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.
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. (Mandel NGAN / AFP via Getty Images)
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
An Iranian police officer stands on patrol near a poster depicting Iranian soldiers holding a net shaped like the Strait of Hormuz with U.S. military aircraft ensnared in Tehran, Iran, on May 9, 2026. (Majid Saeedi/Getty Images)
“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.
A woman walks past a billboard showing a military hand holding the Strait of Hormuz with Farsi text which reads, “In Iran’s hands forever,” “Trump couldn’t do a damn thing,” “The control of Strait of Hormuz will be Iran’s forever,” in Vanak Square, in northern Tehran, Iran, on April 16, 2026. (Vahid Salemi/AP)
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.”
Iranians burn American flags during an anti-U.S. demonstration outside the former U.S. embassy headquarters in Tehran, Iran, on May 9, 2018, after President Donald Trump withdrew from the 2015 Iran nuclear deal. (Photographer: Ali Mohammadi/Bloomberg via Getty Images)
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.