US and Iran Agree on Prisoner Swap, Unfreezing $16 Billion in Iranian Funds

The US and Iran agreed on a prisoner swap and extended a Trump-era waiver, unfreezing $16 billion in Iranian funds held in Qatar and Oman. The funds, Iran's own assets, can only be used for humanitarian purposes and remain largely unspent as of December.

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Bijay Laxmi
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US and Iran Agree on Prisoner Swap, Unfreezing $16 Billion in Iranian Funds

US and Iran Agree on Prisoner Swap, Unfreezing $16 Billion in Iranian Funds

The United States and Iran have reached an agreement involving a prisoner swap and the extension of a Trump-era waiver, resulting in the unfreezing of $16 billion in Iranian funds held in accounts in Qatar and Oman. The deal has sparked false claims on social media that President Joe Biden gave $16 billion to Iran, distorting the sources and intended use of the money.

Why this matters: This development has significant implications for the relationship between the US and Iran, as it demonstrates a willingness to engage in diplomatic efforts to resolve long-standing issues. The unfreezing of Iranian funds could also have a positive impact on the Iranian economy and potentially lead to further cooperation on other issues.

Under the agreement, the $16 billion in previously frozen Iranian assets can only be used for humanitarian purposes. The funds are not a gift from the US to Iran but rather Iran's own money that had been frozen in foreign banks due to earlier sanctions. As of December, no Iranian money held in Qatar had been spent, and there were only two transactions from thefunds in Oman, with undisclosed amounts.

The prisoner swap agreement in September saw the US and Iran exchanging prisoners, with five Americans released from Iranian jails and clemency granted to five Iranians who had been charged or convicted in the US. The deal also unfroze $6 billion in Iranian assets, which was Iranian money held in South Korean banks from South Korea's purchases of Iranian energy products.

The Trump administration had reinstated sanctions on Iran in 2018, including a partial ban on oil exports and a total ban in 2019. In October 2019, the administration made the money in those accounts available to Iran for limited humanitarian purposes, although the banks didn't use that accommodation much due to increasedreporting requirements. The prisoner swap deal in September moved the money from South Korea to Qatar, although it is available only for humanitarian purposes.

Heather Williams, a senior policy researcher at RAND, stated, "People often try to portray this issue in a way that gives the impression that America is giving funds to Iran." Abram Paley, the State Department's deputy special envoy for Iran, emphasized, "Not a penny of this money has been spent, and these funds will not go anywhere anytime soon."

The US-Iran agreement has led to the unfreezing of $16 billion in Iranian funds, which can only be used for humanitarian purposes. Despite false claims circulating on social media, the money is not a gift from the US to Iran but rather Iran's own assets that had been frozen due to earlier sanctions. Theprisoner swap dealand extension of the Trump-era waiver have facilitated this development, although the funds remain largely unspent as of December.