Iran to sue South Korea over frozen funds
The incumbent Iranian government has commenced formal legal proceedings against South Korea, which has refused to pay off oil debts after extensive diplomatic efforts.
In a letter, dated July 22, Iranian President Ebrahim Raeisi referred a governmental bill about the financial dispute with South Korea to Speaker of Parliament Mohammad Baqer Qalibaf, according to Tasnim news agency.
According to the bill, ratified by the cabinet on July 5, the dispute between the Central Bank of the Islamic Republic of Iran and the Government of South Korea is going to arbitration.
South Korea was the third largest customer of Iranian crude oil and the number one buyer of Iranian condensate before 2018 when former US president Donald Trump pulled out of the 2015 nuclear deal and re-imposed sanctions on Iran.
Since then, the East Asian country has refused to repatriate the funds it owes Iran for energy imports due to fears of US penalties on its economy.
Unofficial estimates suggest Iran has more than $7 billion worth of funds in two South Korean banks that it cannot access simply because banks and authorities in the East Asian country refuse to process 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.
Iranian officials have stated the South Korean government is obliged to release the country’s frozen funds, stressing that unilateral US sanctions cannot justify Seoul’s inaction in repaying debts to Tehran, Press TV wrote.
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.