Bank Mellat’s Seoul Branch Resumes Operations

Bank Mellat has officially restarted work in South Korea through its branch in Seoul, Iran’s ambassador to the East Asian nation announced.

“The bank has recently opened its first letter of credit … [However] it will still take a while for the branch to go back to its previous [pre-sanctions] state, but we are on the right track,” Hassan Taherian also told ICANA, the official news outlet of the Iranian Parliament.

Late May, Bank Mellat CEO Hadi Akhlaqi had announced that the bank has obtained the license to reopen its Seoul branch, noting that Bank Mellat is the only active Iranian bank in South Korea allowed to open accounts in won (the South Korean currency) and engage in trade with Iran.

As Taherian outlines, Bank Mellat’s Seoul branch was very active a few years ago, but was forced to close down as Iran was slapped with international sanctions mainly focused on its financial system.

“We engaged in negotiations and fortunately the Koreans facilitated the necessary permits and the required coordination was done, so now we are moving toward a complete reactivation of Bank Mellat in South Korea,” the ambassador said.

Taherian also referred to the $8 billion finance for Iranian projects by the Korea Export–Import Bank (Kexim), which was finalized two weeks ago when Economy Minister Ali Tayyebnia met with Kexim President Choi Jong-ku in Seoul and discussed financing Iranian construction and infrastructure projects in energy, petrochemical, oil and health industries.

“There was a clause in the agreement about the possibility of the return of sanctions (snapback), which had created cause for concern,” the envoy said, adding that it has now been resolved.

According to Taherian, Iran’s exports to South Korea amounted to $4.6 billion in 2016 while imports stood at $3.7 billion.