State Department defends unfreezing $6bn for Iran prisoner swap

Republicans have criticised the Biden administration’s decision to issue waiver for $6 billion being held in South Korea

An Iranian woman walks past an anti-US mural near the former American embassy in Tehran. EPA

The US State Department on Tuesday defended its decision to issue a waiver allowing international banks to transfer $6 billion in frozen Iranian funds from South Korea to Qatar.

The move is expected to pave the way for a prisoner exchange between the US and Iran that will allow five American citizens to be released from detention in exchange for five Iranian prisoners.

The waiver means that European, Middle Eastern and Asian banks will not run afoul of US sanctions in converting the money frozen in South Korea and transferring it to Qatar’s central bank. The funds will be held in Qatar for Iran to use for the purchase of humanitarian goods, the State Department said.

“The facts of this arrangement are, when this money arrives in these accounts in Qatar, it will be held there under strict oversight by the United States Treasury Department,” State Department spokesman Matthew Miller said.

“The money can only be used for humanitarian purposes and we will remain vigilant in watching the spending of those funds and have the ability to freeze them again if we need to.”

Republican leaders have criticised the State Department’s decision to issue the waiver.

“I remain deeply concerned that the administration’s decision to waive sanctions to facilitate the transfer of $6 billion in funds for Iran, the world’s top state sponsor of terrorism, creates a direct incentive for America’s adversaries to conduct future hostage-taking,” Michael McCaul, chairman of the House Foreign Affairs Committee, said in a statement.

Mr McCaul added that “the administration is demonstrating weakness that only further endangers Americans and freedom-loving people around the world”.

Among the Americans to be freed are Siamak Namazi, Emad Shargi and Morad Tahbaz. The identities of the other two Americans have not been disclosed.

Mr Namazi, an Iranian-American businessman, has been held in Tehran since October 2015 on espionage charges. The 51 year-old’s father, Baquer Namazi, who travelled to Iran to help enable his son’s release, was detained in 2016 for more than six years.

Mr Shargi, also a businessman, has been held in Iran on espionage charges since October 2016. The US described the charges against him as “bogus”.

Mr Tahbaz, who also holds British citizenship, is an environmentalist and conservationist who has been held by Iran since January 2018. Iran accused him and seven other conservationists of collecting classified material about strategic areas under the guise of environmental work.

All three were recently moved from Tehran's Evin prison to house arrest as part of the initial steps in the negotiations between Washington and Tehran.