Iran "Agreement on Transfer and Use of Assets Frozen in Han"

US Sanctions Likely to Open Path for Utilizing $7 Billion Frozen Funds in South Korea

Choi Jong-geon, First Vice Minister of Foreign Affairs, visited Tehran on the 11th (local time) to secure the early release of sailors detained in Iran and took a commemorative photo with Mohammad Javad Zarif, Iranian Foreign Minister. 2021.1.13 [Image source=Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] Reports have emerged that Iran and South Korea have reached an agreement regarding the transfer and use of Iranian frozen funds held in South Korea.

The Iranian state-run IRNA news agency reported on the 22nd (local time) that Abdolnaser Hemmati, Governor of the Central Bank of Iran, met with Yoo Jeong-hyun, South Korea’s ambassador to Iran, at the South Korean embassy the previous day and agreed on the use of frozen assets in South Korea.

IRNA quoted Ambassador Yoo as saying, "The South Korean government is prepared to take all necessary measures to use all Iranian assets in South Korea, and there are no limitations or restrictions on this."

Governor Hemmati stated, "Iran welcomes changes in other countries’ attitudes and enhanced cooperation," but added, "The Central Bank will continue legal procedures to seek compensation for South Korean banks’ refusal to cooperate with Iran over the past several years."

The Iranian government also announced on its official website that an agreement had been reached with South Korea regarding the use of frozen assets, stating, that Iranian frozen assets in South Korea can be transferred to locations desired by Iran, and the Central Bank of Iran will notify the South Korean side of the amount and destination banks of the transferred assets.

The Iranian funds frozen in South Korea due to U.S. sanctions are estimated at $7 billion (approximately 7.6 trillion KRW).

Previously, Iran seized a South Korean-flagged vessel citing marine pollution as the reason, but analyses suggested the underlying cause was dissatisfaction over the frozen funds in South Korea. South Korea dispatched Choi Jong-geon, First Vice Foreign Minister, to Iran for negotiations.

Subsequently, Iran released the seized vessel earlier this month. Iran emphasized that the South Korean government must release the frozen Iranian funds as a condition for the vessel’s release.

This announcement from Iran came after U.S. Secretary of State Antony Blinken expressed last week his intention to return to the Iran nuclear deal. With the U.S. position clarified, it is possible that prior coordination between South Korea and the U.S. took place.

Secretary Blinken also stated at the United Nations Disarmament Conference that "We will work with allies to extend and strengthen the nuclear agreement while seeking to address other areas of concern, including Iran’s ballistic missile development."