US, Qatar Agree To Stop Iran From Accessing $6 Billion Fund After Bipartisan Pressure On Biden

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by Tyler Durden
Thursday, Oct 12, 2023 - 03:57 PM

Update (12:00pm ET):

US officials and the Qatari government have agreed to stop Iran from accessing a $6 billion account for humanitarian assistance in light of Hamas’s attack on Israel, Deputy Treasury Secretary Wally Adeyemo told House Democrats on Thursday, the WaPo reported citing the usual "two people who spoke on the condition of anonymity to describe the private remarks."

As Punchbowl first reported, Adeyemo told House Democrats that the money “isn’t going anywhere anytime soon.”

The decision not to permit access to the money comes just a few weeks after the U.S. and Iranian governments announced a deal to set up the humanitarian assistance as part of a prisoner swap aimed at easing hostilities in the region. U.S. officials had to approve each transaction under the agreement. The fund is financed by Iranian oil sales.

But President Biden has faced mounting bipartisan pressure on Capitol Hill to prevent the funds from being used by Iran, amid scrutiny of Tehran’s links to Hamas.

As the WaPo correctly notes, "rescinding the aid would embolden hard-line voices in Iran that have rejected working with the West, said Trita Parsi, executive vice president of the Quincy Institute for Responsible Statecraft, a foreign policy think tank. Parsi also speculated that such a move could shift opinion within the regime in favor of building a nuclear bomb."

“If this step is taken, that status quo falls apart — and it will have a very detrimental effect on the internal discussions in Iran, within the regime,” Parsi said. “If there is no prospect of a deal with the U.S., it will likely tilt Iran toward building a bomb — and that would be an extremely dangerous situation.”

Iran’s supreme leader, Ayatollah Ali Khamenei, has declared nuclear weapons forbidden by Islam and has vowed that Iran will never seek to build or acquire them.

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Following this weekend’s attack by Hamas on Israel, the United States could re-freeze at any time the $6 billion for humanitarian purposes to Iran which was part of a prisoner swap last month, Bloomberg reports.

In September, five Americans imprisoned in Iran were officially flown out of Tehran as the U.S. unfroze some $6 billion in Iranian oil funds held for five years. The prisoner swap deal also included the release of five Iranian prisoners being held by Americans, two of whom plan to stay in the U.S.

The deal between Washington and Tehran reached in August pledged to give Tehran access to nearly $6 billion in frozen oil revenues on the condition that the funds be used for humanitarian purposes.

However, the U.S. Administration is now weighing the option to freeze those funds again, although there has been no official blaming of Iran for any role in the Hamas attack, yet.

Intelligence agencies haven’t found yet hard evidence that Iran was behind the attack, but they believe Iranian officials knew of a plot by Hamas to carry out some action in Israel, an anonymous U.S. official told Bloomberg on Wednesday.

Commenting on the $6 billion funds to Iran, John Kirby, National Security Council coordinator for strategic communications at the White House, told MSNBC this week “That money can be frozen at any time. We can stop any transaction.”

“None of it has been allocated. None of it has been spent. So it’s all still sitting in a Qatari bank, and that is an option that’s available to us,” Kirby added.

U.S. Treasury Secretary Janet Yellen said on Wednesday, referring to the $6 billion, “I wouldn't take anything off the table in terms of future possible actions.”