Business And Markets

US Agrees on Partial Release of Iran Assets in South Korea

US Agrees on Partial Release of Iran Assets in South Korea
US Agrees on Partial Release of Iran Assets in South Korea

Washington has reportedly agreed in principle on the partial transfer of Iranian funds held by South Korean banks under US sanctions to Switzerland. 
A senior official at the Foreign Ministry in Seoul told reporters on Thursday that the US has in effect agreed to the plan, but added further discussions remain on the method of transfer, Korean news outlets reported. 
Earlier in the week, the Governor of Central Bank of Iran Abdolnasser Hemmati said Iran and South Korea have reached an agreement on using "a part" of Iran’s foreign currency assets frozen in the Asian country. 
The two sides agreed on the destinations for the transfer and that the CBI had informed Seoul of the amount it wants to be transferred.
Soon after, the foreign ministry said Tuesday the Iranian assets locked in South Korea will be released after consultations with the United States.
Citing the ministry officials on Thursday, South Korea’s official KBS World Radio said that the governments of South Korea and the US have discussed wiring the Iranian assets to Switzerland, from where it can be sent back to the Middle East country via the Swiss Humanitarian Trade Arrangement (SHTA).
SHTA seeks to ensure that Swiss-based exporters and trading companies in the food, pharmaceutical and medical sectors have a secure payment channel with a Swiss bank, through which payments for their exports to Iran are guaranteed.
It was created in January 2020 after the US Treasury Department granted waivers for using a portion of the Iran's central Bank overseas resources to import basic goods and pharmaceuticals.
The BCP Bank of Switzerland is reportedly authorized to handle SHTA transactions. Two Iranian banks are also involved, namely Saman Bank and the Middle East Bank.
Talking to reporters on Wednesday, Hemmati said Iran is supposed to receive at least $1 billion of its frozen assets in the first step.  
Tehran has been pressuring Seoul to unblock more than $7 billion of its assets frozen in two South Korean banks due to the US economic blockade. Hemmati said the CBI has started "extensive talks" with several other countries in which Iranian assets are blocked, including Oman, Iraq and Japan. 
Last Monday Hemmati met Kazutoshi Aikawa, Japan's ambassador to Tehran to discuss ways to unlock Iran's assets worth $1.5 billion. 
As one way the CBI can tap into the blocked fund, the Japanese diplomat proposed using part of the money to import Covid-19 vaccine into Iran.   

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