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U.S. Pushes Iran Prisoner Swap, Oil Fund Release Deal

The waiver approved by the Biden administration allows banks to move $6 billion in Iranian assets without worrying about U.S. sanctions, and is a crucial part of the arrangement.

According to persons familiar with the case, the Biden administration has given a waiver allowing banks to move $6 billion in frozen Iranian oil funds without fear of US penalties, a critical step toward winning the release of five American nationals held in Iran. The administration will release five Iranian individuals arrested in the United States as part of the agreement.

The action was announced to Congress on Monday, and it is expected to come as a comfort to the families and supporters of US inmates, many of whom have been waiting for the detainees’ release for several years. It is also expected to face heavy criticism from Republicans in Congress who are opposed to any agreement that authorizes the release of frozen Iranian funds, which are being moved from South Korea to Qatar and are confined to the purchase of humanitarian supplies such as food or medicine.

The agreement represents a significant milestone for the longtime foes, who remain at odds over a variety of problems, including Tehran’s rapid expansion of its nuclear program, its continued military backing for Russia, and Iran’s tough crackdown on dissidents. Though it is unknown when the two sides will complete the prisoner transfer, President Biden’s declaration comes as he and Iranian President Ebrahim Raisi prepare to go to New York for the annual United Nations General Assembly next week.

During the prisoner release talks, the US and Iran have been considering a possible informal agreement that would seek to constrain Iran’s nuclear program while avoiding an international catastrophe. However, US officials have stressed that those discussions are separate from the prisoner exchange talks.

Who are the Americans detained in Iran?

Among the American detainees held by Iran is Siamak Namazi, an Iranian American who has been imprisoned in Tehran for nearly eight years, the longest period of any American detention by the Islamic Republic. Morad Tahbaz, an Iranian American with British citizenship, and Emad Shargi, an American-Iranian dual citizen, are two others. In an initial step of the agreement, everyone was released from Iran’s notorious Evin Prison last month.

At the request of their families, two other American detainees engaged in the transfer were not named.

While the five American detainees remain in Iran, the waiver decision, first reported by the Associated Press, sets the stage for the captives’ full release, which may come as soon as next week during the high-profile United Nations meeting, according to sources familiar with the situation. They spoke on the condition of anonymity to share sensitive information.

South Korea, one of Iran’s top oil clients, has kept $6 billion in Iranian funds as a result of a Trump administration waiver provided in 2018 that allowed Seoul to continue importing Iranian oil. When the Trump administration imposed sanctions against Iran in 2019, those funds became frozen.

The new waiver, issued by Secretary of State Antony Blinken, is intended to reassure international banks that they will not face US sanctions for converting and transferring funds from Iran to Qatar in South Korea. According to the agreement, Iranian funds in Qatar’s central bank can only be used to buy commodities from approved providers of humanitarian goods and services permitted under existing sanctions.

“These funds will be moved to restricted accounts in Qatar, and the United States will have oversight over how and when these funds are used,” the State Department said in a statement released Monday. “It has long been US policy that sanctions should not prevent food, medicine, and other humanitarian goods and services from reaching ordinary people, regardless of how objectionable their governments are.”

Iran and the United States have reached an agreement to swap prisoners and liberate oil cash.

Despite these constraints, Republicans continue to oppose the agreement, claiming that unfreezing funds “create a direct incentive for America’s adversaries to conduct future hostage-taking,” according to Rep. Michael McCaul (Tex. ), the top Republican on the House Foreign Affairs Committee, in a statement issued after the administration notified Congress.

McCaul went on to say that the timing of the agreement, coming on the 16th anniversary of the death of Mahsa Amini, a 22-year-old woman who died in the custody of Iran’s morality police and sparked widespread protests, was “particularly egregious.”

Aside from its crackdown on domestic criticism last year, Iran has been chastised for supplying Russia with powerful self-detonating drones, which the Kremlin utilized in its invasion of Ukraine.

According to the State Department, the Biden administration will continue to “confront the Iranian regime’s human rights violations, destabilizing actions abroad, support for terrorism, and support for Russia’s war against Ukraine.”

Before the prisoner exchange, the Biden administration’s relationship with Tehran was characterized by deep mistrust and the failure to resurrect a nuclear deal that Biden promised to renew when he stood for president. Tehran has frequently declined to speak directly with Washington, relying on third parties to mediate talks.

According to officials familiar with the incident, Qatar played a crucial role in arranging conversations between the two parties regarding the release of the detainees and hosting the meetings. Switzerland, Oman, the United Arab Emirates, and Iraq were also involved.

European allies, who widely accept a revised deal to constrain Tehran’s nuclear program, believe that success on prisoners will pave the door for more fruitful nuclear talks.

Following Donald Trump’s decision to withdraw from the 2015 nuclear deal, Iran’s nuclear program has grown dramatically. The Obama administration created the agreement, which set stringent constraints on Iran’s program in exchange for sanctions relief.

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