Iran: South Korea releasing $1B frozen by US sanctions

23 Feb 2021

Iran: South Korea releasing $1B frozen by US sanctions

By Joseph Choi

February 23, 2021

An Iranian government spokesperson on Tuesday said that South Korea will be releasing $1 billion in frozen assets as an “initial step” in resolving a dispute between the two countries.

Bloomberg reports that Ali Rabiei, spokesman for Iran’s government, made the remarks in a news conference Tuesday. Iran has stated that it seeks to use the funds to purchase medicine for the coronavirus pandemic.

According to Rabiei, there is currently $7 billion to $10 billion worth of oil payments held in South Korea. Bloomberg reports that Rabiei linked the release of Iranian funds to the recent seizure of a South Korean oil tanker.

The Iranian government seized the Hankuk Chemi oil tanker in January on allegations of environmental pollution, Al Jazeera reports. This was the first time in more than a year that Iran had seized a major vessel, and many international commentators felt it was done in response to the frozen funds, which Iran has denied.

The 19-person crew was released by the Iranian government in early February.

“The two sides ... shared the view that the release of the sailors was an important first step to restore trust between the two countries and they will work to resolve the issue of frozen Iranian assets in South Korean banks,” South Korea’s Ministry of Foreign Affairs said in a statement at the time.

Rabiei reportedly said that similar discussions are happening in Japan, Iraq and Oman regarding the release of Iranian assets kept in those countries as well.

Banks have refused to handle Iranian funds, Bloomberg notes, due to fear of violating U.S. sanctions against Iran. This has effectively blocked Iran from accessing its funds kept overseas.

The Hill has reached out to the State Department for comment.