Washington — President Biden has signed off on a politically charged agreement with Iran to bring home five American citizens in exchange for the regime gaining access in the coming weeks to billions of dollars in blocked funds sitting outside the heavily sanctioned country , CBS News has learned.
Some $6 billion of that money currently sits in a restricted bank account in South Korea that is inaccessible to the heavily sanctioned Iranian regime.
The prisoners involved in the agreement include Siamak Namazi , who has been held in Iran for nearly eight years; Emad Shargi , a Washington, D.C., resident; and Morad Tahbaz, a U.S.-U.K. national. Two other Americans who wish to remain unidentified will also be part of the agreement, a source familiar with the deal said.
Namazi, Shargi, Tahbaz and one of the unidentified prisoners were released from Iran's notorious Evin Prison under house arrest on Thursday, according to the White House and an attorney for Namazi's family. The fifth prisoner had already been held under house arrest.
Adrienne Watson, a spokesperson for the National Security Council, confirmed the five prisoners had been placed under house arrest and said "negotiations for their eventual release remain ongoing and are delicate." She said the prisoners "should have never been detained in the first place," and that the Biden administration "will not rest until they are all back home in the United States."
The Iranian mission to the United Nations told CBS News that the U.S. and Iran had both agreed to "reciprocally release and pardon five prisoners." In response, a U.S. official said no one had been released from U.S. custody as part of a deal to date.
Babak Namazi, Siamak's brother, called the Americans' release "a positive change" but said "we will not rest until Siamak and others are back home."
"We have suffered tremendously and indescribably for eight horrific years and wish only to be reunited again as a family," Babak Namazi said.
The deal with Iran
A source familiar with the deal said it will be considered complete once the Americans return to U.S. soil, which could be as soon as September, though the source acknowledged the diplomacy is highly sensitive and dependent on Iran following through with its end of the process.
Under the terms of the arrangement, the $6 billion will be transferred to a bank account in a third country over the coming weeks, and Iran will then gain access to it. Officials in two Western-allied countries told CBS News that Qatar will be the country to hold those funds in restricted accounts.
The U.S. is not lifting any sanctions or giving any cash to Tehran, a source familiar with the deal insisted. The source said any transfers of funds would be carefully overseen by the U.S. Treasury Department to make sure they comply with existing sanctions and that the restricted funds are used for trade purposes that are permitted.
Speaking to " Face the Nation " on July 16, White House national security adviser Jake Sullivan confirmed efforts were underway to bring home four American prisoners, but claimed there was no deal within reach at that time. Since then, and amid ongoing indirect diplomatic outreach, a fifth American was detained by Iran. All five Americans are expected to be released back to their families in the coming weeks.
Negotiations with Iran have been indirect and have had multiple complications in recent months. The sudden departure of Rob Malley, Mr. Biden's Iran envoy who was suspended amid a security clearance review, was one of them.
In March and again in June, Iranian state media carried reports claiming that a swap negotiated by mediators was within reach.
In recent months, Brett McGurk , White House coordinator for the Middle East and North Africa, has been in the lead role, which is a reprise of sorts of the direct prisoner talks he conducted during the Obama administration. Back in 2016, following the landmark nuclear deal with Iran, McGurk directly negotiated a separate prisoner swap that exchanged Iranian convicts in U.S. prisons for four Americans detained by Tehran, including journalist Jason Rezaian and Marine veteran Amir Hekmati.
On the day of that release, the U.S. transferred $400 million in cash to Iran by coordinating an airlift of foreign currency on an unmarked plane flown into the country with a first installment of a nearly $2 billion long-outstanding legal settlement with Tehran from the years of the shah's rule. U.S. sanctions prohibit dollars from being used in transactions with Iran.
In a 2019 "Face the Nation" interview, McGurk rejected accusations that this was "cash for hostages" and recounted that after a tough 14-month negotiation, the Iranians tried to renege on the prisoner deal at the last minute. He told CBS News that in those final moments, he made it clear to Iranian authorities that the plane carrying the cash would not be sent if the Americans were not allowed to depart Iran as negotiated. The leverage worked, but there was also political fallout in the U.S., as critics of the Obama administration argued that it looked like the U.S. was paying ransom.
One American left behind in that 2016 trade was Namazi, who was detained by Iran a year earlier. Namazi, now 51, has said he was abandoned by the U.S. government at that time and has issued public pleas to Mr. Biden to bring him home. The U.S. and U.N. consider him to be arbitrarily detained. This time, the U.S. has included him in the transfer plans.
The arrangements are different in 2023. The funds will be held in restricted accounts set up for non-sanctionable trade purposes and overseen by the U.S. Treasury. That still may not satisfy critics, who may argue that the fungible nature of money means any relief to the financially strapped Iranian regime will help the world's leading state sponsor of terrorism despite its ongoing human rights abuses .
Diplomats from multiple U.S.-allied countries have been involved in the project to bring home the Americans, including Switzerland, which acts as a U.S. protecting power in Tehran since the U.S. does not have diplomatic representation in Iran. The Gulf nations of Oman and Qatar have also facilitated the indirect diplomatic work conducted by the Biden administration.
Iran's economy is under strain due to mismanagement and sanctions, though it has been able to continue to evade some Western sanctions to trade oil with both Russia and China. An official from a Western ally told CBS News that China has been purchasing Iranian oil at a $20 per barrel discount from the market price. The cash-strapped regime has been willing to take the haircut to stay afloat.
A separate but parallel challenge with Iran has been its continued nuclear development since it exited the international agreement known as the Joint Comprehensive Plan of Action, or JCPOA, following the Trump administration's declared 2018 withdrawal .
Mr. Biden campaigned on a promise to revive JCPOA and make it longer and stronger, but attempts to do so have been unsuccessful.
The U.S. intelligence community assesses that Iranian Supreme Leader Ayatollah Ali Khamenei has not at this time decided to pursue a nuclear weapon, though the regime's capabilities continue to develop.
In early June 2023, Iran state media carried remarks from the supreme leader claiming that an arrangement with the West regarding its nuclear program would be possible. In July, a Western ally told CBS News there are already measurable signs that Iran has temporarily slowed some of its nuclear development, but the Biden administration has not acknowledged that any understanding is in place regarding the nuclear program.
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