US, Qatar Agree To Withold $6 Billion Iranian Funds Released For Prisoner Swap After Hamas Attack On Israel: Reports

Following the attack by Hamas on Israel that killed at least 1,300, the United States and Qatar have agreed to deny Iran access to $6 billion that were unfrozen as part of a prisoner swap deal, according to reports. 

Last month, the United States and Iran swapped prisoners. Iran released five US nationals held in the country and the United States also released five Iranians. As part of the deal, the United States also released $6 billion-worth of Iranian funds kept in South Korean banks. The deal involved transfer of that amount to a bank in Qatar from where Iran could access those funds for humanitarian purposes. 

The decision as part of the prisoner swap to make the funds accessible to Iran has come under criticism, particularly from the Republican Party, after the Hamas attack on Israel. Hamas has long been backed by Iran and it has been argued that once these funds became accessible to Iran, it was bolstered as its other funds were freed to be used against its adversaries like Israel. 

The New York Times reported that there was no formal agreement as such on blocking the funds but there was a "quiet understanding" between the United States and Qatar to disallow Iran from accessing the funds for now. 

"Wally Adeyemo, the deputy Treasury secretary, told House Democrats on Thursday that Iran would no longer have access to the funds, according to a person familiar with the matter...U.S. officials did not describe the money as frozen permanently but said that case-by-case applications to spend it under the current arrangement will be denied for the foreseeable future," reported NYT. 

As per the terms of the deal, these funds could only be used after furnishing bills for humanitarian purchases, such as of food and medicine. Even in such cases, however, critics have said that it would mean that the funds that would have gone for food or medicine purchases previously have now been freed up for nefarious purposes, such as to be used against Israel. 

So far, however, the entire sum of $6 billion sits untouched in a bank in Qatar. It has also been pointed that the Joe Biden administration did not 'give' this money to Iran as it was Iranian money which was sitting in a South Korean bank and Iran was not able to access it because of sanctions. It is not US money. 

Explaining the transfer of these funds, Jennifer Griffen of Fox News wrote that the US Department of Treasury would need to approve any Iranian request to access those funds after it is provided with verifiable bills for humanitarian purchases. In a series of tweets, she wrote that the Biden administration's action was an extension of decision taken during former President Donald Trump's term.

She said, "This was Iranian money that even the Trump administration had agreed could be used by Iran for humanitarian reasons as long as those purchases for food and medicine were verified. The release of this money as part of the recent Biden admin hostage deal was not to Iran. So politicians who are saying this $6 billion somehow may have been transferred to Iran for use in this Hamas invasion are wrong. There is no evidence any of that $6 billion has left the Qatari account as of yet, according to US officials who served both administrations."

The New York Times reported that the action, even if temporary, would certainly "infuriate Iran’s leadership after a painstaking prisoner swap that took many months to construct and weeks more to complete".

Iran is now considered to be closest to developing a nuclear weapon and the Biden administration also wishes to revive talks with Iran to revive the nuclear deal that the previous Trump administration junked. The idea is that Iran could be convinced to give up the nuclear weapons programme in lieu of economic concessions. 

The NYT reported, "In recent months Mr. Biden has tried to de-escalate tensions with Tehran after efforts to restore the 2015 Iran nuclear deal, from which President Donald J. Trump withdrew, came up short. Iran’s rapid acceleration of its nuclear program in the following years prompted fears of potential U.S. or Israeli military strikes in response.

"The prisoner deal came as Biden officials sought to reach other understandings with Iran to avoid conflict, including an agreement not to impose new nuclear sanctions so long as Tehran limited its enrichment of uranium that could be used for a nuclear weapon, according to U.S. and Iranian officials."