Iranian frozen assets in South Korea to be released: Foreign Ministry

TEHRAN- The process to release $6 billion in Iranian money wrongfully blocked in South Korea under the guise of U.S. sanctions on Iran is currently under progress, the Iranian Foreign Ministry said in a statement on Thursday.

“Iran has received the necessary guarantee for the United States’ commitment to its obligations in this regard,” the statement added.

The statement followed after reports emerged that Iran and the U.S. had achieved an agreement on a prisoner exchange that also included the return of Iranian assets.

According to the ministry, the transfer of funds has always been a priority. It also asserted that they had been “illegally blocked” under the guise of “overseas banks’ concerns about America’s oppressive sanctions.”

It is up to “the Islamic Republic and competent Iranian authorities” to determine the manner of application of the unfrozen funds, it said.

According to sources, the funds will be released as part of a prisoner swap agreement between Tehran and Washington, in which each side will hand over several individuals to the other.

The statement further said in addition to unfreezing the money, the ministry has been pursuing the release of Iranian inmates as part of its “inherent duties.”

It went on to add that the prisoners had been arrested and held across American jails “illegally and under the vain pretext of their bypassing of the U.S. oppressive sanctions.”

“The release of the prisoners will be realized soon,” the statement said, adding that the Iranian-American inmates subject to release were still in Iran.

However, a number of narratives indicate that the release of the prisoners is contingent upon the delivery of Iranian money to certain accounts.

Also on Thursday, Iranian Deputy Foreign Minister Ali Bagheri Kani tweeted that the funds were being released and that the imminent release of the Iranian held in the U.S. will take place “within the same framework.”

The Iranian Foreign Ministry spokesperson stated on Monday that the Tehran government will continue to repatriate its frozen assets in some countries, including Japan.

Speaking to reporters in a regular news briefing, Nasser Kanaani emphasized that Japanese Prime Minister Fumio Kishida and Iranian President Ebrahim Raisi had also discussed the matter of the financial claims on the sidelines of the October 2022 United Nations General Assembly session in New York.

He continued by pointing out that the Japanese government has frequently stated that it is willing to pay off its obligations and that it is now making an effort to do so.

Back in February, Kanaani also said that Tehran had been signaling that it is ready to exchange detainees with the U.S. on an “unconditional” basis and without tying the exchange to other matters.

Kanaani emphasized that by releasing a dual Iranian-American citizen months ago, Tehran demonstrated its good faith, while the U.S. has not yet reciprocated.

In a letter dated July 22, President Raisi referred a government bill to Parliament Speaker Mohammad Bagher Qalibaf to take legal actions to release the frozen Iranian assets.

The bill, officially called “the Referral of Dispute between the Central Bank of the Islamic Republic of Iran and the Government of the Korean Republic for Arbitration,” was ratified by the cabinet of ministers on July 5.

The financial dispute between Iran and South Korea dates back to 2018, when the United States unilaterally withdrew from the 2015 Iran nuclear deal, formally called the Joint Comprehensive Plan of Action (JCPOA), and started slapping economic sanctions on Iran. Before 2018, South Korea had been the third-largest buyer of Iranian oil and the top customer of Iranian condensates. The oil trade between Tehran and Seoul resulted in the accumulation of some $7 billion in Iranian oil revenues in South Korean banks.

With tensions between Tehran and Washington exacerbating, Seoul moved to block the Iranian funds for fear of falling afoul of U.S. sanctions on Iran.

The move irked Iran, which continued to demand that South Korea release the frozen funds. In a bid to get its funds, Iran held several rounds of talks with South Korea that some of which were within the framework of the broader talks between Iran and the West.

On June 20, a senior Iranian lawmaker revealed new details about Oman’s mediatory efforts to de-escalate tensions between Iran and the United States, saying Tehran had agreed to an Omani offer in this regard.

The lawmaker, Shahriar Heidari, who is the deputy chairman of the Parliament’s National Security and Foreign Policy Committee, said the Omani initiative has also struck a responsive chord with South Korea.

“Oman and Qatar are two good and reliable neighbors of Iran. Many times, they announced their readiness to resolve the differences between other countries and Iran. Oman has announced its readiness to resolve disputes between South Korea and Iran. We have no fundamental differences,” Heidari told.

He added, “Our dispute is about Iran’s blocked money in South Korea. In this regard, Oman has made a proposal that has been approved by Iran and South Korea. We hope that this proposal will be implemented.”

Back in May, officials from the United States and South Korea held talks over unfreezing Iranian funds held in South Korean banks, according to a South Korean daily.

The talks were focused on releasing the $7 billion Iranian funds that have long been blocked in South Korean banks due to U.S. sanctions on Iran.

The funds are oil revenues dating back to the period prior to the re-imposition of U.S. sanctions on Iran in May 2018.

Citing diplomatic and government sources, the Korea Economic Daily said, “Korean and U.S. government officials are involved in working-level discussions under Washington’s leadership to unfreeze the Iranian funds.”

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