Business And Markets

40 S. Korean Exporters to Iran Paid $70m in Unlocked Money

40 S. Korean Exporters to Iran Paid $70m in Unlocked Money
40 S. Korean Exporters to Iran Paid $70m in Unlocked Money

Forty companies in South Korea that exported to Iran were paid part of their outstanding accounts last month.
“We understand there were 40 companies in total who were paid back some outstanding accounts,” a diplomatic source told the Korea JoongAng Daily.  
The companies were not paid for exports to Iran after fresh sanctions were imposed on Iran during the Donald Trump administration in 2018. The total outstanding amount is reportedly around $90 million. Of this, some $70 million was paid back as of last month.
The payments were possible after the US government in March allowed Iran to use its frozen funds in Korea to pay back the companies.  
An estimated $7 billion in Iranian forex assets is held in the Industrial Bank of Korea (IBK) and Woori Bank since September 2019.
The Central Bank of Iran had accounts in IBK and Woori Bank through an agreement between the two countries since 2010 to enable Korean companies to transfer payments to Iran. The government controls and monitors the funds going to Iran through this system.
Following the Trump administration’s sanctions, including on Iran’s oil export, his government granted a waiver for Korea's imports of Iranian oil that expired in 2019.
The recent payment from Iran to Korea does not mean that the frozen assets issue is resolved, the unnamed diplomatic source said.
“This recent news [on payments] is a separate matter from that of unfreezing the assets, on which negotiations are ongoing,” said the source.
Iran has called on Korea to unlock more than $7 billion of its forex assets held due to the US economic blockade, stressing doing so is a function of mutually respectful bilateral ties.  
Officials in Seoul said last month they were in talks with Washington on ways to release the money without violating the unilateral US sanctions.
The East Asian country had earlier agreed to release $1 billion of the assets -- a deal apparently foiled by US obstructionism. The Biden administration has been working to revive the 2015 Iran nuclear deal, which Trump pulled out of in 2018.  



Latest Waiver

The United States said Wednesday it was allowing Iran to use frozen funds to settle debts in South Korea and Japan, as talks drag on over reviving a nuclear deal that could see sanctions relief.
Secretary of State Antony Blinken had signed an earlier waiver and has extended it for 90 days as "these repayment transactions can sometimes be time-consuming," a US State Department spokesperson said, France 24 reported.
The state department said that it has been letting Japanese and South Korean companies receive payments from US-targeted Iranian accounts to pay for exports shipped before the Trump administration started enforcing sanctions in 2019.
The US maintains sweeping sanctions on Iran, meaning that companies that deal with many bank accounts in Iran can face legal penalties in the world's largest economy.
"To be clear: The waiver does not allow for the transfer of any funds to Iran."
The spokesperson said the goal of the waiver was to satisfy companies in Japan and South Korea, saluting the allies' "steadfast support for all US and UN sanctions."
South Korea and to a lesser extent Japan, both major tech exporters, hold billions of dollars in assets from Iran that have been stuck since Trump's economic blockade on Tehran.
Japan, South Korea and other US partners, notably India, begrudgingly stopped buying oil from Iran after Trump imposed the unilateral sanctions. 

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