Seoul Seeks to Diversify Relations With Tehran

South Korean Ambassador to Iran Kim Seung-ho on Monday discussed different aspects of relations and priorities between the two major trade partners Iran and South Korea, especially in the new climate after the removal of nuclear sanctions against Iran.

In May, South Korean President Park Geun-hye paid a landmark state visit to Tehran, which focused on boosting bilateral economic cooperation. The visit–the first by a South Korean president in more than half a century–represented South Korea’s efforts to tap into business opportunities in Iran.

“I believe Iran can become a land of opportunity for many South Korean firms,” Park told reporters on a plane back to Seoul.

During her visit, the two countries signed dozens of preliminary deals that could lead to contracts worth tens of billions of dollars. Seoul hopes the signed memoranda of understanding could pave the way for South Korean companies to eventually win massive infrastructure projects underway in Iran.

South Korea’s presidential office has described the MoUs as the “biggest-ever economic accomplishment”.

Kim was interviewed by the online English newspaper The Seoul Times. Excerpts follow:

What is your top priority as the ambassador of South Korea to Iran?

As an ambassador, my major priority is to stabilize and make balanced relations. Iran and Korea are both big countries. Our relations have been [traditionally] focused on only several areas … We have to develop cooperation in new fields to diversify our relations and make stronger ties. If we have stronger and diversified relations, we will have stabilized and balanced relations. It is our major priority.

How did the South Korean president’s visit to Iran affect the political and economic ties between the two countries?

Her visit infused a great moment in our relations, not only in political and economic areas, but also in cultural areas. The two sides signed more than 60 documents.

In culture area, it was agreed to establish Korean Culture Center in Tehran next year, which is also declared as year of cultural exchange for Korea and Iran. She visited this time only Iran, while Korean presidents and presidents of other countries [often] visit many countries in one travel. This means how important Iran is in the Korean president’s view … [Following the visit it was agreed that] $25 billion be lent to Korean companies who participate in Iranian projects in any fields.

Has there been any priority set for cooperation between the two countries?

Oil, infrastructure, railroad, hospital and pharmaceutical, petrochemical and cultural activities in Iran would be reliable to be selected to get that fund.

What barriers are in the way of the development of ties between the two countries?

So far, I do not think any obstacle. It depends on the will of the two countries’ governments and companies.

After the signing of JCPOA [the Joint Comprehensive Plan of Action, the formal name of the nuclear deal between Iran and the West], the banking system of Iran is bound to connect with those of other countries. Iranian officials say Iran’s banking system is linked with SWIFT, but South Korea does not apply that. Is that so?

Perhaps you mean Korean banks cannot send foreign currency to Iran despite linkage to SWIFT. Korean banks have to be intermediated by European banks for sending euro to Iran. However, European banks so far are very reluctant to do that. Korean banks are very much eager to see that this problem will be solved soon.

While the South Korean government faces problems transferring money to Iran, how can you implement the project of building a large cultural center in Iran? How can you finance the project?

In Korea, we have Iranian accounts for Korean currency (won)… We import Iranian oil and we put that money in Iranian accounts in Korean banks. Iran buys and imports Korean goods, pays to Korea, then Korea gets the money from Iranian banks in Korea … So for the time being, we use that mechanism, but it is not convenient. This is why the Korean government wants really eagerly banking ties between Iran and Europe will soon be normalized.

One year after the implementation of JCPOA, how much has the trade volume between the two countries changed?

Our import of Iranian oil has already doubled. Our export to Iran does not show a significant increase despite the removal of sanctions because of heightened competition in the Iranian market.

What areas are more probable to receive joint investments economically and industrially between the two countries?

I think there are plenty of possible areas for joint venture. In order to diversify our relations, in order to stabilize our relations, the Korean government wants to have as many joint ventures as possible. But what is more important in order to invite foreign investment, [is that] you should show them that if they put their money in Iran, their investment will be profitable. You have to persuade them and also the [Iranian] government should make general friendly environment for foreign investment. Money goes to where it is welcomed and stays where it is well treated.

What measures have been devised to further ease the trades between Iran and South Korea?

Customs authorities of Iran and Korea are working hard to facilitate customs procedures for each other’s goods and exchange relevant information. The more effective way would be Iranian accession to WTO, which Korea supports.

Are there ongoing negotiations to lower the tariffs between Iran and South Korea?

There is no ongoing negotiation in that regard, that is why Korea supports Iranian accession to WTO.

Over the past year, what measures were thought of to ease the visa issuance for tourism and commerce?

We received Iranian visa applications only for two hours per day, now we receive that application all day round from eight o’clock to four o’clock ... Before it took five days to get a Korean visa, but now it takes only one day. If you apply today, you will get a visa tomorrow.

In the past, seven additional documents were needed. Now you have to provide only two documents: recommendation letter and your employment certificate. When it comes to tourism visa, in the past, only two operators processed Korean tourism visa applications. Now we expand tourism operators up to 10.

You recently paid a visit to Markazi Province and the city of Arak. Has any agreement been inked?

I didn’t sign any document. I explained Korea’s strategy to strengthen mutually beneficial relations with Iran to the businessmen of Markazi and encouraged them to expand business with Korea.

What has been done for the marketing of Iranian saffron, handicrafts and carpet in South Korea? Can you contribute to these marketing processes?

The Iranian side has to do the marketing in Korea for these items. So far, we do not have any restrictions to import these products. Iranian carpet and Iranian caviar are very much well-known in Korea. So I think there are plenty of potential in the Korean market.

Is it possible to launch a direct flight between the two countries?

Recently two civil aviation authorities agreed to allow 11 flights per week if Iranian and Korean airlines start services. Now it is private companies’ decision to start direct air services.