WASHINGTON D.C. -- The Obama administration is acknowledging its transfer of $1.7 billion to Iran earlier this yearwas made entirely in cash, using non-U.S. currency.

A Treasury spokeswoman says the cash payments were necessary because of the “effectiveness of U.S. and international sanctions,” which isolated Iran from the international finance system.

The $1.7 billion was the settlement of a decades-old arbitration claim between the U.S. and Iran.

An initial $400 million cash delivery was sent Jan. 17, the same day Tehran agreed to release four American prisoners.

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The Obama administration had claimed the events were separate, but recently acknowledged the cash was used as leverage until the Americans were allowed to leave Iran.

The remaining $1.3 billion represented estimated interest on the Iranian cash the U.S. had held since the 1970s.