US National Security Council Spokesperson Adrienne Waston, in a statement on August 10, 2023, affirmed that Iran has released from prison five Americans who were detained and has placed them on house arrest. US citizens Siamak Namazi, Morad Tahbaz, Emad Shargi, and two others were released from Tehran’s notorious Evin prison to house arrest. The US official described their release as “an encouraging step” and stressed that Washigton will continue efforts to bring them “all back home in the United States.”
Implications of the Deal
The implications of the deal between Iran and the United States can be highlighted as follows:
1. Release of frozen Iranian funds:
Western media reported that the tentative prisoner swap agreement between Washington and Tehran involves the release of approximately 6 billion dollars from frozen Iranian oil revenues that are in South Korea. These funds are to be deposited into bank accounts in Qatar after the transfer. In addition, Washington will release Iranians imprisoned on charges of violating sanctions on Tehran.
Implementation of the agreement is expected to take between 4 to 6 weeks. According to Iranian President’s Deputy Chief of Staff for Political Affairs Mohammad Jamshidi US prisoners won’t be freed until the funds are fully transferred from South Korea to Qatar.
2. Washington’s restrictions on released Iranian assets:
US Secretary of State Antony Blinken said that the funds released as part of the deal can only be used by Tehran for humanitarian purposes, which is permitted under US sanctions. Non-sanctioned trade includes purchasing food and medicine. The funds would be transferred to restricted accounts to ensure they are not used in violation of sanctions. Blinken further emphasized that “Iran will not be receiving any sanctions relief,” and that Washington will continue to enforce all of its sanctions and “to push back resolutely against Iran’s destabilizing activities in the region and beyond.”
Meanwhile, Iran offered conflicting statements about the spending of the funds expected to be released. While Iranian Foreign Minister Hossein Amir Abdollahian rejected any preconditions from Washington regarding the prisoner exchange process with Iran, the Central Bank of Iran confirmed on August 12, 2023, that the collected funds to be released under the deal will be deposited in six Iranian banks in Qatar, and that they will be held in euros and used to purchase non-sanctioned goods.
3. Qatari mediation:
The agreement between Washington and Tehran came through Qatari mediation. Prior to this agreement, intensive visits by Qatari officials to both Washington and Tehran aimed to bridge the perspectives of the two sides. The latest of these visits was made by Qatari Minister of State at the Ministry of Foreign Affairs, Mohammed al-Khulaifi, on July 23, 2023. Al-Khulaifi met with both Abdollahian and the Secretary-General of the Iranian Supreme National Security Council Ali Ahmadian to discuss the prisoner exchange deal between Iran and the United States. The Qatari official also confirmed that the understandings between the two sides resulted in an agreement to establish a banking channel to "address the agreed-upon issues between the two sides." He was referring to the release of frozen Iranian funds through banks in Qatar.
4. Israel opposing the deal:
Israeli Prime Minister Benjamin Netanyahu, on August 13, 2023, came out against the deal between the US and Iran stating that "agreements 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."
Iranian Objectives
Iran aims to utilize this deal with Washington to achieve several objectives, the most prominent of which are as follows:
1. Breaking the stalemate in nuclear talks:
The new deal between the US and Iran comes at a time when efforts are intensifying to break the deadlock in the nuclear talks, which have been stalled since September 2022. In recent months, meetings have taken place between Iranian and Western officials in New York and capitals of Gulf Arab countries to discuss reviving the nuclear agreement. In this context, Tehran, through its officials, has affirmed its readiness to return to negotiations regarding the nuclear deal. This was recently highlighted by Iranian President Ebrahim Raisi in a statement on August 8, 2023, in which he said that his country has not left the negotiation table and emphasized the importance of lifting sanctions on Iran.
Israeli sources have indicated that the prisoner deal between Washington and Tehran is part of broader understandings reached in the Sultanate of Oman. These understandings are already being implemented on the ground, within the framework of an informal agreement between the two sides. This agreement reportedly restricts Iran's nuclear program and regulates its militias operating in Iraq and Syria. These statements are consistent with what was previously mentioned in the Wall Street Journal on June 14, 2023, regarding this potential agreement.
Perhaps this is bolstered by a statement by an unnamed US military source quoted by the New York Times as saying that there has been decreased activity by Iran-backed militias in Syria and Iraq against US troops there in recent weeks.
Western media have reported that Iran has significantly slowed down the pace at which it is accumulating enriched uranium, and has diluted a small part of its stockpile of uranium enriched above the 60 percent purity threshold.
However, on August 12, 2023, Fars News Agency, which is affiliated with the Iranian Revolutionary Guard Corps, quoted an unnamed source as denying these claims and confirming that Iran will continue its nuclear activities in all fields, as per the so-called Strategic Action Plan to Lift Sanctions and Protect Iranian Nation's Interests which was approved by the Iranian Parliament in December 2020.
2. Avoiding provoking Washington's anger:
The prisoner exchange deal coincided with Washington’s moves to intensify its military presence in the region in recent times. In early August 2023, the United States announced its intention to put armed personnel on commercial carriers traveling through the Gulf and the Strait of Hormuz. It is also sending USS Thomas Hudner, a destroyer, and a number of F-35 and F-16 fighter jets to the region to stop Iran from threatening and seizing civilian vessels traveling in the region’s waters given an increase in these threats over the past months.
The prisoner swap agreement is seen as an attempt by Iran to avoid angering Washington and European allies and to encourage them to continue moving forward in the path of nuclear negotiations with Tehran. This is especially significant because U.S. and European officials are inclined to open broader discussions with Iran later this year if tensions are eased by Iran during this summer.
3. Attempting to isolate Israel’s position:
Through this agreement, Iran aims to drive a wedge between the stances of the United States and Israel, its closest ally. This comes in light of the coordination between the two sides to deter Iran, as demonstrated recently by carrying out their largest joint military exercise ever in late July 2023. Juniper Oak 2023 was first launched in January and is the largest joint military exercise ever between the United States and Israel. The exercise is seen as a warning message to Iran, given its escalation in both its nuclear and missile programs, as well as its continued support for militias operating in the region.
Israel has recently intensified its attacks on Iranian sites in Syria. An Israeli airstrike on August 7, 2023, targeted sites belonging to Iranian militias near the Syrian capital, Damascus. This resulted in the death of four soldiers and the injury of four others, according to a statement by the Syrian Ministry of Defense. Additionally, Israel carried out airstrikes on missile depots belonging to Iranian militias in the western outskirts of Damascus on August 13, 2023. No human casualties were reported as of the time of writing this brief.
Accordingly, through the prisoner swap deal, Iran aims to urge the U.S. to prioritize the diplomatic track. Washington emphasizes its continued commitment to dealing with Iran through diplomacy rather than military action which is favored by Israel for dealing with Iran.
4. More diplomatic achievements:
Iran's intention behind reaching this agreement with the United States is to send reassuring messages to the Iranians that the current government is committed to achieving diplomatic successes on the international stage that would ease the economic pressures impacting a significant portion of the population because they result from Western sanctions on Iran.
The bid was evidenced recently, in July 2023, in a sanctions waiver when Washington allowed Baghdad an exemption to repay around USD 3 billion in gas and electricity debt to Iran. Additionally, Iran officially joined the Shanghai Cooperation Organization on July 4, 2023 and aims to join the BRICS group. The Iranian foreign minister participated in a meeting of the group, held in Cape Town, South Africa, in early June 2023.
Iran is also making efforts to open up to, and normalize its relations with Arab countries.
Additionally, in July 2023, President Raisi visited three African countries in July 2023. These initiatives are all part of Iran's broader strategy to alleviate the economic impact of Western sanctions.
In conclusion, it can be said that the recent prisoner swap deal could potentially open the door to wide-ranging criticism from both Republican and Democratic Congress members against the Biden Administration, perceived to be assisting Iran in obtaining funds that could potentially threaten US troops and allies in the region. However, this deal might also be a sign of de-escalation of tension between the US and Iran in the near future. Nonetheless, it's unlikely to lead to broader agreements between the two sides, especially concerning the nuclear deal. The prospect of such broader agreements remains uncertain, particularly because the US presidential elections are approaching. This uncertainty makes Iran hesitant to move forward in reviving the nuclear agreement with the US over concerns that a Republican president might withdraw from any agreement that the Biden Administration has reached with Tehran.
