The United States and the Islamic Republic of Iran have brokered an ill-advised deal: Tehran has pledged to free American hostages in exchange for $6 billion of its frozen funds in South Korea and an undisclosed number of Iranians currently incarcerated in the United States. Additionally, evidence suggests that a previous release of $10 billion of Tehran’s funds in Iraq might be tied to this arrangement. Here are ten reasons why the deal is calamitous:

1. Encouragement of further hostage-taking. Tehran’s regime interprets the success of the hostage-for-cash scheme as validation of its strategy. Prominent officials, such as Mosen Rezaei, an advisor to Iran’s supreme leader and the former commander of the Islamic Revolutionary Guard Corps (IRGC), have been championing hostage-taking as a tactic to replenish the regime’s finances.

2. Contradicting successful precedent. The Trump administration secured prisoner releases without ransom payments, relying instead on just swaps. While exchanging people who have been guilty of nefarious activities such as sanctions-busting and proliferation with innocent American hostages is not ideal, it is still a better option than paying ransom. The new deal reverts to the Obama administration’s approach, which included a $1.7 billion payment alongside an exchange of prisoners.

3. Skyrocketing per capita ransom costs. The Biden administration’s $6 billion offer for five prisoners equates to $1.2 billion per hostage. If the entire financial package totals $16 billion, the ransom soars to $3.2 billion per hostage. This alarming rise from the Obama administration’s $340 million per hostage, already exorbitant at the time, underscores a worrisome pattern.

4. Incomplete hostage release. Despite the substantial financial concession, some hostages, such as Shahab Dalili, a U.S. permanent resident, and Jamshid Sharmahd, a long-time resident of California, remain unreleased. Responding to a question about why Dalili was not part of the deal, a State Department spokesperson said that Dalili had not been designated as a “wrongfully detained” person. Dalili, who has been in prison for seven years, was convicted by Tehran for the trumped-up charge of “aiding and abetting a hostile nation,” likely referring to the United States.

5. Reduced U.S. financial leverage. By offering Tehran $16 billion, the United States undermines its financial leverage over Iran. Rewarding the Iranian regime with hard currency and dismantling U.S. sanctions leave Washington with nothing but a military option as leverage to dissuade Tehran from going nuclear.

6. Strengthening of repression in Iran. The influx of funds would fortify the regime’s repression machine, which has weathered three extensive waves of protests over five years, leading to the murder, injuries, and imprisonment of tens of thousands. Tehran will use the newly found resources to reward its loyalists and security and intelligence forces, as it did after the sanctions relief provided by the 2013 interim nuclear deal, formally known as the Joint Comprehensive Plan of Action (JCPOA).

7. Demoralization of the pro-democracy movement. The Iranian opposition has called for demonstrations in Iran and across the globe on September 16, the anniversary of twenty-two-year-old Mahsa Amini’s murder by the morality police. The new deal—coming just a month before the anniversary—seemingly aligns the Biden administration with the regime, potentially deflating the opposition’s spirit.

8. Emboldening other hostile forces. Currently, Russia holds Americans hostage and China has shown its willingness to follow suit. Seen as a sign of weakness, the agreement may encourage adversarial nations and entities to capture Americans in order to exert influence over Washington.

9. Funding of terrorism and regional aggression. After the JCPOA’s finalization, Tehran increased funding for organizations such as the Ministry of Intelligence, the Ministry of Defense and Armed Forces Logistics, and the IRGC, all of which perpetrate Tehran’s terrorism and regional aggression. This precedent shows that the regime leverages sanctions relief to escalate its malign conduct throughout the Middle East.

10. Reliance on Qatar’s oversight. Qatar has been a key supporter of the Taliban, Muslim Brotherhood, Hamas, and other radical groups across the Muslim world. The U.S. reliance on Doha to supervise the deal, which purportedly requires Tehran to spend its newfound largesse only on non-sanctioned goods, thus raises concern, particularly given Tehran’s past finesse in bypassing sanctions.

The hostage deal warrants reassessment in light of these significant shortcomings. Should the Biden administration decline to reverse its policy, Congress must act and block the executive branch from using financial incentives to facilitate the release of American hostages globally.

Dr. Saeed Ghasseminejad is senior Iran and financial economics advisor at the Foundation for Defense of Democracies. Follow him on Twitter @SGhasseminejad.

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