In his recent reaction to Seoul’s blockage of Iranian assets, President Hassan Rouhani said South Korea’s seizure of Iranian assets “is by no means acceptable and we expect Seoul to lift the restrictions as soon as possible.”

South Korea’s somber consideration of this just demand should allow Iran to buy the basic humanitarian supplies to fight the Covid-19 pandemic utilizing these frozen accounts.

The U.S. administration is now frugally following the step-by-step brochure on “maximum pressure” campaign. Certainly, the Iranian nation is suffering from this economic suffocation. Remember “I can’t breathe”. This is Trump administration’s true intention for Iran, by hook or crook to topple the regime.

The U.S. campaign to use its own financial regulations to pressure Iran and other countries with economic ties with the Islamic Republic has been a mix of implicit threats backed by explicit action. An example at hand is South Korea, once one of the main buyers of Iranian crude and one of the key trading partners of Iran.

When U.S. President Donald Trump withdrew from the Iran nuclear deal in May 2018, his administration adopted a new and more aggressive “maximum pressure” strategy against Iran and every country with economic ties with Tehran. Under pressure of threats from the U.S., many countries stopped buying Iranian crude. 

Initially, the Trump administration granted six-month waivers to seven countries importing crude from Iran, including India and South Korea and China. The waivers ended in May 2019 and the payments for the Iranian crude accumulated in the buyers’ banks.
Another example of U.S. sanctions at hand in India. After sanctions were lifted under the 2015 nuclear deal, Iran managed to unlock over $6.4 billion of oil payments trapped in Indian accounts, using European banks as a clearing agent, Bloomberg reported. 

CBI

The Central Bank of Iran (CBI) has filed lawsuits in Europe against financial companies that have withheld its money on the basis of court orders issued in the U.S.

Abdolnaser Hemmati, the head of the Central Bank of Iran, said on May 27th the actions of banks in South Korea are preventing Iran from using the money to buy foods and medicines, trade that is exempt from U.S. sanctions.

Hemmati said Iran could launch legal action to gain access to the funds without naming any specific bank. “It is appalling to see the Korean banks have conveniently neglected their obligations, common international financial agreements, and decided to play politics and follow illegal and unilateral U.S. sanctions,” he said.

Chamber of commerce

Hossein Tanhaee, chairman of the Iran-South Korea Joint Chamber of Commerce, was quoted by ILNA on Wednesday that an agreement between the two countries will allow South Korea to unblock part of Iran’s frozen money, pointing out that “the Korean side is not going to return in cash but in form of medical and pharmaceutical items.”

South Korea’s success in dealing with the early stages of Covid-19 pandemic has been exemplary. Early speedy testing pads, respirators, advisers, should be some of the items that can be purchased from the Iranian frozen block of money. Medical equipment, medicine, ICU beds, hospital worker suits, etc. remain in dire supply in Iran.

Tanhaee did not mention the amount of this transaction but said “with the coordination of the Ministry of Health and the Central Bank we will be able to return a large portion of the money.”

On June 12, Tanhaee said that “the amount of Iran’s blocked assets in South Korea is between “$6.5 billion and $9 billion, where South Korea was supposed to release $50 million, but they didn’t”. 

Moreover, he added that “South Korea not only doesn’t release Iranian currencies, but the Korean Woori Bank is demanding Iran to get paid for its maintenance, while Seoul is using and working with Iranian currencies”.

Foreign Ministry

Iran’s Foreign Ministry says South Korea is about $7 billion in arrears from oil export revenue from the period before the Trump administration re-imposed penalties on Iran’s crude sales. Arguing that Seoul is buckling to pressure from its U.S ally and illegally withholding funds that Iran needs to counter West Asia’s worst coronavirus outbreak.

In May, the Iranian Foreign Ministry had said that preliminary steps were taken to set up a channel to allow Iran to use its 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 a meeting with the South Korean Ambassador to Tehran, Yu Jang Hian last year before the pandemic, Hemmati complained about the obstacles created by the South Korean banks in the way of Tehran-Seoul trade relations, saying the source of Iranian assets is clear. He added that the Korean banks should stop taking advantage of its sources under the pretext of U.S. sanctions.

If South Korea continues to block the Iranian frozen funds then it is a clear indication that Seoul is continuing to put U.S. interests first, and with that South Korea is forfeiting its sovereignty and its relations with other nations.

By doing so South Korea will sacrifice Iranian nation’s trust in that country’s products and technology which was gained in recent decades and in the long run Seoul will sacrifice its interests in the Iranian market.