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US says it can deny Iran access to $6bn in funds held in Qatar

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Senior US officials have vowed to stop $6bn in Iranian funds held in a Qatari account from being transferred to Tehran without Washington’s consent, as they tried to defuse a bipartisan political backlash over the money after Hamas’s attacks on Israel.

The US had allowed the frozen Iranian assets to be sent from South Korea to Qatar as part of a prisoner swap deal with Tehran last month, on condition that any eventual transfers of the funds to the country be directed to humanitarian aid.

But the transfer of the money to Qatar, which is a US ally but also has close ties to Iran and Hamas, has turned into a political vulnerability for the Biden administration following the attacks on Israel. The sudden outbreak of war last Saturday has led for sweeping calls from Republicans and even some Democrats on Capitol Hill for the White House to refreeze the money or block it from being sent to Iran under any circumstances.

On Thursday, top US officials tried to reassure Congress and the public that the money was subject to strict safeguards that would prevent it from heading to Iran without their approval.

“We’ve always had the option, if we wanted it, to look at transactions and to make a call about whether we found it valid or not,” said John Kirby, the co-ordinator for strategic communications at the National Security Council, on Thursday. “None of that money has been accessed by anybody. It’s still all there.”

“Funds from that account are overseen by the Treasury department [and they] can only be dispensed for humanitarian goods,” said Antony Blinken, US secretary of state. “We have strict oversight of the funds and we retain the right to freeze them.”

Earlier in the day, Wally Adeyemo, the deputy Treasury secretary, briefed lawmakers on Capitol Hill about the fate of the funds. Some US media reported that Adeyemo told lawmakers there was an informal understanding with Qatar that the money would not be transferred to Iran, but the Treasury declined to confirm that. Qatar did not immediately respond to a request for comment.

One person familiar with Adeyemo’s briefing said that Lois Frankel, a Florida Democrat, pressed Adeyemo to guarantee that the money was permanently frozen, but he couldn’t guarantee that. Kirby also declined to say whether there was any deal with Qatar — even an informal one — ensuring that the money could not be sent to Iran.

Brad Sherman, a Democratic representative from California, told the Financial Times that he would like to see all the documents related to the original deal with Qatar and Iran over the $6bn in funds, and believed they should be immediately transferred back to South Korea.

Sherman said he worried that even if Qatari authorities stopped the money from flowing to Iran for now, they would restore it eventually.

Democrats will face tough elections in the 2024 congressional races — including Senator Jon Tester of Montana and representative Elissa Slotkin of Michigan — who have been most vocal in calling for president Joe Biden to block the funds.

Last month’s US deal to unfreeze the Iranian funds has quickly become a political punch bag. “We need to freeze those assets and send a message to the world that we stand shoulder-to-shoulder with Israel. And there is no daylight,” said Tim Scott, the South Carolina senator who is running in the Republican primary race.

Mike Lawler, a Republican representative from New York, introduced a resolution in the lower chamber of Congress calling for the release of the funds to be reversed.

“We absolutely cannot turn a blind eye to the continued support of terrorism by the Iranian regime and the administration must immediately rescind the waiver that allowed for the transfer of these illicit funds to Iran,” he said in a statement.

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