Tehran has confirmed that the process of releasing the $6 billion worth of Iranian funds, which have been unlawfully held in South Korea due to US sanctions, is currently in progress.

The Iranian Foreign Ministry issued a statement on Thursday in response to widespread media reports about a potential prisoner swap agreement between Iran and the US, which includes the release of these funds.

The statement assured that Iran has received adequate guarantees for the US's commitment to fulfilling its obligations regarding the funds. The ministry emphasized that the release of these funds has always been a priority and that they had been unlawfully blocked due to concerns from overseas banks related to US sanctions.

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Reports indicate that the release of these funds is part of a broader prisoner exchange deal between Iran and the US, where both sides would release several detainees held by each other.

In addition to the fund release, the Foreign Ministry has been actively pursuing the release of Iranian prisoners as part of its inherent duties. These prisoners were arrested under the pretext of violating US sanctions and have been held in US prisons.

The statement affirmed that the release of these prisoners is imminent and noted that those designated for release by the US are still on Iranian soil. However, reports suggest that the release of the detainees is contingent upon the transfer of Iranian funds to specific accounts designated by Iran.

Iran's Deputy Foreign Minister, Ali Bagheri Kani, also confirmed through a tweet on Thursday that the process of releasing the funds is underway and that the impending release of Iranians detained by the US will occur within the same framework.

The process of releasing billions of dollars of Iranian assets, illegally seized by the U.S. for several years, has commenced. Tehran has received the guarantee of Washington's commitments. The release of several Iranians who were illegally detained in America is in this context. https://t.co/2hH8B2k8A8

— علی باقری‌کنی (@Bagheri_Kani) August 10, 2023

What's behind S. Korea and the frozen funds?

Iranian officials have over and over again said the South Korean government was obliged to unfreeze the country's funds, stressing that unilateral sanctions from the United States could not justify Seoul's inaction in repaying its debts to Tehran.

Iran and South Korea had previously agreed to use the funds for the latter to purchase humanitarian items from Iran, which was later prevented due to pressure by Washington.

Seoul's illegal compliance with the unilateral sanctions was met with restrictions on imports from South Korea as a retaliatory measure.

Seoul did circumvent the sanctions in early 2022, however, paying $18 million in frozen Iranian funds to pay Tehran's UN dues and restore the country's voting rights.

The US Department of State announced last year that it had issued an exemption to some of Iran's blocked funds in South Korea and Japan, allowing them to import Iranian oil. The waiver, signed by Secretary of State Antony Blinken, allows the "transfer of Iranian funds in restricted accounts to exporters in Japan and the Republic of Korea."