South Korea and the Islamic Republic of Iran have agreed to establish a working group on expanding humanitarian trade as part of efforts to maintain bilateral partnership within the scope of a U.S.-approved sanctions exemption, a South Korean source close to the matter said Sunday, August 2.
Seoul says it is seeking to expand humanitarian exports to Iran, including coronavirus test kits, amid the worsening COVID-19 outbreak in the Islamic Republic and other essential medicine, like flu vaccines and antidiabetics, South Korean official news agency, Yonhap, cited a local source as saying.
Under U.S. sanctions, about $7 billion of Iranian oil money has been frozen in Korean banks since last year. Korean officials plan to repay part of that by exporting drugs and medical equipment.
In April, Washington approved an exclusive license for Seoul to resume some humanitarian transactions with Tehran, even if they involve Iran's central bank subject to U.S. sanctions. In late May, Seoul sent $500,000 worth of medicine for hereditary diseases in the first such shipment to the Middle Eastern country, Yonhap reported.
Based on the same report, the first session of the newly-formed working group is scheduled to convene early in September.
During joint video sessions, the Islamic Republic officials had expressed their willingness to buy hundreds of millions of dollars of goods from Seoul.
Earlier on June 1, the Governor of Central Bank of Iran (CBI), Abdolnasser Hemmati, had announced that Iran was escalating its pressure on South Korea to release billions of dollars of oil-export revenue. He argued that Seoul was caving in to pressure from its U.S. ally and illegally withholding funds needed to counter the Middle East's worst coronavirus outbreak.
Furthermore, Hemmati complained that South Korea banks were preventing Iran from using the money to buy foods and medicines, which is exempted from U.S. sanctions.
"It is appalling to see that Korean banks have conveniently neglected their obligations, common international financial agreements, and decided to play politics and follow illegal and unilateral U.S. sanctions," Hemmati said in a written response to questions. Iran could launch legal action to gain access to the funds, he said, without naming the lenders in question.
Immediately after the warning, the Islamic Republic Foreign Ministry summoned Seoul's ambassador in Tehran.
The South Korean government has also set up a select working group between its various government departments to increase its humanitarian trade with Iran.