Iran, South Korea to Discuss Frozen Assets

EghtesadOnline: South Korea and Iran plan to hold working-level consultations next month in Seoul to discuss ways to untangle yearslong disputes over Tehran's assets frozen here under US sanctions, an informed source said Saturday, Yonhap reported.

News ID: ۷۸۷۷۰۱

30 January 2022

Bilateral relations remain frayed over $7 billion in Iranian funds locked in two Korean banks due to the US sanctions, imposed after former president Donald Trump in 2018 withdrew from a 2015 nuclear deal.

The thorny issue has drawn renewed attention, with talks to revive the 2015 accord standing at a critical phase, as Iranian officials demand sanctions relief for an agreement.

Seoul officials say the proposed working groups are expected to go over details of a potential money transfer once sanctions are lifted and also discuss other aspects in the event of a no deal.

"The working groups are expected to mainly discuss details of the payment method of the Iranian assets if the US grants sanctions relief," the source told Yonhap News on the condition of anonymity. "They could talk further on the possibility of resuming oil imports from Iran once sanctions are lifted."

Iran, which sits on the world's fourth-largest oil reserves, had been a key oil supplier to resource-poor South Korea and in turn imported industrial equipment, household appliances and vehicle parts from Seoul.

South Korea imported $7.8 billion worth of oil from Iran in 2017, but it has stopped Iranian purchases since 2019 due to the US restrictions that ban the Islamic republic's oil exports, according to the data by the Korea International Trade Association.

Seoul insists that the fate of the frozen assets apparently depends on the negotiations between Iran and the world powers because it needs the approval of the US Treasury Department's Office of Foreign Assets Control to be released.

Tehran, however, says that the government in Seoul has to unfreeze Iran's frozen funds, regardless of the outcome of the talks in Vienna, as Iranian officials believe unilateral US sanctions cannot justify Korea’s delays in repayment of its debts to Tehran.

South Korea's hesitation in repaying its debts to Iran has intensified the negative impacts of unilateral sanctions, the two country's bilateral trade. According to the Trade Promotion Organization of Iran, the figure has decreased from $8 billion in the fiscal year to March 2018 to $460 million during the first three quarters of the current Iranian year that ends in March.