Iran’s frozen assets need leverage before confiscation

When I first argued that Congress should create a framework for Iran’s frozen assets, the principle was simple: release for compliance, confiscation for defiance. That principle still stands. What the legislative work that followed has clarified is the sequence required for it to be effective.Before Congress creates a broader mechanism for confiscating Iranian assets, it must first ensure that those assets can be identified, preserved, conditioned, and maintained as leverage long enough to influence Iranian behavior. A discussion draft has now been presented that focuses specifically on that preliminary stage: strengthening and preserving the leverage itself.Confiscation is not the first step. Leverage is. That distinction matters because frozen assets and confiscated assets are legally and strategically different. Under the current sanctions system, blocking an asset immobilizes it without transferring ownership to the United States. The owner cannot freely transfer, withdraw, or otherwise deal in the property, but title remains with the blocked person unless another legal authority changes that status.That is precisely what gives frozen assets their potential strategic value. As long as they remain blocked, identifiable and legally controlled, they can continue to influence the choices of the party seeking their release.An indefinite freeze, however, does not automatically create effective leverage. If Congress has not clearly defined what information must be reported, what conditions govern release, and what conduct changes the legal status of the assets, Iran may know that its money is inaccessible without knowing what behavior changes that outcome. By defining those conditions, a leverage framework turns an indefinite restriction into a conditional choice.Congress has already demonstrated that Iranian assets can move beyond simple blocking. Section 8772 of Title 22 permits certain Iranian financial assets to be subjected to execution or attachment in connection with specified terrorism-related judgments. But that statute was built for particular assets, particular litigation, and defined judicial findings — not as a comprehensive framework for preserving leverage before deciding whether confiscation should occur.The discussion draft addresses a different problem. It begins with something deliberately less dramatic than confiscation: information and control.The draft would require detailed reporting on significant blocked Iranian assets, including their value, class, location, custodian, ownership, legal basis for blocking, competing claims, and relevant licenses. It would also require separate identification of Iranian sovereign assets held in foreign jurisdictions, consultation between the State and Treasury departments, and greater international coordination.Most importantly, the discussion draft does not authorize confiscation, conversion, expenditure, or adjudication of claims. That limitation is intentional. The first stage is designed to preserve leverage, not consume it.Only once that architecture is secure does the original confiscation proposal become fully meaningful. Congress can then address what conduct constitutes material defiance, what legal findings must precede confiscation, which categories of assets may be affected, what protections apply to legitimate third-party interests, and what authorized purposes should govern the disposition of confiscated funds.That is where the original proposal belongs: not discarded, but placed at the end of an enforcement sequence.The sequencing matters strategically as much as legally. Assets confiscated too early lose their bargaining value because permanently transferred or spent assets can no longer serve as an incentive for future compliance. Assets frozen indefinitely without a clear framework governing their preservation, release, or eventual disposition leave sanctions detached from any defined strategic outcome.A stronger approach therefore separates the stages. Congress first identifies and preserves the assets, then protects the leverage they create, then establishes measurable conditions governing release or escalation, and only afterward determines when continued defiance justifies moving from blocking to confiscation.That sequence produces a clearer message for Iran. The assets are not frozen simply because relations are hostile, and confiscation would not occur simply because the assets exist. The framework would connect identifiable behavior to identifiable consequences: compliance preserves the possibility of release; material defiance activates a defined pathway toward confiscation.That was always the logic behind release for compliance, confiscation for defiance. What the legislative process has clarified is that the principle requires two stages, not one.I WARNED THE FBI ABOUT IRAN’S SLEEPER CELLS IN 2017. NOBODY LISTENED — NOW WASHINGTON IS PANICKINGThe discussion draft addresses the first stage. The original proposal addresses the second.First create the leverage, then preserve it, and only then decide when defiance forfeits it.Pedro Ordein is a finance and operations professional with more than 30 years of experience in public-sector governance, large-scale project analysis, and institutional decision-making.