Iran’s $6B in unfrozen funds: What to know

The surprise terror attack carried out in Israel on Saturday by Iran-backed Hamas has prompted scrutiny of the $6 billion in Iranian funding that was unfrozen by the Biden administration as part of a prisoner swap and whether it played a role in the attack by Hamas.

In September, Iran released five American citizens in exchange for five Iranians held by the U.S. as well as the transfer of $6 billion in frozen Iranian funds. Those funds were proceeds from oil exports to South Korea that were blocked in South Korean banks because of the Trump administration’s 2019 sanctions on Iran’s oil exports and banking sector. Under the deal, the $6 billion in funding is to be held in a Qatari bank account monitored by the U.S. to ensure that the money can only be used for humanitarian purposes.

Critics of the prisoner swap have argued that money is fungible, so Iran could indirectly use the funds to finance terrorism by freeing up other financial resources despite the restrictions, as well as creating an incentive for future hostage-taking. The Biden administration has pushed back on assertions that the prisoner swap funding played a role in the Hamas attack and has emphasized that none of the $6 billion has been spent to date.

Secretary of State Antony Blinken told CNN’s "State of the Union" on Sunday that "no U.S. taxpayer dollars were involved" in the swap and noted that Iran has "from day one, under our law, under our sanctions, the right to use these monies from humanitarian purposes."

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A State Department spokesperson told FOX Business that the money "held in restricted accounts in Doha remains in Doha." They added, "Given the due diligence involved and complexity of what have to be specific humanitarian transactions through this channel, it will take likely years for Iran to spend down this money." 

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The Iranian government’s longstanding connection to terror groups has brought about a litany of sanctions against it from the U.S. and other countries in the years since the Islamic Revolution toppled the Shah in 1979.

Iran was first designated as a state sponsor of terrorism by the U.S. in 1984, and it continues to finance Hamas and Hezbollah, as well as other Middle Eastern terror groups to this day. Israeli Defense Minister Yoav Gallant has said that Iran provides about $100 million a year to Hamas, $700 million a year to Hezbollah and tens of millions of dollars to Islamic Jihad.

Iran’s support for terror groups extends to planning and training, typically through the Iranian Revolutionary Guard Corps and the Quds Force. The Wall Street Journal reported Sunday that Iranian security officials helped Hamas plan the attack, which killed around 900 Israelis in what was the most significant incursion of Israel’s borders since the 1973 Yom Kippur War.

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House Foreign Affairs Committee Michael McCaul, R-Texas, said on CNN’s "State of the Union" that Iran has "financed this every step of the way and they’ve trained these terrorists," while expressing concern about the $6 billion in funding future acts of terror even though he has not seen a link to the attack in Israel.

"I don’t think it played a part in this event. But it certainly could play a part in any future terror activities," McCaul said. 

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"If I were doing this, I would send humanitarian aid from South Korea, rather than wiring cash to Doha, and then trusting the ayatollah with that cash," McCaul said.