US-Iran Prisoners Swap: Understanding the New Breakthrough in Diplomacy

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In a surprising turn of events, the longstanding adversaries–the United States and Iran reached an agreement on a prisoner swap, on the 18th September, marking a rare moment of cooperation between the two. After almost two years of painstaking negotiations, the Biden administration and Iranian authorities have struck the deal where the world witnessed the release of five American nationals held in Iran in exchange for unfreezing $6 billion of Iranian oil revenue and release of five Iranian from the American prison.

The prisoner swap is not merely a humanitarian gesture rather carries profound geopolitical implications. The pacifists contend that this breakthrough is a crucial step towards de-escalating the long-standing tensions that have defined the relationship for decades. While it may not represent an immediate end to their frosty relations, it does open the door to more comprehensive discussions on a range of contentious topics. It could serve as a catalyst for dialogue aimed at safeguarding the global peace and stability of the Middle East. However, not everyone is enthusiastic about this development as the agreement has ignited a fierce debate in the US, fearing that it may set a perilous precedent that could incentivize Iran to take more American citizens hostage, and use them as bargaining chips in future negotiations.  This short brief attempt to grasp agreement’s impact and evaluate its implications on the bilateral relations of US-Iran in the coming days.

The Prisoner Swap

Iran and the US have a long history of prisoner swaps and have made some notable exchanges. The very first of this practice can be traced back to the 1979 hostage crisis in the US Embassy in Tehran, which saw 52 Americans held captive for 444 days. The trend continued with significant episodes such as the Iran-Contra Scandal in 1985, where the U.S. secretly facilitated arms sales to Iran in exchange for the release of Americans held hostage in Lebanon by Hezbollah. In 2016, during a highly publicized prisoner swap, the Obama administration transferred $400 million cash to Iran in exchange for the release of American journalists and other prisoners and the last incident took place in 2019 when an American student was released by Iran in exchange for one of its scientists.

This time the negotiations were complex and took more than two years of sensitive and complex negotiations. The process was even more challenging by the fact that the US and Iran have no diplomatic relationship. The deal was secretly mediated by the two gulf nations, Qatar and Oman, famous for brokering such heavy negotiations in the middle eastern countries, and Switzerland. The brokers shuttled between Tehran and Washington, and as per report at least nine rounds of negotiations took place before the agreement was reached.

According to details, the $6 billion dollar unfreezed in the agreement was Iran’s oil selling revenue reserved in a South Korean bank. Although the trade was prior to the Trump administration’s sanction on transaction of transferring fund in 2019, the South Korean bank refused to transfer the money to Iran, fearing repercussions of violating US sanctions. The last pieces of the swap fell into place when the $6bn funds reached banks in Doha and the prisoner swap took place at the Qatari capital. The liberated American list included dual citizenship holder Iranian Americans and the Iranian who were granted clemency were mainly imprisoned in US jails on charges of violating US sanctions.

What Does It Mean for the Two Nations – Iran and the US?

The deal carries different implications for various stakeholders, sparking intense debate and scrutiny on both sides.

For Iran, the deal holds immense significance, particularly from an economic standpoint. The country has been grappling with a prolonged economic crisis, exacerbated by rampant corruption and government inefficiency, but largely driven by harsh U.S.-led sanctions. These sanctions have been so severe that even South Korean banks, holding Iranian assets, have hesitated to release them. Iran’s economic woes are evident in its staggering inflation rate of approximately 47.5 percent and a sharply depreciating Iranian Rial, which has plummeted to over 500,000 to 1 Dollar from about 300,000 just a year ago. Reports from the Iranian health ministry reveal that a substantial portion of the population lacks access to basic necessities like food and treatment. Therefore, for Iran, the unfreezing of these funds is paramount, as it promises to provide a lifeline to stabilize the currency and alleviate some of the economic hardships faced by its citizens.

The U.S. perspective on the other hand differs significantly. The Biden administration has emphasized the humanitarian intent behind the release of these funds and insists on strict regulation. The US has said that no funds will go into Iran and the released funds will be held in restricted accounts in Doha; to only be used for humanitarian purposes i.e., for buying goods such as medicine and food, as every transaction to the third party would be closely monitored. However, not everyone sees the rosy picture. The Republicans remain skeptical of monitoring transactions, as it is almost impossible to police financial crimes. They accuse President Biden of naivety, arguing that releasing the funds could bolster Iran’s economy at a time when the two have locked horns in the Middle East. Moreover, they express concerns that such agreements could encourage Iran to continue hostage-taking as a diplomatic tool, putting the security of American citizens worldwide at risk. This deal could also have serious implications in the next year’s presidential election where the Democrats may present it as a means of saving American lives, while Republicans could frame it as a concession to Iranian manipulation, raising doubts about Biden’s ability to manage American priorities.

Lessons for Diplomacy

The agreement, although a positive development, has not fundamentally altered the strained bilateral relations between these two nations. While the prisoner swap is proof that even fierce adversaries can sometimes find their way to an agreement and has generated optimism about the possibility of improved bilateral relations. In reality, it does not address the dynamics of their relationship and the challenges that lie ahead. It does not address the core issues that have historically divided these nations or even current major disputes, particularly concerning Tehran’s nuclear program and other geopolitical issues, remain unresolved. Tensions between the U.S. and Iran are likely to persist. There is growing fear among some US analysts that Iran could utilize the fund to back the proxy groups in the Middle East. The timing of the prisoner release coincides with a significant American military buildup in the Persian Gulf. This includes the possibility of U.S. troops becoming involved in boarding and guarding commercial ships in the strategically crucial Strait of Hormuz. Additionally, diplomatic efforts are underway to impose fresh sanctions targeting figures like former Iranian President Mahmoud Ahmadinejad and Iran’s intelligence ministry.

The prisoner swap agreement undoubtedly is a complex diplomatic development with far-reaching implications. It has provided much-needed relief for Iran’s economy and offers a glimmer of hope for improved bilateral relations. It has also ignited intense scrutiny and debate in US domestic politics. There is a growing skepticism regarding the future security of US nationals as well as national security. With deep-rooted skepticism regarding the other party’s intentions, this agreement demonstrates a possibility of finding out a solution to a crisis amid hostile bilateral relations.

– Wahid Uzzaman Sifat is a Research Intern at the KRF Center for Bangladesh and Global Affairs (CBGA).

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