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Iran Escalating Pressure On South Korea To Release Billions In Oil Money

Abdolnaser Hemmati , Governor of the Central Bank of Iran answering reporters' questions. FILE PHOTO

Iran's Central Bank Governor has said that Iran reserves the right to launch legal action against South Korea if the country's banks refuse to unlock billions of dollars owed to Iran for oil exports, frozen in Korean banks for nearly two years.

According to a Bloomberg report on Wednesday, Abdolnaser Hemmati has said that the actions of South Korean banks prevent Iran from using the money to buy food and medicines, trade that’s exempt 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 told Bloomberg without elaborating on the course of action that Iran is planning to take.

Iran could launch legal action to gain access to the funds, the Governor of Central Bank of Iran said, without naming the Korean banks.

In April, rejection of a SWIFT payment for coronavirus test kits due to U.S. sanctions added to Iran's complaints against South Korea, formerly a major buyer of Iranian oil.

In December Iran summoned the South Korean ambassador to protest the delay in payment of the money owed to Iran for oil and condensates exported to the country, presumably for fear of breaching the U.S. sanctions.

Iranian media are also very critical of South Korea for refusing to free the money. The daily Etemad has claimed the owed money to be around $7 billion.

Iran's Foreign Ministry on May 18 announced that “preliminary steps and political consultations were undertaken” to launch a South Korean “humanitarian channel” with Iran similar to INSTEX with Europe.

In late May the South Korean Foreign Ministry sent its first shipment of medicine for treatment of a rare genetic disease worth $500,000 to Iran. The shipment of medicine from South Korea came after the United States in April gave the green light for humanitarian exports to Iran without being caught up in complications arising from U.S. sanctions.