Despite this agreement, the relationship between the US and Iran is trending toward heightened hostility
The United States and Iran share a lengthy history of antagonistic relations, characterized by ongoing conflicts. Both nations have employed diverse tactics to exert pressure on one another. Meanwhile, in a recent development, Washington and Tehran have reached a potential agreement this week. According to this accord, the United States will return numerous billions of dollars worth of Iranian assets that were seized. Additionally, both countries have agreed to a simultaneous exchange of prisoners.
This agreement was officially announced last Thursday. Prior to this announcement, the two nations had engaged in discussions through intermediaries for several months. Recently, four US detainees were released from incarceration in Iran and placed under house arrest. Another American was already under house arrest as imposed by Tehran. Simultaneously, a number of Iranians held in confinement in the United States are also being released, although the exact count remains undisclosed.
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The funds confiscated from Iran and held by the US will be transferred to Qatar via a South Korean bank. Nonetheless, the precise details of this transaction are not yet disclosed. Meanwhile, the exact timeline for the complete release of the five Americans currently under house arrest in Iran remains uncertain. Despite this, both US and Iranian officials express confidence that the stipulated terms of the agreement will be fulfilled by the mid to late September timeframe.
What’s in the deal?
Before 2019, South Korea had procured fuel oil from Iran, yet the payment for this transaction was left unresolved. Following a subsequent development in 2019, the funds became unattainable due to a transaction ban imposed by the then-President of the United States, Donald Trump. Presently, this is the money that Washington is currently granting authorization for, to be returned to Iran as a pivotal element of the agreement. The outstanding funds owed to Iran will undergo a conversion process from the South Korean currency, the won, to euros within South Korea. Following this conversion, the funds will be forwarded to Qatar. Qatar has taken on the role of a mediator in the Iran-US deal. Depending on the prevailing currency exchange rate, the amount in question could range between 600 and 700 million dollars.
The United States has set forth certain conditions in this arrangement. For instance, the returned funds can exclusively be utilized for the acquisition and trade of humanitarian goods such as medicine and food. While numerous individuals in Iran assert that the agreement stipulates the money’s return to Iran, the United States has clarified that Tehran will not have complete autonomy over these funds.
Notably, Qatar has refrained from commenting on the mechanisms by which it will oversee Iran’s adherence to the United States’ conditions for spending the repatriated funds.
In reciprocation, Tehran will release five Iranian-born Americans who are currently under surveillance at a hotel in Tehran, as indicated by a US lawyer representing their interests.
South Korea’s Approach to Return Seized Funds Amid Economic Concerns
Iran is reluctant to return the seized funds in South Korean currency due to its limited exchangeability compared to the US dollar or the euro. US officials have indicated that South Korea does not oppose returning the funds to Iran. However, there is concern among the country’s policymakers that converting this substantial amount of won (equivalent to 600 to 700 million dollars) into other currencies could impact the South Korean economy.
This cautious approach is the reason behind South Korea’s gradual release of the seized funds, which are being routed to Qatar’s central bank. Given the existing US sanctions on Iran, it is essential to ensure that this transaction remains outside the scope of sanctions. Hence, intricate and time-consuming procedures involving a third-party country like Qatar have been put in place for the fund transfer.
In relation to this matter, John Kirby, the spokesperson for the United States National Security Council, remarked, “We have collaborated closely with South Korea on this issue. Currently, there are no hindrances to transferring the funds through a Qatari bank.”
Who are the US prisoners?
Three out of the five Iranian-born Americans marked for release by Tehran have been named, leaving the identities of the remaining two undisclosed. Neither the US nor Iran has consented to disclose their names.
Siamak Namazi is the initial among those who have been identified; he was seized in 2015 and subsequently sentenced to a 10-year prison term on espionage charges, which drew international criticism. Imad Sharghi is another recognized individual, facing a 10-year sentence, followed by Morad Tahbaz, who similarly received a 10-year sentence after his arrest in 2018.
Advocates representing the impending release assert the innocence of these individuals, arguing that their imprisonment has been unjust. Since Iran’s Islamic revolution in 1979, Tehran has consistently employed such detainees as negotiating tools with Western nations across a range of issues.
Why deal now?
In 2015, six countries, including the United States, entered into a nuclear agreement with Iran. However, in 2018, the then President of the United States, Donald Trump, withdrew from the agreement. Subsequently, Washington imposed multiple sanctions on Tehran, placing significant pressure on the country’s economy. If the currently seized funds in South Korea are returned, it could substantially bolster Iran’s economy
Meanwhile, the current US President, Joe Biden, aims to reinstate Iran in the nuclear deal. Last year, some of the signatories to the agreement extended an offer to Iran for reentry. Nevertheless, Tehran declined the proposal. The US Congress is still deliberating the matter of reintegrating Iran into the deal.
The return of the seized funds to Iran is equally momentous. Former US Vice President Mike Pence, Republican member of the Senate Foreign Relations Committee Jim Risch, and former Secretary of State Mike Pompeo have all likened the transaction to a ransom. According to their perspective, due to the actions of the Biden administration, Iran might be incentivized to detain more individuals.
Tension between US and Iran
US-Iranian relations have already reached rock bottom due to the nuclear deal and Tehran’s pursuit of a nuclear bomb. Since 2019, Iran has been held responsible for a series of attacks and ship seizures in the Middle East.
Consequently, the Pentagon is contemplating deploying US troops to safeguard commercial ships in the Strait of Hormuz, a crucial route for transporting a significant amount of fuel oil from the Persian Gulf.
In the meantime, Iran has grown closer to Russia amidst the Ukraine war, as Tehran is providing Moscow with drones to conduct attacks on Ukraine. Washington stands by Kiev in this conflict. Overall, the relationship between the US and Iran is trending towards heightened hostility.