Iran Says Unfrozen S. Korean Funds Already In Europe

Islamic Republic of Iran’s foreign minister Hossein Amir-Abdollahian announced Monday that unfrozen funds from South Korea have been transferred to a European bank.

Amir-Abdollahian who was speaking at a gathering in the foreign ministry said the funds were already sent from South Korea to a European bank on August 10, the day when a hostage release deal the United States was announced.

The US agreed to allow $6 billion held in two South Korean banks to be released in exchange for five Americans taken hostage in Iran in the past few years. The funds were frozen due to US banking sanctions on Iran imposed after Washington pulled out of the JCPOA nuclear deal in 2018.

The Iranian foreign minister also stated that in the original agreement with the United States and different parties it was agreed to release the funds in a few batches, “not to inflict a shock on Korea’s financial system,” but later it was agreed “to transfer most of the funds to Europe except a small portion in order not to close the bank accounts in Seoul.” He did not name the European bank.

Media reports both in Iran and abroad have said that the funds will be transferred from South Korea to Switzerland, converted into euros and then transferred to Iranian bank accounts in Qatar. The money will stay there and be allowed to be disbursed for humanitarian needs, such as food and medicine, with the United States involved in the process. However, it is not clear exactly how Washington will make sure that Iranians do not cheat, given their years of experience in manipulating financial systems and circumventing sanctions. 

One worrying factor is that the released funds will be deposited in Qatar in euros, which will hamper the US ability to closely monitor wire transfers unlike dollar transactions.

Despite earlier Iranian statements that as soon as the funds reach Qatar the five US citizens will be allowed to leave, Amir-Abdollahian said that “the two issues are not related.” The Biden administration has come under sharp criticism for what many say is a ransom paid for hostages that will enrich Iran’s regime and embolden would be hostage takers.

Almost immediately, Amir-Abdollahian seemed to correct his statement, saying that through an intermediary, Iran and the United States have two separate documents, one about the release of the funds and another for freeing the hostages.

Informed sources earlier told Western media that the process of fund transfers could take 30-45 days, but according to Iran’s foreign minister the money is already in Europe.

Foreign Ministry Spokesman Nasser Kanani told reporters on Monday that disclosing specifics of the deal to the media would not be "helpful" given the current circumstances. “The details of this understanding in the media are not helpful at this point in time," Kanaani added. 

The withholding of information comes in the face of increasing criticism and protests against the agreement, both in Iran and internationally, particularly in the United States.

The Wall Street Journal in an editorial on Sunday harshly criticized the Biden administration for paying $1.2 billion per hostage and dismissed the claim that the funds will only be used for humanitarian needs.

“Iran will use the cash the same way it did the money it received from the Barack Obama-John Kerry 2015 nuclear deal—to spread mayhem in the Middle East and beyond,” WSJ said. It also argued that “Money is fungible, as the White House knows, and its ‘humanitarian purposes’ line is best understood as political cover to justify the money-for-hostages deal. In a competition for the funds between the Islamic Revolutionary Guard Corps and the public health of the Iranian people, who do you think wins?”