When $6 billion of unfrozen Iranian funds are wired to banks in Qatar as early as next week, it will trigger a carefully choreographed sequence that will see as many as five detained U.S. dual nationals leave Iran and a similar number of Iranian prisoners held in the U.S. fly home, according to eight Iranian and other sources familiar with the negotiations who spoke to Reuters.
As a first step, Iran on Aug. 10 released four U.S. citizens from Tehran’s Evin prison into house arrest, where they joined a fifth, who was already under house arrest. Later that day U.S. Secretary of State Antony Blinken called the move the first step of a process that would lead to their return home.
They include businessmen Siamak Namazi, 51, and Emad Sharqi, 59, as well as environmentalist Morad Tahbaz, 67, who also holds British nationality, the U.S. administration has said. The Tahbaz and Shargi families did not respond to requests for comment. A lawyer for the Namazi family declined to comment.
The identities of the fourth and fifth Americans, one of whom according to two sources is a woman, have not been disclosed. Reuters couldn't establish which Iranian prisoners, in turn, would be swapped by the U.S.
At the centre of the negotiations that forged this deal between the superpower which Iran brands the "Great Satan" and the Islamic Republic which Washington calls a state sponsor of terrorism is the tiny but hugely rich state of Qatar.
Doha hosted at least eight rounds of talks involving Iranian and U.S. negotiators sitting in separate hotels speaking via shuttle diplomacy, a source briefed on the discussions said, with the earlier sessions focused mainly on the thorny nuclear issue and the later ones on the prisoner releases, Reuters reported.
Doha will implement a financial arrangement under which it will pay banking fees and monitor how Iran spends the unfrozen cash to ensure no money is spent on items under U.S. sanctions, and the prisoners will transit Qatar when they are swapped, according to three of the sources.
"Iran initially wanted direct access to the funds but in the end agreed to having access via Qatar," said a senior diplomat. "Iran will purchase food and medicine and Qatar will pay directly."
Reuters pieced together this account of previously unreported details about the extent of Qatari mediation of the secret talks, how the deal unfolded and the expediency that motivated both parties to clinch the prisoner swap deal. Reuters interviewed four Iranian officials, two U.S. sources, a senior Western diplomat, a Gulf government adviser and the person familiar with the negotiations.
All of the sources requested anonymity because of the sensitivity of a deal which hasn’t been fully implemented.
A State Department spokesperson said the U.S. was not ready to announce the exact timing of the prisoner release. The Department also declined to discuss the details of what the spokesperson termed "an ongoing and highly sensitive negotiation.”
The U.S. administration has not commented on the timing of the funds transfer. However, on Sept 5, South Korean foreign minister Park Jin said efforts were under way to transfer Iran's funds.
"The U.S.-Iran relationship is not one characterized by trust. We judge Iran by its actions, nothing else," the State Department spokesperson added.
Washington consented to the movement of Iranian funds from South Korea to restricted accounts held by financial institutions in Qatar, but no money is going to Iran directly, the spokesperson added.
Qatar’s Ministry of Foreign Affairs did not respond to Reuters' request for comment on the details of negotiations, Qatar’s role in the talks or the terms of the final agreement.
Iran’s foreign ministry and its U.N. mission did not respond to detailed questions regarding this story, read the report.
The sources' account of the negotiation shows how the deal sidestepped the main U.S.-Iran dispute over Iran's nuclear aims, culminating in a rare moment of cooperation between the long-time adversaries, at odds on a host of issues from Iran's nuclear program to the U.S. military presence in the Gulf.
Ties between the U.S. and Iran have been at boiling point since Donald Trump quit a nuclear deal with Iran as U.S. president in 2018. Reaching another nuclear deal has gained little traction since then, as President Joe Biden prepares for the 2024 U.S. election.
The State Department spokesperson also said there had been no change in Washington's overall approach to Iran, "which continues to be focused on deterrence, pressure and diplomacy."
Once the funds are transferred, they will be held in restricted accounts in Qatar, and the U.S. will have oversight as to how and when these funds are used, the State Department spokesperson added.
The potential transfer has drawn Republican criticism that Biden, a Democrat, is in effect paying ransom for U.S. citizens. But Blinken told reporters on Aug 10 the deal does not mean that Iran would be getting any sanctions relief, explaining that Washington would continue to push back "resolutely against Iran’s destabilising activities in the region".
The Qatari-led mediation gained momentum in June 2023, said the source briefed on the discussions, adding at least eight rounds of talks were held since March 2022, with earlier rounds devoted mainly to the nuclear issue and later ones to prisoners.
"They all realised that nuclear (negotiation) is a dead end and shifted focus to prisoners. Prisoners is more simple. It’s easy to get and you can build trust," he said. "This is when things got serious again."
The Iranian, diplomatic and regional sources said that once the money reaches Qatar from South Korea via Switzerland, Qatari officials will instruct Tehran and Washington to proceed with the releases under the terms of a document signed by both sides and Qatar in late July or early August. Reuters has not seen the document.
The transfer to banks in Qatar is expected to conclude as early as next week if all goes to plan, the source briefed on the talks said. Reuters was unable to identify the banks involved.
“American prisoners will fly to Qatar from Tehran and Iranian prisoners will fly from the U.S. to Qatar, and then be transferred to Iran,” the source briefed on the talks told Reuters.
According to two Iranian insiders, the source briefed on the negotiations and the senior Western diplomat, the talks' most complex part was arranging a mechanism to ensure transparency in the money transfer and respect for U.S. sanctions. The $6 billion in Iranian assets – the proceeds of oil sales – were frozen under sweeping U.S. oil and financial sanctions against Iran. Then president Trump in 2018 reimposed the sanctions when he pulled Washington out of a deal under which Iran had restricted its nuclear program.
Issues discussed included how to ensure Iran only spent the money on humanitarian goods and securing guarantees from Qatar on its monitoring of the process.
"To salvage the negotiations from collapse, Qatar pledged to cover the banking fees for the funds' transfer from Seoul to Switzerland, and subsequently to Qatari banks, while also taking on the responsibility of expense oversight," an Iranian insider briefed about the talks told Reuters.
The central bank governors of Iran and Qatar met in Doha on June 14 to discuss the funds transfer, a second Iranian insider and the source briefed on the talks said.
According to Reuters the Central Bank of Iran and the Qatar central bank declined to comment.
The talks were led by U.S. Special Envoy for Iran Robert Malley -- now on unpaid leave because his security clearance is under review -- and by U.S. Deputy Special Envoy Abram Paley and Iran's chief nuclear negotiator, Ali Bagheri Kani, said one Iranian official, two sources briefed on the negotiations and the Western diplomat.
Mehdi Safari, Iran’s deputy foreign minister for economic affairs, joined the Iranian delegation at two meetings in Qatar for talks on the funds transfer, one senior Iranian diplomat told Reuters. Qatari Minister of State at the Foreign Ministry Mohammed Al-Khulaifi was the go-between mediator.
Malley declined to comment. Paley, Kani and Al Khulaifi could not be reached directly for comment.
Earlier this week, U.S. Deputy National Security Adviser Jon Finer said Pakistan’s development of long-range ballistic missiles made it an “emerging threat”.
Pakistan's Foreign Ministry on Saturday dismissed as unfounded and "devoid of rationality" assertions by a senior U.S. official that its missile programme could eventually pose a threat to the United States, Reuters reported.
Earlier this week, U.S. Deputy National Security Adviser Jon Finer said Pakistan's development of long-range ballistic missiles made it an "emerging threat".
Finer's comments, which came a day after Washington announced a new round of sanctions related to the ballistic missile programme, underscored the deterioration in once-close ties between Washington and Islamabad since the 2021 U.S. troop withdrawal from Afghanistan.
Addressing Finer's remarks, Pakistan's Foreign Ministry said the perception of an alleged threat was "unfortunate".
"These allegations are unfounded, devoid of rationality and sense of history," the ministry added in a statement.
The ministry said its strategic capabilities were solely for defending its sovereignty and maintaining regional stability, and should not be perceived as a threat to any other country.
It also highlighted Pakistan's long history of cooperation with the U.S., particularly in counter-terrorism efforts, and reiterated its commitment to engaging constructively on all issues, including regional security and stability, read the report.
Relations between the United States and Pakistan have seen significant ups and downs. The countries collaborated during the Cold War and in the fight against al Qaeda after 9/11.
However, ties have been strained due to coups in the South Asian country by Pakistan's military, support for the Taliban's 1996-2001 rule in Afghanistan, and over the nuclear weapons programme.
Sixteen security personnel were killed in northwest Pakistan in an attack by militants, Reuters reported citing the deputy superintendent of police.
"According to our information, 16 security personnel were martyred and eight injured in this attack. A search operation is under way in the area," said Hidayat Ullah, deputy superintendent of police in South Waziristan.
Speaking to the Carnegie Endowment for International Peace, Finer said Pakistan has pursued “increasingly sophisticated missile technology, from long-range ballistic missile systems to equipment, that would enable the testing of significantly larger rocket motors.”
A senior White House official on Thursday said nuclear-armed Pakistan is developing long-range ballistic missile capabilities that eventually could allow it to strike targets well beyond South Asia, making it an "emerging threat" to the United States.
Deputy National Security Adviser Jon Finer's surprise revelation underscored how far the once-close ties between Washington and Islamabad have deteriorated since the 2021 U.S. troop withdrawal from Afghanistan, Reuters reported.
It also raised questions about whether Pakistan has shifted the objectives of nuclear weapons and ballistic missile programs long intended to counter those of India, with which it has fought three major wars since 1947.
Speaking to the Carnegie Endowment for International Peace, Finer said Pakistan has pursued "increasingly sophisticated missile technology, from long-range ballistic missile systems to equipment, that would enable the testing of significantly larger rocket motors."
If those trends continue, Finer said, "Pakistan will have the capability to strike targets well beyond South Asia, including in the United States."
The number of nuclear-armed states with missiles that can reach the U.S. homeland "is very small and they tend to be adversarial," he continued, naming Russia, North Korea and China.
"So, candidly, it's hard for us to see Pakistan's actions as anything other than an emerging threat to the United States," Finer said.
His speech came a day after Washington announced a new round of sanctions related to Pakistan's ballistic missile development program, including for the first time against the state-run defense agency that oversees the program.
The Pakistani embassy did not immediately respond to a request for comment.
Islamabad casts its nuclear weapons and ballistic missile programs as deterrents against Indian aggression and intended to maintain regional stability.
Two senior administration officials, speaking on condition of anonymity, said that the U.S. concerns with Pakistan's missile program have been long-standing and stemmed from the sizes of the rocket engines being developed.
The threat posed to the United States is up to a decade away, said one official.
Finer's comments, the officials said, were intended to press Pakistani officials to address why they are developing more powerful rocket engines, something they have refused to do.
"They don't acknowledge our concerns. They tell us we are biased," said the second U.S. official, adding that Pakistani officials have wrongly implied that U.S. sanctions on their missile program are intended "to handicap their ability to defend against India."
Finer included himself among senior U.S. officials who he said repeatedly have raised concerns about the missile program with top Pakistani officials to no avail.
Washington and Islamabad, he noted, had been "long-time partners" on development, counter-terrorism and security.
"That makes us question even more why Pakistan will be motivated to develop a capability that could be used against us."
Pakistan has been critical of warm ties U.S. President Joe Biden has forged with its long-time foe India, and maintains close ties with China. Some Chinese entities have been slapped with U.S. sanctions for supplying Islamabad's ballistic missile program.
It conducted its first nuclear weapons test in 1998 - more than 20 years after India's first test blast - and has built an extensive arsenal of ballistic missiles capable of lofting nuclear warheads.
The Bulletin of the American Scientists research organization estimates that Pakistan has a stockpile of about 170 warheads.
U.S.-Pakistani relations have undergone major ups and downs, including close Cold War ties that saw them support Afghan rebels against the 1979-89 Soviet occupation of Afghanistan.
Pakistan also was a key partner in the U.S. fight against al Qaeda following the Sept. 11, 2001, attacks on the United States, and has been a major non-NATO ally since 2004.
But ties also have been hurt by coups staged by the Pakistani military, its support for the Islamic Emirate's 1996-2001 rule and its nuclear weapons program.
Several experts said Finer's speech came as a major surprise.
"For a senior U.S. official to publicly link concerns about proliferation in Pakistan to a future direct threat to the U.S. homeland - this is a mighty dramatic development," said Michael Kugelman of the Wilson Center think tank.
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