Hamas-Israel Clash and the Unspent $6 Billion
Hamas, the Palestinian group, initiated a surprise attack on Israel last Saturday, prompting a swift retaliation from Israel. Unfortunately, this exchange of hostilities has resulted in the tragic loss of over 1,100 lives, drawing global attention to the Iran-backed Islamist group's involvement in the conflict.
U.S. Secretary of State Antony Blinken provided insights on Sunday, revealing that Iran has yet to utilize any of the $6 billion that became accessible following a U.S.-Iran prisoner exchange in September. He clarified that while there is a longstanding relationship between Iran and militant groups, there is no conclusive evidence implicating Iran in this particular attack.
To better understand the context, it's important to revisit the Iran prisoner swap deal approved by President Joe Biden in August. This intricate agreement allowed for the release of five U.S. citizens detained in Iran in exchange for the transfer of $6 billion in Iranian funds that had been frozen in South Korean banks. Simultaneously, five Iranians held in the United States were permitted to leave.
The $6 billion in question represented Iranian funds that had been frozen in South Korean banks due to the comprehensive sanctions imposed by the U.S. under former President Donald Trump in 2019. These sanctions encompassed a ban on Iranian oil exports and restrictions on its banking sector, effectively blocking Iranian oil revenues in Seoul.
As of now, these funds have not been returned to Iran. Instead, they are being overseen by Qatar's central bank and remain in Doha. Secretary Blinken emphasized that no U.S. taxpayer dollars were involved in this financial transaction. Rather, it consisted of Iranian resources that had accumulated from oil sales, which had become stranded in a South Korean bank.
The terms of the Iran prisoner deal stipulate that the funds can exclusively be used for humanitarian-related purposes, such as purchasing food and other essential goods outside Iran for importation. U.S. officials have underscored that these funds cannot be channeled back to Iran for any other purpose.
Brian Nelson, the U.S. Treasury's undersecretary for terrorism and finance, emphasized, "All of the money held in restricted accounts in Doha as part of the arrangement to secure the release of five Americans in September remains in Doha. Not a penny has been spent. These restricted funds cannot go to Iran — it can only be used for future humanitarian-related purposes. Any suggestion to the contrary is false and misleading."
Due to stringent due diligence requirements tied to the prisoner exchange, Iran's ability to access and utilize these funds will take several months. Moreover, it is essential to reiterate that the money can solely be directed towards humanitarian aid, including food, medicine, medical devices, and agricultural products for the benefit of the Iranian people.
Critics of the deal, primarily within the Republican party, have attempted to link President Biden's Iran policy to the recent attacks, erroneously suggesting that he or U.S. taxpayers supported these attacks on Israel. Their argument revolves around the belief that granting Iran access to these funds improves its financial position, potentially enabling them to allocate more resources to other endeavors. However, this assertion is disputed by U.S. officials who stress the strict limitations on the use of these funds and their exclusive dedication to humanitarian purposes.