Biden set to provide $6B for Iran’s prisoner swap.

Unfrozen Iranian Funds to Trigger‌ Prisoner ‍Swap

When $6 billion ‍of unfrozen Iranian funds are wired to banks in Qatar as early as next⁢ week, ‍it ⁢will trigger a carefully ‌choreographed sequence that ‌will see ⁤as many as five ⁣detained U.S. dual nationals ‍leave⁢ Iran⁣ and a similar number of Iranian prisoners held in ⁤the U.S. fly ⁤home, according to eight Iranian ⁣and other sources familiar with the negotiations who spoke to Reuters.

First Steps ‌Towards Freedom

As ​a⁢ first step, Iran on Aug. ⁣10 released four U.S. citizens from Tehran’s Evin prison into house arrest, where ‍they joined a fifth, who was already under house arrest. Later that day U.S. secretary of state⁢ Antony‌ Blinken called the move the first step of a process that ⁤would lead to their return home.

They include businessmen Siamak Namazi, ‌51, ‌and Emad Sharqi, 59, as⁣ well⁣ as environmentalist Morad Tahbaz,‍ 67, who also holds British nationality, the U.S. administration has said. ‌The Tahbaz and‍ Shargi families did not⁤ respond⁢ to requests for⁣ comment. A lawyer for the Namazi family declined to comment.

The identities of the fourth and fifth Americans, one of whom according to two ⁤sources is a woman, have not been disclosed. Reuters couldn’t ⁤establish which Iranian prisoners, ⁣in turn, ‍would be swapped by the United States.

Iran said ‌on ⁤Monday it was optimistic the‌ prisoner swap with Washington‌ would⁣ happen⁢ “in ⁤the⁢ near future”.

The Role of Qatar

At the centre of the negotiations⁤ that forged this​ deal between the superpower which Iran brands​ the “Great Satan” and the Islamic Republic which Washington calls a state sponsor of​ terrorism is⁢ the tiny but hugely rich state of ‌Qatar.

Doha hosted at least eight rounds of talks involving Iranian and U.S. negotiators sitting in separate hotels speaking via shuttle diplomacy, a source briefed on the ‌discussions said, with the earlier sessions ​focused mainly on the thorny nuclear issue and ‌the ‌later ones on the prisoner releases.

Doha will implement a ⁢financial arrangement under which ⁢it will pay ⁢banking fees and monitor how Iran spends the unfrozen‌ cash to ensure no money is⁣ spent on items under​ U.S. ‍sanctions, and the prisoners will transit Qatar when they are ​swapped, according to three of the sources.

“Iran initially wanted direct access​ to the funds but in the ⁤end agreed to having access‍ via Qatar,” said a senior diplomat. “Iran will purchase food⁣ and medicine and Qatar will pay⁢ directly.”

Reuters pieced together this account of previously unreported details about the extent of Qatari mediation of the‌ secret talks, how the deal unfolded and the expediency that motivated ‌both⁢ parties ‍to clinch the prisoner swap deal. Reuters‍ interviewed four Iranian officials, two U.S.‌ sources, a senior Western diplomat,‌ a‌ Gulf government adviser and the person familiar with the⁢ negotiations.

All of the sources requested anonymity because ⁤of‌ the sensitivity of a deal ⁣which hasn’t ‌been fully implemented.

Continued Diplomatic‌ Efforts

A State⁢ Department spokesperson said the U.S. was not ready to announce the exact timing of the​ prisoner release.⁤ The⁤ Department‍ also declined to discuss the details of what the spokesperson termed “an ongoing and‌ highly sensitive negotiation.”

The U.S. administration has not commented on the timing of the funds transfer.‌ However, on Sept 5, ⁣South Korean foreign⁣ minister Park Jin said efforts were under way to transfer Iran’s funds.

“The⁣ U.S.-Iran relationship⁢ is not one​ characterized ⁢by trust. We judge Iran ⁢by ​its⁣ actions,⁣ nothing else,” the State ‌Department spokesperson​ added.

Ensuring Transparency‌ and Compliance

Once ‌the funds are‌ transferred, they will be held in restricted ⁣accounts in Qatar, and‍ the U.S.⁢ will have ⁤oversight as ​to how and ‍when ⁤these funds are ⁢used, the State ⁣Department ⁣spokesperson added.

The potential transfer has drawn Republican criticism that Biden,⁢ a Democrat, is in effect paying ransom for ‍U.S. citizens. But Blinken told reporters on Aug 10 the deal does not⁢ mean that Iran would be⁢ getting any sanctions relief, explaining that Washington would ⁣continue to push⁣ back “resolutely against Iran’s‌ destabilizing activities in the region”.

Qatari-Led Mediation

The Qatari-led mediation gained momentum in June 2023, said the source briefed on the discussions,​ adding‌ at least⁣ eight rounds of talks‌ were held since March 2022, with earlier rounds devoted mainly​ to‌ the nuclear issue and later ones to prisoners.

“They ⁤all realized that nuclear (negotiation) is⁣ a dead end and shifted⁣ focus to prisoners. Prisoners is more simple. It’s easy to get and you can‌ build‍ trust,” he​ said. ⁣”This is when ​things got serious again.”

Prisoners ‌Expected to Transit Qatar

The Iranian, diplomatic and regional sources⁢ said that once the money reaches Qatar from South Korea via ‍Switzerland, Qatari‍ officials will ⁢instruct Tehran and Washington ‌to​ proceed with the releases under the terms of a document signed⁤ by both sides⁤ and Qatar‌ in late July ​or early ‌August. ​Reuters has not seen ‌the document.

The transfer‌ to ⁤banks in ‌Qatar is expected to​ conclude ⁢as early as next week if all goes to plan,‌ the source ‌briefed on the talks‍ said. Reuters ⁢was unable to identify the banks ⁤involved.

“American‍ prisoners will⁤ fly⁣ to Qatar from Tehran⁢ and Iranian prisoners will fly from the U.S. to Qatar, and⁤ then be transferred ‌to Iran,” the source ⁣briefed⁤ on the talks ⁣told Reuters.

According to two Iranian insiders, the source briefed on the negotiations and​ the senior Western diplomat, the talks’ most complex part​ was ⁣arranging a mechanism to ensure transparency in the money transfer and respect for U.S. ⁣sanctions. ⁤The ‍$6 billion in Iranian‌ assets—the⁢ proceeds of ‌oil ​sales—were frozen ‌under sweeping ⁣U.S. oil and financial sanctions against Iran. ⁣Then president Trump in‍ 2018 reimposed the sanctions when he⁢ pulled Washington ‌out of a deal under which Iran had restricted its nuclear program.

Issues discussed included how ⁤to⁣ ensure Iran only spent the money on ⁣humanitarian ⁢goods and securing guarantees ⁢from Qatar on its monitoring⁢ of the process.

“To salvage⁣ the negotiations from collapse, Qatar pledged to cover the ⁤banking fees for the ‌funds’ transfer from Seoul to Switzerland, and subsequently to Qatari banks,⁢ while also taking on the responsibility of expense oversight,” an Iranian insider briefed about⁣ the ​talks told Reuters.

The central bank ‌governors of Iran and Qatar met⁢ in Doha on ‌June 14 to discuss ‍the funds transfer, a second Iranian⁣ insider and the source ‌briefed on the talks said.

The Central ⁤Bank of ‍Iran and the Qatar central bank declined to comment.

The talks were led by U.S. Special Envoy for ‌Iran Robert Malley—now on unpaid ⁤leave ‍because his​ security clearance is under review—and by U.S. Deputy Special Envoy Abram ‍Paley and Iran’s​ chief nuclear negotiator, Ali Bagheri Kani, said one Iranian official, two sources ⁢briefed on the negotiations, and the Western diplomat.

Mehdi Safari, Iran’s⁢ deputy foreign minister for economic affairs, joined the Iranian delegation⁤ at two meetings in Qatar for talks on ⁣the funds transfer, one senior ⁤Iranian diplomat told Reuters. Qatari minister of state at the Foreign Ministry Mohammed Al-Khulaifi was the⁤ go-between mediator.

Malley declined to comment. Paley,‍ Kani and Al ⁤Khulaifi could not be reached directly ⁢for comment.

(Additional⁤ reporting by Laila Bassam ⁣in Beirut and Washington bureau; writing by Samia Nakhoul; editing ‌by William Maclean)

Published under: Iran