Tehran Pushes Seoul to Release Its Tapped Billions
IRAN NEWS ECONOMIC DESK
TEHRAN – Iran is escalating its pressure on South Korea to release billions of dollars of oil-export revenue, arguing that Seoul is buckling to pressure from its U.S. ally and illegally withholding funds needed to counter the Middle East’s worst coronavirus outbreak.
Abdolnaser Hemmati, the Governor of the Central Bank of Iran, said the actions of banks in South Korea were preventing Iran from using the money to buy foods and medicines, trade that’s exempt from U.S. sanctions.
“It is appalling to see that Korean banks have conveniently neglected their obligations, common international financial agreements, and decided to play politics and follow illegal and unilateral U.S. sanctions,” Hemmati said in a written response to questions. Iran could launch legal action to gain access to the funds, he said, without naming the lenders in question.
Hemmati also didn’t elaborate on the course of action that Iran may take. After sanctions were lifted under the 2015 nuclear deal, Iran the following year managed to unlock over $6.4 billion of oil payments trapped in Indian accounts, using European banks as a clearing agent. The central bank has also filed lawsuits in Europe against financial companies that have withheld its money on the basis of court orders issued in the U.S.
Hemmati declined to say whether he had received an update from the IMF on the loan application. He said Iran is “weathering” the impact of the virus and even expects to see “moderate” economic growth by the end of the year.
Returning to South Korea, he said the two countries have been working on a special trade vehicle, similar to that established with the European Union, which would allow Iran to complete humanitarian transactions using the money locked in Korean banks.
The U.S., which abandoned the 2015 nuclear deal two years ago, has sought to “stonewall” the plan, according to Hemmati. President Donald Trump’s so-called “maximum pressure” strategy against Iran aims to force its leaders into renegotiating the nuclear accord and ending their support for Hezbollah and Iraqi militias.
The EU mechanism — known as Instex — provides European companies with a trading vehicle to sell goods and services to Iran without using dollars, routing transactions through U.S. banks, or moving money across the Iranian border. But its impact has been limited due to companies’ fears over the reach of American penalties.
“Should Korean banks not adhere to their international agreements with us, we reserve our rights to take legal actions under international laws,” Hemmati said.