Iranian assets that had been frozen in South Korea were transferred to Switzerland's central bank last week for exchange and transfer to Iran, South Korean media reported on Monday.
The $6 billion in funds originating from the profits of Iran 's oil sales and which were frozen there following the American sanctions on it, have now been transferred to a bank in Switzerland, in preparation for their eventual transfer to Iranian hands.
The Swiss National Bank plans to exchange its $6 billion holdings in won for dollars and then euros in the currency market, converting about 300 billion won ($223.85 million) to 400 billion each day for next five weeks, Yonhap Infomax reported, citing an unnamed currency market source.
An official at South Korea's finance ministry declined to confirm the report, citing the legal and diplomatic sensitivity of the matter.
Iran and the United States recently reached an agreement under which five U.S. citizens detained in Iran would be released while Iranian assets in South Korea would be unfrozen and sent to an account in Qatar that Iran could access. The US reportedly also will release some Iranian prisoners as well.
US officials say that Tehran's use of the funds held Qatar would be limited to humanitarian purposes such as food and medicine, and that it would not be able to use it for the purchase of dual-use components, or those that have a civilian benefit as well as a military benefit. Iran argues that there should be no limit on the use of the funds.
Opponents of the deal - including the Republican opposition to President Joe Biden - warn that even if the funds are used only for humanitarian purposes, they will allow the Iranian regime to allocate other funds, which are currently used for the same civilian purposes, to finance its nuclear program and provide assistance its militias throughout the Middle East.
Meanwhile, Tehran and Washington have come to some limited understandings on a renewed nuclear deal, according to reports earlier this month, although the connection to prisoner swap is not yet clear. A day after the prisoner deal was revealed, the Wall Street Journal reported that Iran had significantly slowed down the rate at which it was enriching uranium to a level of 60% – a level that is dangerously close to the 90% needed for nuclear weapons - and had even slightly diluted its existing stockpile, which is already enough for the production of the fissile material needed for several bombs.
The New York Times reported that the prisoner deal may increase the chances of diplomatic cooperation between the US and Iran, including on the nuclear issue. Senior officials in the Israeli security establishment told the newspaper that "the deal is part of the broad understandings reached in Oman and are already being implemented on the ground." The Western countries reportedly previously told Iran that if there were steps to "reduce tensions" during the summer - they would be open to broader talks later this year.
In Israel, the understandings that were allegedly reached have been severely criticized, and Prime Minister Benjamin Netanyahu's office said following the reports: "Israel's position is known. Arrangements that do not dismantle Iran's nuclear infrastructure do not stop its nuclear program - and only provide it with funds that will go to terrorist elements sponsored by Iran.