June 12, 2020 / 4:23 PM / 25 days ago

Iran to press South Korea to release blocked funds

DUBAI, June 12 (Reuters) - Iran called on Friday for South Korea to release billions of dollars in funds frozen because of U.S. sanctions.

“South Korea’s ban on Iran’s use of its central bank resources to buy basic goods, medicine and humanitarian items is in no way acceptable, and we expect the South Korean government to lift this restriction as soon as possible,” President Hassan Rouhani said, in remarks carried by state news agency IRNA.

He instructed the head of the Iranian central bank to follow up the matter through legal channels and international forums, IRNA said.

Rouhani did not cite a figure for the frozen funds, but the news agency Borna quoted Hossein Tanhayi, head of the Iran-South Korea chamber of commerce, as saying between $6.5 billion and $9 billion belonging to Iran was blocked in South Korean banks.

“Iran intends to take legal action against this ..., but this is not an easy path and it is time-consuming,” Tanhayi said.

South Korea’s imports of Iranian oil have been zero since May 2019, when the United States revoked waivers which had allowed some countries to continue buying Iranian oil without falling foul of U.S. sanctions.

The United States re-imposed sanctions on Iran in 2018 after President Donald Trump withdrew from a deal to lift them in return for curbs on Iran’s nuclear programme. Tehran calls the U.S. sanctions economic warfare.

The Iranian Foreign Ministry said in May that preliminary steps had been taken to set up a channel to allow Iran to use funds in South Korea to buy humanitarian goods. Weeks later South Korea’s Foreign Ministry said Seoul was sending $500,000 worth of medicine to Iran.

In March, France, Germany and Britain exported medical goods to Iran in the first transaction conducted under a trade mechanism set up to barter humanitarian goods and food without breaching U.S. financial sanctions. (Reporting by Dubai newsroom Editing by Peter Graff)

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