Iranian officials tell South Korean delegation Seoul must give Tehran access to its frozen money, refrain from ‘politicising’ seizure of the vessel.
Tehran, Iran – Iran’s foreign minister has told a visiting South Korean delegation the “technical” issue of a ship seized by Iranian forces will be handled by his country’s courts, as he called for the unblocking of billions of dollars of frozen funds.
During his meeting on Monday with South Korea’s Vice Foreign Minister Choi Jong-kun, Mohammad Javad Zarif said Iran primarily cares about accessing some $7bn in assets tied at South Korean banks due to United States sanctions to ease the effect of the coronavirus pandemic.
“The illegal act of South Korean banks has significantly deteriorated Iranian people’s view of the country [South Korea] and has done serious damage to its reputation,” Zarif said, according to the foreign ministry.
The South Korean diplomat flew to Tehran on Sunday to join a delegation that had arrived last week following the seizure of the South Korean-flagged MT Hankuk Chemi by Iran’s Islamic Revolutionary Guard Corps for “environmental pollution”.
Zarif said the case was “under review in the legal and judicial framework” and out of the government’s hands.
Iran has denied allegations the seizure of the tanker and its 20-member crew in the Gulf amounts to hostage-taking but has insisted South Korea has held Iranian money “hostage” for more than two years due to the US sanctions.
In May 2018, US President Donald Trump unilaterally withdrew from a nuclear deal signed between Iran and world powers three years earlier and reimposed harsh measures designed to cripple Iran’s economy. US President-elect Joe Biden has promised to restore the landmark deal.
Zarif called on the South Korean government to resolve the issue of frozen funds as soon as possible, saying members of Iran’s parliament also wished to play a role if the issue persisted, without elaborating.
Choi reportedly said Seoul was intent on resolving the issue and requested the quick release of the seized ship and crew.
At a separate meeting on Monday, the South Korean diplomat was told by Iran’s Central Bank chief Abdolnasser Hemmati that Tehran found the continued freezing of the funds “unacceptable” and raised the threat of legal action if the issue was not resolved.
“This behaviour by South Korea is a major error and fundamentally it is unacceptable for South Korea to block Iran’s money by following orders from a third country,” Hemmati said, according to the Central Bank.
“We have had funds in other countries as well and we have had access to and used them despite US sanctions.”
Hemmati appeared to be referencing neighbouring Iraq, where at least $5bn of Iranian money is held. Iranian energy minister Reza Ardakanian travelled to Iraq in late December after Iran significantly decreased natural gas exports over the sum.
Iraq agreed to pay back part of it to allow Iran to use some of the funds to buy an as-yet-unnamed COVID-19 vaccine.
On Monday, the South Korean delegation also made a stop at the Strategic Council on Foreign Affairs (SCFA), a think-tank whose members are directly appointed by Supreme Leader Ali Khamenei.
“South Korean companies have lost good opportunities in Iran in recent years,” SCFA chief Kamal Kharazi said. “Sanctions have made Iran focus on its local capabilities in a way that we are now self-sufficient in fulfilling many of our needs in home appliances.
“Even if relations between the two countries are normalised in the future, South Korean companies would have to think about investments, transfer of technical knowledge, and participation in manufacturing rather than selling their goods.”
Kharazi, a former foreign minister, also said the fact that other ships are currently moving freely in the Gulf shows that the seizure of the ship is not political.
The South Korean diplomat reportedly told him he was happy to have been able to establish telephone contact with the captain of the ship, and have consular access to its crew.