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U.S. clears way for release of $6 billion in frozen Iranian funds as part of prisoner swap deal

Washington — The Biden administration has cleared the way for the eventualrelease of five American citizens detained in Iran by issuing awaiver for international banks to transfer $6 billion in frozen Iranian money from South Korea to Qatar without fear of U.S. sanctions. In addition, as part of the deal, the administration has agreed to release five Iranian citizens held in the United States.

Secretary of State Antony Blinken signed off on the sanctions waivers last week, a U.S. official told CBS News, a month after U.S. and Iranian officials said an agreement in principle was in place.

Congress was not informed of the waiver decision until Monday, according to a congressional notification obtained by The Associated Press. The U.S. official confirmed that the administration had informed Congress of the move, saying the waiver is one of the final steps before the deal can be completed.

The outlines of the swap had been previously announced and the waiver was expected. But the notification marks the first time the administration said it was releasing five Iranian prisoners as part of the deal. The prisoners have not been named.

“On September 8, Secretary Blinken undertook a procedural step in an ongoing process to ensure Iranian funds can move from one restricted account to another and remain restricted to humanitarian trade,” National Security Council spokesperson Adrienne Watson said in a statement. “As we have said from the outset, what is being pursued here is an arrangement wherein we secure the release of 5 wrongfully held Americans. This remains a sensitive and ongoing process. While this is a step in the process, no individuals have been or will be released into U.S. custody this week.We have kept Congress extensively informed from the outset of this process – long before today – and we will continue to do so, including with additional already scheduled briefings this week.”

The waiver is likely to draw criticism of President Biden from Republicans and others that the deal will boost the Iranian economy at a time when Iran poses a growing threat to U.S. troops and Mideast allies.

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

The transfer of the $6 billion was the critical element in the prisoner release deal, which saw four of the five American detainees transferred from Iranian jails into house arrest last month. The fifth detainee had already been under house arrest.

Due to numerous U.S. sanctions on foreign banks that engage in transactions aimed at benefitting Iran, several European countries had balked at participating in the transfer. Blinken’s waiver is aimed at easing their concerns about any risk of U.S. sanctions.

The American prisoners include Siamak Namazi, who was detained in 2015 and was later sentenced to 10 years in prison on internationally criticized spying charges; Emad Sharghi, a venture capitalist sentenced to 10 years; and Morad Tahbaz, a British-American conservationist of Iranian descent who was arrested in 2018 and also received a 10-year sentence. The fourth and fifth prisoners were not identified.

Sharghi’s family memberstold “Face the Nation” last month that they were holding their breath as the highly sensitive negotiations to bring the Americans home play out.

“My family and I are just on pins and needles,” his sister Neda Sharghi said. “We’re incredibly nervous about what happens next.”

Blinken outlined the parameters of the deal in the notification to Congress, writing: “To facilitate their release, the United States has committed to release five Iranian nationals currently held in the United States and to permit the transfer of approximately $6 billion in restricted Iranian funds held in [South Korea] to restricted accounts in Qatar, where the funds will be available only for humanitarian trade.”

The sanctions waiver applies to banks and other financial institutions in South Korea, Germany, Ireland, Qatar and Switzerland.

“I determine that it is in the national security interest of the United States to waive the imposition of sanctions … with respect to foreign financial institutions under the primary jurisdiction of Germany, Ireland, Qatar, the Republic of Korea, and Switzerland that are notified directly in writing by the U.S. government, to the extent necessary for such institutions to engage in transactions occurring on or after August 9, 2023,” Blinken wrote.

Sanctions waivers apply to transactions involving previously penalized entities such as the National Iranian Oil Company and Central Bank of Iran “to transfer funds from accounts in the Republic of Korea to accounts in Switzerland and Germany and from accounts in Switzerland and Germany to accounts in Qatar, and to use the transferred funds for further humanitarian transactions in accordance with written guidance from the U.S. Government,” he wrote.

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