Business And Markets

Talks Continue to Unlock Forex Assets Held by Seoul

Talks Continue to Unlock Forex Assets Held by Seoul
Talks Continue to Unlock Forex Assets Held by Seoul

South Korea is in consultations with Iran over the proposed use of Tehran's funds held under US sanctions to pay dues to the United Nations and regain its voting rights, Korean government sources said Thursday, Yonhap reported. 
Last week, the UN notified Iran that it would immediately lose its voting rights for the arrears, reportedly worth $18.4 million, along with seven other UN member states, under the UN Charter.
Iran has more than $7 billion in funds for oil shipments frozen at two South Korean banks -- the Industrial Bank of Korea (IBK) and Woori Bank -- due to the US economic blockade. Iran has demanded release of the money, a major sticking point in bilateral relations.
The two sides are seeking to capitalize on the assets to handle the problem of the delinquent UN dues, according to the sources who spoke on condition of anonymity.
"Our government is in consultations with the Iranian government in that regard and is in related consultations with the US and the UN as well," one of the sources told Yonhap News Agency.
Iran's Foreign Ministry confirmed that it is looking for "a safe channel" for a faster payment of the UN membership fee. 
In 2021, the UN deprived Iran of its voting rights for failing to pay its dues. The US agreed to enable Tehran to use some of the funds held at the IBK for the payment of a minimum amount of fee for the year and the restoration of its voting power.
Iran has repeatedly called on Seoul to release its forex assets. Recently, Korea’s first deputy foreign minister, Choi Jong-kun, and his Iranian counterpart, Ali Bagheri Kani, held talks on the subject in Vienna, South Korea's Foreign Ministry said Friday, with the thorny bilateral issue on the table for the talks aimed at restoring the 2015 Iranian nuclear deal.
During the meeting, Choi expressed hope for an early agreement on the nuclear deal, ditched by the Donald Trump administration in 2018, and the two sides shared the understanding that Tehran's frozen assets should be released soon. 
They also agreed to push for working-level consultations on details related to a money transferring process.
The fate of the frozen assets apparently depends on 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, according to Seoul officials.
Bagheri Kani, however, said that the Korean government should unfreeze the funds, regardless of the outcome of the talks in Vienna, ISNA quoted him as saying. 
"The unilateral US sanctions cannot justify Seoul’s delays in repayment of its debts to Tehran. South Korea's refusal to pay the debts to Iran is against the law and inexcusable; it would be a dark spot in the history of relations between the two countries," Bagheri said.
South Korea was a major buyer of Iranian oil before the sanctions. Iran accounted for almost 15% of its oil imports at the time.  
Non-oil trade between the two sides has also dropped significantly. According to the Trade Promotion Organization of Iran, it plunged from $8 billion in the fiscal year to March 2018 to $460 million in the first three quarters of the current Iranian year.

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