May 27, 2020 12:12 UTC
  • South Korea ‘stonewalling’ Iran attempt to use oil money

South Korea is holding the largest sum of Iran’s oil money frozen illegally under US pressure and yet it is reportedly stonewalling attempts to repatriate it at a time when the Islamic Republic badly needs the billions of dollars to put its economy in order and fight a new coronavirus outbreak.

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 the illegal US sanctions imposed on Iran’s oil industry in November 2018.

There are no official figures on the amount of the money being held, but some sources have put it in the range of $7 billion, Iran’s Etemad daily newspaper reported on Wednesday.

Last December, Seoul-based Chosun Ilbo newspaper cited officials as saying that Iran’s Foreign Ministry had called in the South Korean ambassador to demand payment of 7 trillion won ($6 billion) for oil it sold to the Asian country.

According to the paper, Iran expressed “strong regret” over Seoul’s failure to complete the payment, which has been deposited at two South Korean banks without being transferred to Iran’s central bank for years. It added that other Iranian authorities including the central bank also complained.

A South Korean Foreign Ministry official said at the time the Iranian side had expressed its position that it hoped for the humanitarian trade to be resumed. South Korea, the official said, was in talks with Iran and the US frequently so that the shipments of humanitarian goods like medical supplies could be resumed using the won-based transaction system.

South Korea sent a delegation to Tehran last November and explained that the country would cooperate with the US to successfully complete transfer of the payment, it added.

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, with shipments likely to begin the following month.

The report said Seoul had gained the General License No. 8 from the US government -- a mechanism to authorize certain humanitarian transactions with Iran even if they involve Iran's central bank subject to US sanctions.

Apart from the license program, South Korea was pushing for the Korean Humanitarian Trade Arrangement (KHTA) to facilitate humanitarian transactions with the Islamic Republic, it said.

However, Etemad daily said “Despite the promising news, Seoul is still stonewalling the way for Iran to collect the debt.”

Last month, Iran’s Health Ministry said South Korea had rejected a SWIFT payment request by Tehran for purchase of coronavirus testing kits over the US sanctions.

Ministry Spokesman Kianoush Jahanpour released a document that showed a Saudi-funded TV had asked a Korean bank to reject the request.

"As a result, the Korean bank rejected Iran's request and the kits were not delivered to Iran," he said.