PM scorns US-Iran deal unfreezing Iranian assets in exchange for release of prisoners

Netanyahu says Israel opposes any deal with Iran that doesn’t include dismantlement of nuclear program, arguing that any funds Tehran receives will be funneled to militias

Jacob Magid is The Times of Israel's US bureau chief

Prime Minister Benjamin Netanyahu attends a weekly cabinet meeting in the Prime Minister's Office in Jerusalem on July 30, 2023. (Abir Sultan/Pool/AFP)
Prime Minister Benjamin Netanyahu attends a weekly cabinet meeting in the Prime Minister's Office in Jerusalem on July 30, 2023. (Abir Sultan/Pool/AFP)

Prime Minister Benjamin Netanyahu on Saturday came out against a tentative deal reached by the US and Iran for the latter to release five American detainees in exchange for the release of several billion dollars in frozen Iranian assets.

“Israel’s position is known, according to which arrangements that do not dismantle Iran’s nuclear infrastructure will not stop its nuclear program and will only provide it with funds that will go to terrorist elements sponsored by Iran,” Netanyahu’s office said in a statement.

The deal announced Thursday, alongside Iran’s transfer of the American detainees from prison to house arrest, came together after months of indirect negotiations between US and Iranian officials.

Details of the money transfer, the timing of its completion and the ultimate release of both the American and Iranian prisoners remain unclear. However, US and Iranian officials say they believe the agreement could be complete by mid- to late-September.

Under the tentative agreement, the US has given its blessing to South Korea to convert frozen Iranian assets held there from the South Korean currency, the won, to euros.

That money then would be sent to Qatar, a small, energy-rich nation on the Arabian Peninsula that has been a mediator in the talks. The amount from Seoul could be anywhere from $6 billion to $7 billion, depending on exchange rates. The cash represents money South Korea owed Iran — but had not yet paid — for oil purchased before the Trump administration imposed sanctions on such transactions in 2019.

The US maintains that, once in Qatar, the money will be held in restricted accounts and will only be able to be used for humanitarian goods, such as medicine and food. Those transactions are currently allowed under American sanctions targeting the Islamic Republic over its advancing nuclear program.

This photo released November 5, 2019, by the Atomic Energy Organization of Iran shows centrifuge machines in Natanz uranium enrichment facility near Natanz, Iran. (Atomic Energy Organization of Iran via AP, File)

Some in Iran have disputed the US claim, saying that Tehran will have total control over the funds.

A Thursday report in The New York Times cited a pair of Israeli officials who claimed that the prisoner exchange is part of a larger set of understandings between Tehran and Washington, who have been working toward an informal arrangement that would limit the Iranian nuclear program.

However, US officials have repeatedly denied that the talks were tied to Iran’s nuclear program.

The Wall Street Journal reported Friday that Iran has slowed its enrichment of nearly weapons-grade uranium and reduced a small amount of its stockpile. The report, which cited sources familiar with the matter, was denied by Tehran.

For Iran, years of American sanctions following former US president Donald Trump’s withdrawal from the 2015 nuclear deal with world powers has crushed its already-anemic economy.

The release of its money from Korea, even if only disbursed under strict circumstances, could provide an economic boost.

A woman steps through a door that is covered by a mural depicting American hostages and detainees who are being held outside the US, in the Georgetown neighborhood of Washington, July 20, 2022. (Patrick Semansky/AP)

For the US, the administration of President Joe Biden has tried to get Iran back into the deal, which fell apart after Trump’s 2018 withdrawal. Last year, countries involved in the initial agreement offered Tehran what was described as their last, best roadmap to restore the accord. Iran did not accept it.

Still, Iran hawks in Congress and outside critics of the 2015 nuclear deal have criticized the new arrangement, likening the money transfer to ransom payments that encourage Tehran to continue taking prisoners.

Outside of the tensions over the nuclear deal and Iran’s atomic ambitions, a series of attacks and ship seizures in the Mideast have been attributed to Tehran since 2019.

The Pentagon is considering a plan to put US troops on board to guard commercial ships in the Strait of Hormuz, through which 20 percent of all oil shipments pass moving out of the Persian Gulf.

A major deployment of US sailors and Marines, alongside F-35s, F-16s and other aircraft, is also underway in the region. Meanwhile, Iran supplies Russia with the bomb-carrying drones Moscow uses to target sites in Ukraine amid its war on Kyiv.

AP contributed to this report

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