By SCM Foreign Desk
WASHINGTON — President Donald J. Trump declared that the United States will use frozen Iranian assets under American custody to cover all monetary damages to commercial vessels and cargo harmed during ongoing military actions in Middle Eastern waters.
The statement, posted to his Truth Social platform, represents an unprecedented shift in how Washington intends to handle sovereign assets during an active regional crisis. It comes as military strikes between the United States, its regional allies, and Iranian-backed forces continue to disrupt critical global trade lanes.
”Please let this statement serve to represent, until further notice, that from this point forth, any and all damages done to Ships, Cargo, or anything related thereto, will be paid for by Iranian Money that the United States has in its possession, and controls,” Mr. Trump wrote, adding that he believes the policy is “the fair and equitable thing to do.”
The president’s decree follows days of intense exchanges across the Red Sea and the Strait of Hormuz, two of the world’s most critical transit chokepoints for energy supplies and global commerce.
Maritime security in the region has deteriorated rapidly following a wave of attacks attributed to Tehran and its regional proxy network. Recent missile strikes by Yemen’s Iran-backed Houthi militia against Saudi Arabian oil tankers in the Red Sea pushed the administration to issue direct warnings to Tehran.
Administration officials have repeatedly signaled that Washington considers Iran directly accountable for actions carried out by its proxy forces.
The friction in the waterways has already sent reverberations through global energy markets. Brent crude oil surged past $100 a barrel for the first time in months as shipping lines rerouted vessels around Africa, driving up insurance premiums and freight charges worldwide.
High Legal Hurdles and Precedents
While Mr. Trump framed the directive as a straightforward penalty, legal experts and foreign policy scholars quickly noted that seizing foreign sovereign funds to disburse to private maritime operators faces immense legal obstacles.
Sovereign Immunity: Under international law and the U.S. Foreign Sovereign Immunities Act (FSIA), foreign state property held abroad is generally shielded from executive attachment without specific statutory authorization or judicial forfeiture proceedings.
The European Analogy: Diplomatic observers likened the proposal to Western efforts to liquidate frozen Russian central bank assets to rebuild Ukraine—a legal process that has stalled in European courts for years over fears of undermining international financial stability.
Financial Countermeasures: Financial analysts caution that unilaterally transferring sovereign assets could prompt reciprocal actions against U.S. commercial holdings abroad or erode confidence in the dollar-dominated global banking system.
Political and Geopolitical Fallout
In Congress, the announcement sparked instant reaction across party lines. Allies of the president praised the policy as an aggressive, common-sense measure to force Iran to pay for regional instability.
Critics, however, questioned both the legality and execution of the plan, warning that it risks closing off remaining diplomatic avenues at a time when UN officials warn the regional crisis is nearing a dangerous tipping point.
Tehran has not yet officially responded to the president’s threat to confiscate its funds, though Iranian officials have previously warned that any attempt to impound state assets would be met with swift retaliatory measures in the Gulf.
