The United States and Iran are in the process of orchestrating a deal that will result in the release of American hostages. They will reportedly be exchanged for the unfreezing of around $6 billion in Iranian assets held in South Korea, which will technically be reserved for humanitarian purchases, and the release of unspecified Iranian prisoners convicted of crimes in US courts. While the freedom of wrongfully detained US citizens should be celebrated, much of the controversy over this agreement has to do with the lack of a multilateral strategy to deter hostage-taking.
The Islamic Republic has engaged in hostage diplomacy since the birth of the Islamic revolution in 1979. Interestingly, Ali Khamenei, the country’s future supreme leader, did not anticipate the seizure of the US embassy and its personnel in 1979 at the outset. As recounted by Mehdi Khalaji in his new biography of Khamenei, which is entitled, The Regent of Allah: Ali Khamenei’s Political Evolution in Iran, Khamenei was on a Hajj pilgrimage in Saudi Arabia along with Ali Akbar Hashemi Rafsanjani, Iran’s future president, when the hostage crisis started.
Rafsanjani claimed the two men were surprised and said, “It was not our policy.” But ambition quickly changed his views, as well as the founder of the Islamic Republic’s, Ayatollah Ruhollah Khomeini, who exploited the situation to consolidate power. As a deputy defense minister and member of parliament, Khamenei later visited the hostages at the height of the crisis for domestic propaganda, using a fake pretense of looking after their well-being. What was once “It was not our policy” quickly became state policy in the Islamic Republic.
Deals resulting in the unfreezing of Iranian assets in exchange for American hostages date back to the dawn of the Islamic Republic. The Algiers Accords of 1981, which secured the release of the seized fifty-two US embassy employees in Tehran after 444-days, stated, “the United States will restore the financial position of Iran, insofar as possible, to that which existed prior to Nov. 14, 1979.” This resulted in a decades-long vicious cycle of unfrozen funds begetting the freedom of Americans, which only incentivized the Islamic Republic to replenish its prisons by arresting Western nationals on bogus charges in search of further concessions, as its malign behavior increasingly threatened international peace and security. There have been a couple instances since 1979 where Americans were released without the use of funds, but they have been few and far between.
In 2016, the Barack Obama administration agreed to a $1.7 billion debt settlement over arms given to pre-revolutionary Iran to liberate another tranche of hostages. In 2022, the United Kingdom (UK) structured a similar arrangement to free Nazanin Zaghari-Ratcliffe and Anousheh Ashoori to repay a £400 million tank debt, which would be ring-fenced for humanitarian purposes. However, neither of these episodes stopped further hostage-taking—even with conditions on how Iran could use the money. Only months after the hostages were welcomed home in the United States in January 2016, Tehran detained Xiyue Wang, a Princeton University graduate student, that August. Likewise, Europeans and Americans were imprisoned in Iran following the British agreement in 2022, and the Islamic Republic has plotted to kidnap UK-based individuals multiple times since then. Thus, the evidence shows that restrictions on the use of assets do not deter future hostage-taking by the Islamic Republic.
In fact, it makes things worse, as the US agreement to unfreeze around $6 billion in Iranian assets in South Korea represents a significant increase from the previous $1.7 billion deal in 2016. Money is fungible and this arrangement will reduce strains on the Iranian budget and free up additional resources to spend on repression and terrorism. Iran’s militias in Syria have already received a raise due to the lax enforcement of US sanctions, which continues amid reports of a broader nuclear understanding with Tehran. The Iranian government is witnessing once again that it pays to take US nationals hostage.
There is also a history of the Islamic Republic exploiting humanitarian exemptions under US law, as happened when the US government indicted Turkey’s Halkbank in 2019 for facilitating fraudulent food and medicine transactions. While the channel in the current agreement will be different, that experience is a reminder of the need for enhanced US vigilance.
What can be done?
The most acute issue remains the absence of a broader strategy to deter and prevent the Islamic Republic’s hostage policy model. When asked about what it has done to avoid future hostage-taking, the Joe Biden administration regularly showcases the new “D” travel risk indicator, which is used to denote a warning of the chance for wrongful detention, and the Canadian-driven Declaration Against Arbitrary Detention in State-to-State Relations, which the US government has joined. But much more can be done.
After the death of Otto Warmbier as a result of North Korean captivity in 2017, the US government banned travel to the country. Under these restrictions, all US passports are invalid for travel to, in, or through North Korea unless there is a special validation from the secretary of state. However, travel to Iran is not placed under those same set of restrictions. The Biden administration and Congress should consider changing that status. It will not offer a complete solution to the problem, as those with dual nationality could still use their Iranian passports instead of their American ones. However, it would reduce the number of Americans traveling to Iran and therefore cut off opportunities for the regime to replenish its prisons (once emptied).
The United States should also work with its European allies to implement similar restrictions, as this is a problem the latter face as well, with around thirty European nationals still being held hostage. Those with extenuating circumstances can apply for special authorization to travel there on a case-by-case basis.
Secondly, the United States should be working with its allies and partners to develop a menu of penalties that will automatically be triggered the moment the Islamic Republic takes the next hostage. This should include diplomatic and economic penalties. There are over ninety foreign embassies in Iran and over ninety Iranian embassies worldwide. On the diplomatic side, a discrete number of Iranian diplomats should be declared personae non grata; ambassadors to Iran should be recalled en masse; and travel by former and current regime officials to foreign capitals should be severely restricted. There should never be a situation where a former health minister can travel to Canada while the Islamic Republic detains Canadian nationals, as happened in August. The same applies to the family members of Iranian officials who live freely in the West while the regime imprisons its citizens.
On the economic side, a ready-made package of sanctions should be imposed beyond piecemeal designations of officials implicated in hostage-taking. This should include US-allied countries banning Iranian airliners from using their airports, as said airliners have been complicit in Tehran’s drone proliferation to Russia for use against Ukraine. The US government could also launch a campaign to recruit as many countries as possible to sanction the Islamic Revolutionary Guard Corps (IRGC)—one of the primary instruments of Iran’s state hostage apparatus—as a terrorist organization.
The Biden administration claims the United States and Europe are realigned again on Iran after the US withdrawal from the Joint Comprehensive Plan of Action (JCPOA). But realignment must be applied to a policy end to have impact. Developing a transatlantic strategy to thwart hostage-taking is a tangible way for the US government to show that working with allies and partners can advance American interests.
Jason M. Brodsky is the policy director of United Against Nuclear Iran (UANI) and a non-resident scholar at the Middle East Institute’s Iran Program. Follow him on X: @JasonMBrodsky.
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