agree to the mechanism, according to WSJ. The proposal is expected to be among several issues raised during upcoming nuclear discussions between Washington and Tehran following a deal to pause hostilities and reopen the Strait of Hormuz.

The report said the funds would come from Iranian oil revenues that have been blocked overseas by sanctions. Washington would need to issue waivers and authorisations to allow such transactions to move forward.

The possible release of frozen assets comes as part of wider efforts to encourage diplomatic progress with Iran. However, critics say easing access to funds before Tehran makes concessions on its nuclear programme could give Iran significant benefits too early in the process.

Supporters argue that a controlled mechanism would allow humanitarian purchases while giving Washington greater oversight of how the funds are used.

     Read more:

• Why Pakistan became a key mediator in U.S.-Iran talks
• Iran sends senior delegation to Qatar for indirect U.S. peace talks

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