News   /   Economy   /   Koreas

Iran to refer case of frozen funds in South Korea to arbitration

In this file picture, a South Korean national flag (L) and a Bank of Korea flag fly outside the central bank’s headquarters in Seoul. (By Getty Images)

Iran has commenced formal legal proceedings against South Korea as Seoul refuses to release billions of dollars worth of Iranian funds on the pretext of US sanctions.

In a letter dated July 22, President Ebrahim Raeisi sent the bill on referring the dispute to arbitration to the Iranian parliament.

The bill, addressed to Parliament Speaker Mohammad Baqer Qalibaf, was ratified by the cabinet of ministers on July 5 and was forwarded to the parliament “in order for the legal procedure to be taken.”

Unofficial estimates suggest Iran has more than $7 billion worth of frozen funds in two South Korean banks which refuse to release them because of fears of facing US penalties.

Earlier this year, Iranian media outlets reported that Seoul and Tehran were holding working-level consultations seeking ways to resolve the issue of Iranian assets frozen in South Korea.

South Korean banks blocked Iran’s assets after former US President Donald Trump withdrew from the Iran nuclear deal in 2018 and reinstated economic sanctions against Iran.

Before then, South Korea was the third largest customer of Iranian crude oil and the number one buyer of Iranian condensate.

Iranian officials have stated the South Korean government is obliged to unfreeze the country’s frozen funds, stressing that unilateral US sanctions cannot justify Seoul’s inaction in repaying debts to Tehran.

The two sides had previously agreed to use the funds for the purchase of humanitarian items by Iran, something that has again been prevented as a result of South Korea’s commitment to the illegal US sanctions.

Tehran has imposed restrictions on imports from South Korea in retaliation for Seoul’s illegal compliance with the US sanctions.

Press TV’s website can also be accessed at the following alternate addresses:

Press TV News Roku