The Iranian government has submitted a complaint at international courts against South Korea regarding Tehran’s assets that have been frozen due to US sanctions.
The step was endorsed by lawmakers amid ambiguity about the future of diplomatic consultations to sign a US-Iran deal that could lead to the release of funds deposited by Tehran abroad.
Iranian President Ebrahim Raisi sent a bill to the Iranian parliament under the title “The Referral of Dispute between the Central Bank of the Islamic Republic of Iran and the Government of the Korean Republic for Arbitration.”
Relations between the two countries were strained after Iranian funds from the sale of crude oil were seized in South Korean banks in compliance with sanctions that were re-imposed by then US President Donald Trump, following the US withdrawal from the 2015 nuclear deal.
Trump believed his policy of "maximum pressure" on Iran would force it to accept more stringent restrictions on its nuclear program, which the United States, European powers, and Israel fear may be designed to develop a nuclear weapon.
Speculation had increased in the past weeks about the release of these funds after Western officials said that Tehran and Washington are negotiating, through an Omani initiative, to reach a limited agreement by which the assets can be released by S. Korea and Iraq. In return, Tehran would release detained American nationals and halt its uranium enrichment by 60 percent.
The Iranian Students' News Agency (ISNA) reported that the South Korea’s unyielding policies toward releasing the frozen assets pushed Iran to submit the official complaint.
Shahriar Heydari, deputy head of the Parliament's National Security and Foreign Policy Committee, said on Sunday the international community had condemned the asset freeze, suggesting that Tehran may review its ties with Seoul.
Heydari added that negotiations were held between Iran and South Korea, but no progress has been achieved so far.
Member of the National Security and Foreign Policy Committee MP Ibrahim Azizi told ISNA that South Korea will be the most harmed if the assets aren’t released.
Azizi said the complaint would allow Iran to pursue legal diplomacy to follow up on its request at international courts.
Tehran has in the past pushed Baghdad to secure US permission to release the funds by cutting its natural gas exports to Iraq, limiting its ability to generate power and forcing deeply unpopular electricity cuts.
The US has extended by 120 days a sanctions waiver, allowing Iraq to pay electricity expenses and its debts to Tehran.
Last week, 14 private Iraqi banks came under restrictions by the US government in response to suspicions that they were helping funnell US dollars to Iran.
Reuters reported that the latest waiver was expanded to permit payments to banks outside Iraq at the request of the Iraqi government, apparently in the hopes that this might transfer some of the pressure that Iran has exerted on Baghdad to other countries.
An American official said: “We have to help the Iraqis with this perennial pressure from the Iranians to access the money.”
"The Iraqis have requested, and now we have agreed, to expand the waiver," said the official, saying this might help ensure better compliance with the US requirement that any disbursements be for humanitarian purposes.
One week before the US exemption, Iraqi Prime Minister Mohammed Shia al-Sudani announced the signing of an agreement with Iran to trade Iraqi oil for Iranian gas.
Sudani said Iran dropped its gas exports to Iraq by more than 50 percent as of July, after the failure of Baghdad to obtain the US approval for disbursing the money owed to it before Iran agreed to resume gas exports in return for Iraqi oil.
Hamid Hosseini, a board manager at the Iranian Oil, Gas and Petrochemical Products Exporters Union (OPEX), said on Saturday that Tehran would obtain 100,000 barrels per day from Iraq, according to the IRGC-affiliated Fars news agency.
He said that Iran will be able to receive some 30,000 barrels per day of heavy-grade crude oil and another 70,000 of mazut from Iraq to fulfill part of the local demand.
