US and Qatar deny Iran access to $6 billion from prisoner deal

The United States and Qatar have agreed to deny Iran access to $6 billion recently transferred to the nation as part of a deal between Washington and Tehran that led to the release of five imprisoned Americans from Iran last month, the New York Times reported.

Wally Adeyemo, the deputy Treasury secretary, told House Democrats on Thursday that Iran would no longer have access to the funds, according to a person familiar with the matter. The money was under close supervision and strict conditions that it be used only for humanitarian purposes.

US officials did not describe the money as frozen permanently but said that case-by-case applications to spend it under the current arrangement will be denied for the foreseeable future.

The move comes after harsh criticism, mainly from Republicans, that the Biden administration had given Iran a vast sum that freed up other funds for Tehran to provide support to Hamas before it attacked Israel over the weekend.

U.S. officials said they had not seen intelligence that Iran had directly assisted with the assault and that some senior Iranian officials were taken by surprise. But Tehran has been a major backer of Hamas for decades, and critics said the fungibility of money meant the restrictions had little meaning.

The Treasury Department, which oversees the funds, is not employing sanctions powers to formally freeze the money but has what was described as a quiet understanding with Qatar that Iran will be unable to retrieve it.

It is unclear whether the Biden administration may yet declare the funds permanently off limits. It is also unclear whether the action reflects any new analysis by the administration about Iran’s role in the attack.