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$7 Billion in Frozen Assets at Heart of Dispute between Iran, South Korea

$7 Billion in Frozen Assets at Heart of Dispute between Iran, South Korea

Friday, 24 July, 2020 - 11:45
Man wearing a face mask walks past a mural of Iran's national flag in Tehran, Iran, March 4, 2020. (AFP)

Iran's ambassador to Seoul was summoned to the South Korean Foreign Ministry on Tuesday to lodge an official protest over reports that Tehran is contemplating legal action against Seoul over the freezing of Iranian assets.

An estimated $7 billion in Iranian funds are presently being held in two South Korean banks, although the assets have been frozen since September 2019, when a waiver granted by the United States for imports of Iranian oil expired.

Iranian Foreign Ministry Spokesman Seyed Abbas Mousavi on Sunday warned of legal action in the International Court of Justice if Korea continued to refuse to pay off the money.

Mousavi also likened ties between Washington and Seoul to a "master-servant relationship" and said this was the reason Seoul was afraid of violating US sanctions on Iran, reported the German news agency.

"The official in charge called in the ambassador and expressed regrets over the inappropriate remarks," Kim In-chul, the ministry's spokesperson, told a regular press briefing, reported Yonhap news agency. "The Iranian side called for understanding and stressed that it was not the position of the Iranian government."

The funds frozen in South Korean banks were being used to pay for oil imports from Iran to South Korea and the export of goods to Iran. The payment mechanism between the two countries came to a halt when Washington, which is locked in a dispute over Tehran's nuclear program, ended the waiver granted on Iranian oil exports to South Korea.

Iranian President Hassan Rouhani on June 14 ordered the governor of the central bank, Abdolnasser Hemmati, to adopt "firm measures," including legal action, to force South Korea to release the funds.

South Korea has stopped buying Iranian oil since May 2019, when the United States stopped issuing the exemptions.

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