Iran and U.S. Near Prisoner Exchange Through Qatar-Mediated Agreement.
A carefully orchestrated series of events is poised to unfold, potentially as early as next week, involving the transfer of $6 billion in previously frozen Iranian funds to banks in Qatar.
This development is expected to set in motion a meticulously negotiated prisoner exchange agreement between Iran and the United States, resulting in the release of detained U.S. dual nationals from Iran and the return of Iranian prisoners held in the U.S. The Gulf state of Qatar has mediated this complex diplomatic endeavour and represents a significant breakthrough in relations between Iran and the United States.
According to information obtained from eight sources familiar with the negotiations, the exchange will begin with the release of as many as five detained U.S. dual nationals currently held in Iran.
Iran released four U.S. citizens from Tehran’s Evin prison on August 10 to initiate this process, placing them under house arrest. A fifth individual was already under house arrest. U.S. Secretary of State Antony Blinken characterized this move as the initial step in a broader process leading to their eventual return home.
Among the individuals released are businessmen Siamak Namazi, aged 51, and Emad Sharqi, aged 59, along with environmentalist Morad Tahbaz, aged 67, who also holds British nationality.
As for the identities of the fourth and fifth Americans released, one of them is reportedly a woman, but their names remain undisclosed. It’s worth noting that details about which Iranian prisoners held in the U.S. would be part of the exchange have not been disclosed either.
The pivotal role in mediating this intricate deal between two longstanding adversaries, often characterized by hatred, is played by Qatar’s small yet immensely wealthy state.
Doha hosted a total of at least eight rounds of negotiations, involving Iranian and U.S. negotiators who were kept in separate hotels. Communication was facilitated through shuttle diplomacy, with earlier sessions primarily addressing the contentious nuclear issue and later ones focusing on the prisoner releases.
Under the agreement, Qatar will oversee a financial arrangement to cover banking fees and monitor how Iran utilizes the unfrozen funds. This oversight aims to ensure that none of the money is spent on items subject to U.S. sanctions. When the prisoner exchange takes place, the detainees will transit through Qatar.
“Iran initially wanted direct access to the funds but in the end agreed to having access via Qatar,” explained a senior diplomat. “Iran will purchase food and medicine, and Qatar will pay directly.”
This detailed account of the negotiations sheds light on the extent of Qatar’s mediation efforts, the unfolding of the deal, and the urgency that motivated both parties to reach an agreement. Reuters conducted interviews with four Iranian officials, two U.S. sources, a senior Western diplomat, a Gulf government adviser, and a person familiar with the negotiations to compile this information.
Due to the sensitivity of the ongoing negotiations and the fact that the deal has not been fully implemented, all of these sources requested anonymity. The U.S. State Department also refrained from announcing the precise timing of the prisoner release, citing the negotiation’s ongoing and highly sensitive nature.
In summary, Qatar’s mediation has played a pivotal role in facilitating a potentially groundbreaking prisoner exchange between Iran and the United States, involving the release of detained dual nationals and Iranian prisoners held in the U.S. The careful choreography of this agreement marks a significant development in the fraught relationship between these two nations, potentially opening the door to further diplomatic initiatives.
The timing of the transfer of $6 billion in Iranian funds has yet to be officially commented upon by the U.S. administration. Nevertheless, South Korean Foreign Minister Park Jin indicated on September 5 that efforts were underway to facilitate the transfer of Iran’s funds.
A State Department spokesperson emphasized that the U.S.-Iran relationship lacks trust and that they evaluate Iran based solely on its actions. The spokesperson clarified that while Washington approved the movement of Iranian funds from South Korea to restricted accounts held by financial institutions in Qatar, no funds would be sent directly to Iran.
Qatar’s Ministry of Foreign Affairs did not respond to Reuters’ requests for details on the negotiations, Qatar’s role in the talks, or the terms of the final agreement. Similarly, Iran’s foreign ministry and its U.N. mission have yet to respond to detailed questions regarding this story.
This account of the negotiation process reveals how the deal bypassed the core U.S.-Iran disagreement over Iran’s nuclear objectives. Instead, it culminated in a rare moment of cooperation between the longstanding adversaries, who have been at odds on many issues, from Iran’s nuclear program to the U.S. military presence in the Gulf.
Tensions between the U.S. and Iran escalated significantly after Donald Trump withdrew from the nuclear deal with Iran during his tenure as U.S. president in 2018. Subsequent attempts to reach a new nuclear agreement made limited progress as President Joe Biden faced the upcoming 2024 U.S. election.
The State Department spokesperson emphasized that Washington’s overall approach to Iran remains unchanged, focusing on deterrence, pressure, and diplomacy.
Once the funds are transferred, they will be held in restricted accounts in Qatar, and the U.S. will have oversight regarding the use of these funds and their timing, according to the State Department spokesperson.
The potential transfer of funds has sparked criticism from Republicans who argue that President Biden is effectively paying a ransom for U.S. citizens. However, Secretary of State Antony Blinken asserted on August 10 that the deal does not imply sanctions relief for Iran.
He stated that Washington would continue to oppose Iran’s destabilizing activities in the region firmly.
The mediation led by Qatar gained momentum in June 2023, according to a source familiar with the discussions. At least eight rounds of talks took place between March 2022 and the time of the source’s briefing. The initial rounds predominantly addressed the nuclear issue, while the later ones shifted the focus toward prisoner releases.
“They all realized that nuclear negotiation is a dead end and shifted focus to prisoners. Prisoners are simpler. They’re easy to get, and you can build trust,” the source explained. “This is when things got serious again.”
According to Iranian, diplomatic, and regional sources, once the funds arrive in Qatar from South Korea via Switzerland, Qatari officials will instruct Tehran and Washington to proceed with the prisoner releases as outlined in a document signed by both sides and Qatar in late July or early August. Reuters has not had access to this document.
The transfer of funds to banks in Qatar is anticipated to conclude as early as next week if all goes according to plan, according to the source familiar with the talks. Reuters was unable to identify the banks involved.
“The American prisoners will fly to Qatar from Tehran, and Iranian prisoners will fly from the U.S. to Qatar, and then be transferred to Iran,” the source informed Reuters.
According to two Iranian insiders, the source familiar with the talks, and a senior Western diplomat, the most complex aspect of the negotiations was devising a mechanism to ensure transparency in the funds transfer and adherence to U.S. sanctions.
The $6 billion in Iranian assets, which are the proceeds of oil sales, had been frozen due to extensive U.S. oil and financial sanctions against Iran. These sanctions were reinstated by President Trump in 2018 when the U.S. withdrew from the nuclear deal that had constrained Iran’s nuclear program.
Discussions encompassed ensuring that Iran exclusively utilized the funds for humanitarian purposes and securing guarantees from Qatar regarding its oversight of the process.
“To salvage the negotiations from collapse, Qatar pledged to cover the banking fees for the funds’ transfer from Seoul to Switzerland, and subsequently to Qatari banks, while also taking on the responsibility of expense oversight,” an Iranian insider familiar with the talks told Reuters.
The central bank governors of Iran and Qatar convened in Doha on June 14 to discuss the funds transfer, according to a second Iranian insider and the source familiar with the talks. Both the Central Bank of Iran and the Qatar central bank declined to comment.
U.S. Special Envoy for Iran Robert Malley, who is currently on unpaid leave due to a security clearance review, led the talks, along with U.S. Deputy Special Envoy Abram Paley and Iran’s chief nuclear negotiator, Ali Bagheri Kani. This information was provided by one Iranian official, two sources knowledgeable about the negotiations, and the Western diplomat.
Mehdi Safari, Iran’s deputy foreign minister for economic affairs, participated in the negotiations on the funds transfer during two meetings in Qatar, as stated by one senior Iranian diplomat. The intermediary mediator was Mohammed Al-Khulaifi, Qatar’s Minister of State at the Foreign Ministry.
Malley declined to comment, and Paley, Kani, and Al-Khulaifi were unavailable for direct comment.
