iran-south-korea

Iran summons S. Korean envoy to lodge complaint over delayed payments

MNA – South Korean diplomatic sources said Monday the Iranian foreign ministry summoned the country’s Ambassador to Tehran Ryu Jeong-hyun in November and lodged a complaint over Seoul’s delayed payment for crude oil and condensate oil worth 7 trillion won ($5.97 billion).

Seoul has been purchasing oil from Tehran in Korean currency, as part of efforts not to violate the US-led sanctions that bans trade with Iran in dollars, Korea Times reported.

The 7 trillion won in purchases was made by the Korean petroleum companies and that payment can be only finalized with the approval of the Korean government.

The companies wired the purchased amount to Industrial Bank of Korea (IBK) and Woori Bank accounts that belong to the Central Bank of Iran (CBI). However, the South Korean government has not permitted the withdrawal of the money for the past nine years.

The banks offer “almost no interest” and the Iranian government is suffering increasing financial losses as it has no access to these funds, according to the sources.

The Iranian financial officials were joined by their diplomats when Ryu was summoned.

“The Iranian foreign ministry argued the payment is not in violation of the sanctions but Seoul is not making sincere efforts to finalize the payments,” a source said. “The ministry asked Seoul to help the CBI withdraw the money at the earliest time possible.”

After Iran’s protest, Seoul’s foreign ministry sent Song Wong-yup, a board member of Korea International Cooperation Agency (KOICA), to Iran to deal with the problem.

Such a measure, however, did not satisfy the Iranian government because KOICA is a foreign aid organization and has no authority to resolve the issue.

The South Korean government said it “fully understands Iran’s situation.” It, however, added it needs to take sanctions ratcheted up by the US into account and therefore can’t accept all demands from Iran.

South Korea is in a tight spot between the United States and Iran amid Tehran’s demand that Seoul pay for the oil it received from the Middle Eastern country.

The demand comes as the US has been asking South Korea to join the US-led coalition to patrol the Strait of Hormuz controlled by Iran, while keeping up with joint economic sanctions that restrict international sales of Iranian products, including oil.

Earlier in June, Governor of the Central Bank of Iran (CBI) Abdolnaser Hemmati criticized Korean banks for blocking the access of Iran to its assets, calling on South Korea to solve the problem as soon as possible.

He made the remarks in a meeting with Hong Nam-ki, the South Korean minister of economy and finance.

“US maximum pressure policies have failed,” he said, adding that Iran doesn’t want US sanctions to negatively affect Tehran-Seoul bilateral ties.

The Korean official, for his part, expressed regret for the banking problems, saying that Seoul will put all-out effort to solve the issues.