McConnell and Cotton introduce bill to freeze $6B in Iran funds

Senate Republican Leader Mitch McConnell (R-Ky.) and Sen. Tom Cotton (R-Ark.) on Wednesday unveiled legislation to immediately freeze $6 billion in Iranian funds that have been held in South Korea but are due to flow back to Iran because of a prisoner exchange deal with the United States.  

The Biden administration last month finalized a deal to grant a waiver to allow Iran to recoup $6 billion in assets that had been stuck in South Korea in exchange for the release of five American prisoners. The United States also agreed to release five Iranian nationals held in its custody. 

That deal is now getting strong bipartisan pushback in Congress after Hamas, an Iranian-backed group, killed more than 1,000 Israelis over the weekend.

McConnell and Cotton say they will seek unanimous consent to pass legislation to block Iran from accessing the $6 billion in funds.

“The path of resources, training, and lethal weapons from Tehran to terrorists throughout the Middle East is crystal clear. On Saturday, it enabled cold-blooded killers like Hamas and Palestinian Islamic Jihad to perpetrate the deadliest day of violence against Jews in decades,” McConnell said in a statement.  

“The civilized world must re-impose serious consequences on the regime that aids and abets murderous evil against innocent Israelis. The United States must lead that effort by our example, and freezing Iranian assets is an important first step,” he said.  

Cotton called Iran “the world’s worst state sponsor of terrorism.” 

He said the regime’s “proxies” have attacked dozens of American targets in the Middle East in recent years and demanded action from the Biden administration.  

“The civilized world must re-impose serious consequences on the regime that aids and abets murderous evil against innocent Israelis. The United States must lead that effort by our example, and freezing Iranian assets is an important first step,” Cotton said. 

The legislation is likely to pick up bipartisan support after three Senate Democrats facing tough reelection races next year said Biden should freeze the money transfer to Iran.  

The latest Democrat to call for freezing the Iranian funds is Sen. Sherrod Brown (D-Ohio), the chairman of the Senate Banking Committee.  

“As we work to hold anyone who supports terrorism accountable, the administration must freeze the $6 billion in Iranian assets,” Brown said.  

Brown, who is up for reelection next year in a state former President Trump twice won, said his committee will investigate the financing behind Hamas’s attacks on Israeli civilians and whether cryptocurrency was used to evade sanctions.  

Sens. Jon Tester (D-Mont.) and Joe Manchin (D-W.Va.) also called for freezing the Iranian funds Tuesday. 

“At a minimum, we should immediately freeze the $6 billion in Iranian assets and explore other financial tools we have at our disposal,” Tester said. “Moving forward, we need to ensure our ally Israel can defend itself from these ongoing deadly attacks against its civilians.” 

Treasury Secretary Janet Yellen said at a conference in Morocco on Wednesday that the administration is exploring all of its options to tighten sanctions, including holding up the $6 billion in funds that were part of the prisoner deal. 

“These are funds that are sitting in Qatar that were made available purely for humanitarian purposes and the funds have not been touched,” Yellen said. “I wouldn’t take anything off the table in terms of future possible actions.”