Seoul and Washington are attempting to unfreeze the $7 billion held in South Korea by Iran
As Seoul and Washington work to strengthen their economic and diplomatic ties with Tehran, they are debating how to release the $7 billion in Iranian cash that are being held in the Asian nation of South Korea.
According to diplomatic and government sources in Seoul on Monday, working-level conversations to unfreeze the Iranian cash are being conducted by Korean and US government representatives under the direction of Washington.
If the release goes through, it will be subject to strict requirements that Iran utilize the money strictly for government expenses like paying UN dues and buying COVID-19 vaccinations.
According to a Seoul government official, “if everything goes according to plan, we expect our tense relationship with Iran to significantly improve.”
In order to monitor the flow and use of the assets, sources claim that if negotiations are successful, the frozen monies will be able to be moved to Iranian bank branches in adjacent Middle Eastern nations rather than straight to Iran.
A transfer of Iranian funding to Korea, according to certain Middle Eastern local media, would be subject to Tehran releasing a US captive detained there on suspicion of spying and capping uranium enrichment levels used in nuclear research at 60%.
Iran’s money has been frozen at two Korean commercial banks, Woori Bank and the Industrial Bank of Korea, since the Donald Trump administration withdrew from the Joint Comprehensive Plan of Action (JCPOA), the 2015 Iran nuclear deal, and reimposed sanctions on Iran as a result. This has strained relations between South Korea and Iran in recent years.
The highest sum of Iranian cash known to have been blocked abroad is the $7 billion payable for Korea’s oil purchases.
In the past, South Korea was one of Asia’s top consumers of Iranian crude oil.
Korean oil corporations used the Iranian central bank account in Seoul to pay for their oil purchases in Korean won prior to the reinstatement of US sanctions against Iran.
The payments to Iranian oil exporters were then cleared by the Iranian central bank using the Iranian rial, which is its own currency.
Iran has repeatedly sought the release of its cash that have been frozen in Korean institutions as a result of US sanctions, alleging that Seoul is keeping the monies “hostage.”
Tehran once encouraged a boycott of Korean goods in Iran, including targeting Samsung Electronics Co. and briefly seizing a Korean oil tanker, when tensions between Iran and Korea soured.