US threatens to 'lock them up again' if swap deal funds are diverted by Iran

The US warned Iran on Wednesday that it could freeze funds provided as part of a swap deal with Tehran if they are diverted.

Washington is pursuing an arrangement to secure the release of five US citizens in exchange for $6 billion in Iranian funds, held in South Korea, which will be transferred to restricted accounts in Qatar where they will be earmarked for humanitarian transactions.

The White House said the funds will be subject to stricter legal restrictions as to when they were held in Korea, allowing the US to exercise oversight on their use.

"If Iran tries to divert the funds, we will take action and lock them up again," National Security Council spokesman John Kirby said at a news conference.

He said it is not a form of payment or ransom.

When asked if the US action might encourage Iran and others to detain Americans, Kirby responded: "Bad actors like Iran and like Mr. (Vladimir) Putin in Russia don't need any incentive to continue to look for ways to wrongfully detain Americans, it's been happening a long, long time".

Kirby clarified that the funds belong to Iran and not US taxpayers. "It's not a blank check. They don't get to spend it any way they want," he said.

The funds will go to a Qatari bank and Iranians can request withdrawals for humanitarian purposes, he said. "That money will then go to qualified vendors to purchase and deliver the food, and medical supplies into Iran."

As part of the deal, the US will also release five Iranian nationals who were detained on American soil.

The agreement has faced sharp criticism from Republicans, who argue that it could incentivize Iran to detain more Americans.