Foreign Minister Fuad Hussein has urged the US to find a swift solution for releasing Iran's frozen funds in Iraq on Friday, according to the Iraqi News Agency (INA).

Hussein emphasized to US Acting Under Secretary for Political Affairs John Bass "the need for a quick and fair solution that serves the interests of both parties and enhances financial stability in the region," according to an Iraqi Foreign Ministry statement.

This is while, in May, a senior Iranian official stated that Tehran has no blocked funds in Iraq, following sanction waivers issued by the current US administration in 2023 and earlier this year, allowing Baghdad to release these funds.

Iran exports natural gas and electricity to Iraq, but Baghdad could not pay the debt due to US banking sanctions imposed on Tehran in 2018. However, the renewal of Iraq’s waivers by both the Trump and Biden administrations has mainly been a routine matter.

Nevertheless, while exempting Iraq from sanctions on importing energy from Iran is not a new policy, Baghdad's permission to make payments in hard currency is a recent development. The Biden administration introduced this provision last year as part of the waiver and has faced backlash from US lawmakers since.

The Biden administration has stated that the funds, held in euros in Oman, can only be used for humanitarian purposes under the waiver's terms. However, critics contend that this arrangement has effectively freed up resources for Iran to support its proxies across the Middle East and advance its nuclear weapons program.