September 23, 2022 | Flash Brief

U.S. May Allow Payment to Iran for Hostages

September 23, 2022 | Flash Brief

U.S. May Allow Payment to Iran for Hostages

The Biden administration may be preparing to issue a national security waiver authorizing the transfer of $7 billion to Iran from South Korean-based accounts subject to U.S. terrorism sanctions. The transfer would proceed in exchange for the release of U.S. hostages and would reportedly be the first step in a multi-phased nuclear deal with Iran. However, the payment may occur prior to the accord’s announcement in order to evade legal prohibitions on suspending Iran sanctions prior to congressional review of a nuclear agreement. Transferring $7 billion to Iran in exchange for U.S. hostages would be a significant change in U.S. policy, which prohibits paying for hostages, and would ignore requests by Gold Star Families to compel Tehran to pay federal terrorism judgments prior to the release of funds.

Expert Analysis

“Paying for hostages is a dangerous policy that incentivizes the kidnapping of American citizens. This is also a slap in the face to Gold Star Families who asked President Biden not to release any funds until all terror judgments are paid. Congress should not allow the administration to circumvent the law by releasing billions in funds tied to terrorism sanctions prior to congressional review of the broader nuclear deal.” – Richard Goldberg, FDD Senior Advisor

U.S. and South Korea Coordinating on Iran Deal, Hostages

Following a meeting last week between U.S. Special Envoy for Iran Rob Malley and South Korea’s First Vice Foreign Minister, Malley tweeted, “We thank the Republic of Korea for their close partnership, including their efforts to help ensure the return of our wrongfully detained citizens in Iran and to reach a deal on JCPOA.” Malley’s tweet apparently links the potential release of $7 billion held in South Korea to the broader nuclear deal negotiations. In late August, leaked details of the nuclear agreement revealed that the release of $7 billion from South Korea would be the first step taken in a new nuclear deal’s sequencing.

Evasion of Iran Nuclear Agreement Review Act

 A presidential national security waiver would likely be necessary to facilitate the transfer of funds from South Korea to Iran. The Iran Nuclear Agreement Review Act (INARA), however, explicitly restricts the president from waiving statutory sanctions as part of a nuclear agreement with Iran for 30 days — giving Congress time to review and potentially reject the deal. By ostensibly tying the $7 billion to the release of prisoners and issuing a waiver prior to announcing a nuclear deal, the administration may intend to provide Iran upfront sanctions relief that would otherwise be in violation of INARA.

A Dangerous Precedent of Paying for Hostages 

Even if the $7 billion release of funds to Iran were truly disconnected from the nuclear deal, policymakers should object to a policy of paying for the release of U.S. hostages. In 2015, the Obama administration negotiated a similar scheme alongside the Joint Comprehensive Plan of Action, sending Iran $400 million — the first installment of a $1.7 billion payment — at the same time Tehran released four Americans. The result was more hostages taken by Iran, including Baquer Namazi, Xiyue Wang, Morad Tahbaz, and Emad Shargi. If $1.7 billion encouraged the regime to take more hostages, $7 billion will guarantee much more hostage-taking to come.

Related Analysis

Iran Releases a U.S. Resident Taken Hostage,” by Tzvi Kahn

Tehran Sentences U.S. Hostage to 10 Years in Prison,” by Tzvi Kahn

Iran’s Hostages-for-Cash Scheme Continues – How Should the West Respond?” by Saeed Ghasseminejad and Annie Fixler