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Tuesday, October 3, 2023

U.S. advances deal with Iran to swap prisoners, free frozen oil funds

The Biden administration has issued a waiver for banks to transfer $6 billion in frozen Iranian oil funds without fear of U.S. sanctions — a key step in securing the release of five American citizens detained in Iran, said people familiar with the matter. As a part of the arrangement, the administration will release five Iranian citizens detained in the United States.

The move was notified to Congress on Monday and is likely to come as a relief to U.S. prisoner’s families and supporters, many of whom have waited several years for the return of the detainees. It also expected to come under harsh criticism from Republicans in Congress opposed to any agreement that allows for the release of frozen Iranian funds, money that is being transferred from South Korea to Qatar and limited for the purchase of humanitarian goods like food or medicine.

The deal marks a major breakthrough for the longtime adversaries who remain at loggerheads over a range of issues, including the rapid expansion of Tehran’s nuclear program and Iran’s harsh crackdown on dissent. It also comes as President Biden and Iranian President Ebrahim Raisi prepare to travel to New York for the annual United Nations General Assembly next week.

Amid the prisoner release talks, the United States and Iran have been discussing a possible informal arrangement that would seek to place some limitations on Iran’s nuclear program and avoid an international crisis.

The U.S. prisoners held by Iran include Siamak Namazi, an Iranian American who had been behind bars in Tehran for nearly eight years, the longest duration the Islamic republic has jailed any American. Others include Morad Tahbaz, an Iranian American who also holds British citizenship, and Emad Shargi, an American Iranian dual citizen. Each were released from Iran’s notorious Evin Prison last month in an initial step of the deal. Two other American detainees in the swap have not been named at the request of their families.

While the five American detainees remain in Iran, the waiver decision, first reported by the Associated Press, tees up the prisoners’ full release, which could happen as early as next week amid the high-profile U.N. gathering, according to people familiar with the matter. They spoke on the condition of anonymity to discuss sensitive details.

South Korea, one of Iran’s largest oil customers, has held $6 billion in Iranian funds as a result of a waiver issued by the Trump administration in 2018 allowing it to continue purchasing Iran’s oil. Those funds became stuck in Seoul in 2019 when the Trump administration increased sanctions on Iran.

The new waiver signed by Secretary of State Antony Blinken is aimed at providing assurances to foreign banks that they will not be subject to U.S. sanctions for converting and transferring to Qatar Iran’s funds in South Korea. Under the arrangement, Iranian funds in Qatar’s central bank can be used only to purchase non-sanctionable goods.

Before the prisoner deal, the Biden administration’s rapport with Tehran has been marked by deep distrust and the failure to revive a nuclear deal that Biden vowed to renew when he ran for president. Tehran has repeatedly refused to talk directly with Washington, requiring third parties to help broker discussions. Qatar played a significant role in facilitating discussions between the two sides over the detainee release and hosting the talks, said officials familiar with the matter. Switzerland, Oman, the United Arab Emirates and Iraq also played a role.

U.S. officials have insisted prisoner negotiations are not linked to nuclear discussions. European officials, who support a deal between the United States and Iran to restrain Tehran’s nuclear program, hope that progress on detainees could help pave the way for more productive discussions.

Iran’s nuclear program has expanded significantly following the decision by Donald Trump to pull the United States out of the 2015 nuclear deal forged during the Obama administration that imposed strict limitations on Iran’s program in exchange for sanctions relief.

Karen DeYoung contributed to this report.

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