February 22, 2023 | Flash Brief

U.S. May Release $7 Billion in Frozen Funds to Iran

February 22, 2023 | Flash Brief

U.S. May Release $7 Billion in Frozen Funds to Iran

Latest Developments

The Biden administration is reportedly conducting indirect negotiations with the Islamic Republic of Iran for the release of U.S. hostages. In exchange for the prisoners, Washington may free Iranian nationals detained in America and release up to $7 billion in Iranian funds, held in South Korean banks, that are frozen due to U.S. terrorism sanctions. Qatar may facilitate the monetary transfer. The proposed exchange comes as protests resurge throughout Iran and the rial hits an historic low against the U.S. dollar.

Expert Analysis

“Everyone wants to bring home U.S. hostages, but paying a $7 billion ransom to the world’s leading state sponsor of terrorism will guarantee more U.S. citizens are taken hostage not just by Iran but by other regimes around the world. This is a budget support proposal for a regime that is hunting U.S. citizens, murdering its own people, and helping Russia terrorize Ukrainians.” Richard Goldberg, FDD Senior Advisor

U.S. Previously Linked $7 Billion Hostage Deal to Nuclear Talks

Following a meeting in September 2022 between U.S. Special Envoy for Iran Robert Malley and South Korean First Vice Foreign Minister Cho Hyundong, 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.” In August 2022, leaked details from nuclear negotiations revealed that the release of $7 billion from South Korea would be the first step taken in a revived nuclear agreement’s sequencing.

A Dangerous Precedent of Paying for 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. Predictably, Iran later took more hostages. Raising the ransom to $7 billion will guarantee even more hostage-taking to come. As Russia comes under increasing sanctions pressure, Moscow may follow Iran’s suit in detaining more U.S. citizens as leverage for negotiating sanctions relief.

Related Analysis

Release of Hostages in Iran May Be Linked to U.S. Sanctions Relief,” by Tzvi Kahn

Settling with Iran: $1.7 Billion and U.S. Hostages,” by Behnam Ben Taleblu and Annie Fixler


Iran Iran Global Threat Network Iran Politics and Economy Iran Sanctions Sanctions and Illicit Finance