U.S. Could Permit the Release of Billions in Frozen Funds to Iran as Part of Prisoner Swap

The Biden administration has repeatedly said that returning to the Iran nuclear deal is no longer its focus, amid Tehran’s violent crackdowns on protesters and support of the Russian military. That, however, doesn’t mean that sanctions relief is off the table. In fact, the White House is mulling a prisoner exchange that would include the release of $7 billion to $9 billion in Iranian funds currently frozen in South Korea by U.S. sanctions, NBC reported today:

The two sides are exploring a formula that has been discussed previously, dating to 2021, that could include a possible prisoner exchange and the release of billions of dollars in funds in South Korea banks currently blocked by U.S. sanctions, three sources with knowledge of the talks said . . .

This month, Qatari Foreign Minister Mohammed bin Abdulrahman Al-Thani met his Iranian counterpart, Hossein Amir-Abdollahian. During the meeting, the Qatari delegation “conveyed messages from the U.S. to the Iranians which included points on the prisoner release,” said a source with knowledge of the talks.

The talks are taking place indirectly, via Qatar and the United Kingdom, according to the report, which also adds context to an interview given earlier this month by the Iranian foreign minister hinting at this arrangement:

In an interview this month with NPR, the Iranian foreign minister, Amir-Abdollahian, said discussions were underway on a possible prisoner swap with third parties helping to relay messages. He said a “U.K. official” was acting as a “representative” for the U.S. in the talks.

“The representative in question was in Iran in the past weeks, and we updated the agreement that we had back in March,” he said. “We’re ready to exchange our prisoners, but there are technical steps that need to be taken by the Americans. We are awaiting the technical steps to be taken.”

The “technical steps” that Abdollahian alludes to presumably include the unfreezing of Iranian accounts.

Before last year’s protests, which all but froze the talks to jump-start the 2015 Joint Comprehensive Plan of Action, such a release of the money in South Korea was widely discussed as the first step toward reviving the agreement. The accounts in question hold an estimated $7 billion to $9 billion.

That release of U.S. hostages held by Iran would be linked to a potential deal on the South Korean bank accounts was hardly a secret. The administration’s special envoy for Iran, Robert Malley, all but said that in a tweet last September — coincidentally, the day that Mahsa Amini was murdered, setting in motion a series of events that significantly sidelined the already-stalled nuclear negotiations.

Obviously, the protests have changed a lot about Washington’s priorities with regard to Iran. But beyond one off-the-cuff comment by President Biden last fall, no one has definitively ruled out a return to a nuclear agreement in some form. And freeing the money in South Korea as part of a prisoner release was reportedly among the first steps in a longer diplomatic sequence marking the JCPOA’s revival.