Iran may take legal action to access funds in South Korea

Governor of the Central Bank of Iran Abdolnaser Hemmati says the Islamic Republic may launch legal action to access its funds in South Korea which is illegally withholding them under pressure from the US.

Korean banks are preventing Iran from using billions of dollars of its oil money to buy foods and medicines which are apparently exempt from US sanctions, Hemmati told news and financial information provider Bloomberg.

“It is appalling to see that Korean banks have conveniently neglected their obligations, common international financial agreements, and decided to play politics and follow illegal and unilateral US sanctions,” he said.

“Should Korean banks not adhere to their international agreements with us, we reserve our rights to take legal actions under international laws,” Hemmati added.

Iran’s Foreign Ministry said earlier this month that South Korea was about $7 billion in arrears for oil exported from the Islamic Republic before the Trump administration reimposed sanctions on Iran’s oil industry in November 2018.

South Korea was the biggest client of Iranian gas condensate with 300,000 barrels per day (bpd) on top of 100,000 bpd of crude oil, but the country stopped the imports even before US sanctions on Iran’s oil industry went into effect.

After sanctions were lifted under the 2015 nuclear deal, Iran managed to unlock over $6.4 billion of oil payments trapped in Indian accounts.

Even, the United States settled a long-standing Iranian claim at the Iran-US Claims Tribunal in The Hague, releasing $400 million in funds frozen since 1981 plus $1.3 billion in interest that was owed to Iran, in 2016 when Barack Obama was the president.

Iran and South Korea have been working on a special trade vehicle, similar to that established with the European Union, which would allow Iran to complete humanitarian transactions using the money locked in Korean banks.

Last month, state news agency Yonhap said South Korea had won US approval for the resumption of humanitarian exports to Iran under a special license program.

Iran announced earlier this month that it had received medicines valued at $500,000 from South Korea after two years of negotiations.

ME