U.S. and Qatar Deny Iran’s Access to $6 Billion From Prisoner Deal

The United States and Qatar have agreed to deny Iran’s access to $6 billion in funds 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.

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.

The move comes amid harsh criticism, mainly from Republicans, that the Biden administration gave Iran access to a vast sum that freed up other funds for Tehran to provide support to Hamas before its attack on 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 opponents of releasing the funds said the fungibility of money meant the restrictions had little meaning.

It is unclear whether the Biden administration intends to cut off the funds permanently or may be taking an interim step as it gathers more information about Iran’s potential ties to Hamas. It is also unclear whether the action reflects any new analysis by the administration about Iran’s role in the attack. Regardless, it is certain to infuriate Iran’s leadership after a painstaking prisoner swap that took many months to construct and weeks more to complete.

Speaking to reporters in Tel Aviv on Thursday, Secretary of State Antony J. Blinken would not confirm that Iran would be denied access to the account. But he noted that “none of the funds that have now gone to Qatar have actually been spent or accessed in any way by Iran.”

Under the terms of the prisoner deal last month, the money was transferred from South Korean banks, where it accumulated as Seoul purchased Iranian oil under an agreement with the Trump administration, which choked off most of Iran’s energy exports. But Iran complained that those banks, fearful of being ensnared in U.S. sanctions, made it impossible to gain access to the money.

In return for Iran’s release of Americans who had been held for as many as eight years, the money was shifted to banks in Qatar to allow Iran to tap the funds.

The decision to cut off the funds appears to be a reversal by the Biden administration, which had insisted until recently that the money was not relevant to the Hamas attack on Israel.

When questioned on Sunday about Republican attacks that giving Iran access to the money might have allowed it to increase support for Hamas, Mr. Blinken rejected the charge.

“When any money is spent from that account, it can only be used for medical supplies, for food, for medicine,” Mr. Blinken said on NBC’s “Meet the Press.” “And those who are saying otherwise are either misinformed or misinforming, and it’s wrong, either way.”