A proposed $300 billion investment fund for Iran included in the U.S.–Iran memorandum of understanding may face major legal obstacles under existing U.S. sanctions law, raising questions about whether the plan is workable even if both sides move toward a final agreement.
The memorandum, digitally signed Wednesday by President Donald Trump and Iranian President Masoud Pezeshkian, is aimed at ending the war and restoring traffic through the Strait of Hormuz. As part of the 14-point plan, the U.S. agreed to lift sanctions on Iran, allow Tehran to increase its oil revenue and regain access to parts of the international banking system, among other measures.
But one of the most ambitious parts of the framework — a proposed $300 billion private investment fund for Iran’s reconstruction and development — may collide with a longstanding U.S. determination that Iran’s construction sector is controlled directly or indirectly by the Islamic Revolutionary Guard Corps.
The issue is not just technical. It goes to whether one of the central economic promises of the Trump-Iran framework can realistically be executed under current U.S. law. If the $300 billion fund depends on investment in sectors Washington has already identified as IRGC-controlled, experts say the administration may be forced to rely on temporary waivers or new licenses — a legal structure that could make long-term investors wary and complicate any final deal.
The State Department formally determined in 2020, and again in May 2025, that Iran’s construction sector was controlled directly or indirectly by the Islamic Revolutionary Guard Corps. Under the Iran Freedom and Counter-Proliferation Act, known as IFCA, that finding creates sanctions risks for people or companies doing business in the sector.
Miad Maleki, a senior fellow at the Foundation for Defense of Democracies and a former Treasury Office of Foreign Assets Control executive, told Fox News Digital that the legal and sanctions-related problems surrounding the fund are more complicated than simply asking whether Congress would have to approve it.
“I think Congress is unavoidable for a durable version of that investment,” Maleki said. “If we have a final deal and now as part of this commitment, the U.S. government and allies are going to have to go in and help Iran to set up this fund or get access to such a fund.”
Maleki said the president has meaningful unilateral authority to begin easing restrictions. Trump could revoke relevant executive orders, direct the Treasury Department’s Office of Foreign Assets Control to issue general licenses and waive some congressional sanctions laws.
But he said that does not mean the fund would be durable enough to attract serious investors.
“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 said, referring to waivers for mandatory sanctions tied to Iran’s construction sector.
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“If you’re anyone who is in an investment-type business, it’s hard to find someone who would be investing in construction-type projects that take time,” he added. “These projects are not like 180-day projects.”
The concern, Maleki said, is especially acute in Iran, where investors would face sanctions uncertainty, political risk and an unreliable partner.
“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 said.
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That structure raises a broader question about whether negotiators were truly expecting the memorandum to mature into a final, durable 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 said.
“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 added. “I think it would be almost close to impossible to get something that would materialize.”
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Maleki said one possible explanation is that the U.S. side may view its role as limited to providing sanctions relief, while leaving Iran and potential investors to sort out whether the fund can actually be built.
“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,” he said, describing one possible view of the negotiators’ approach.
The Treasury Department and the Iranian mission to the U.N. did not immediately respond to Fox News Digital’s request for comment.
The issue could become a congressional flashpoint. Because IFCA waivers are limited to 180 days and require justification to Congress, any long-term investment framework for Iran could force the administration to repeatedly defend why sanctions tied to an IRGC-controlled sector should be suspended.
The legal obstacles also come as critics warn the pact gives Iran major economic benefits while leaving some of the most difficult nuclear and security questions for future negotiations. Maleki said the U.S. had already built significant leverage over Iran through sanctions, military pressure and the blockade, but may now be trading that leverage for the reopening 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 argued that Iran is likely to use the process to delay rather than rush toward 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 said. “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 and a former national security adviser to Vice President Dick Cheney, warned that any economic windfall from the agreement could help the IRGC rebuild.
“It’s almost certain that the IRGC will use any economic windfall granted by this MOU to reconstitute as much of their conventional military as possible as fast as possible — especially the vast missile and drone arsenal that the IRGC believes proved critical to the strategic successes they achieved during the war,” Hannah told Fox News Digital.
