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EghtesadOnline: Iran will soon be able to access billions blocked in overseas banks, namely in South Korea, local media said, citing unnamed officials.

Reports about the release were first published by IRNA, the state news agency, on Wednesday. Later other news outlets, including the state-owned broadcaster IRIB, reported the same.  

On Thursday IRNA gave an update on the much anticipated unlocking of the forex reserves putting the amount at $7 billion, which equals assets blocked in South Korea. 

It said the release has been worked out in a deal as per which the money will be deposited into an Iranian bank account. 

“Under the agreed framework, the blocked assets must be reimbursed based on a schedule within a few weeks,” IRNA said. 

It noted that the money would be channeled through the same conduit used in March to transfer the four-decade-old UK debt to Iran.

Following long legal and diplomatic battles since the early-1980s, the government in London repaid the 400 million pounds to Iran late last month. 

The debt was the money Tehran had paid to Britain before the 1979 revolution for Chieftain tanks which were never delivered.

Citing UK officials, The Guardian newspaper claimed that the parities chose to use the Bank of Oman as a conduit. 

Money transfer via banks to and from Iran is impossible since 2018 when the US imposed new sanctions on the banking and financial sector after the Trump administration unilaterally left the 2015 Iran nuclear deal.

Ever since, Tehran and Seoul have been engaged in talks on how to pay the money held in that country back to Iran or use it for importing humanitarian goods to Iran. 

South Korea was a major buyer of Iranian oil before the former US president announced the economic blockade in 2018. Iran accounted for almost 15% of Korea’s oil imports at the time.

Home to a massive refining industry, South Korea is the world’s fifth-largest oil importer. After the US restricted the use of dollars for transactions with Iran, the Central Bank of Iran opened new accounts with Korean commercial banks to facilitate trade in won. 

The two countries had used the won accounts to continue Korea's imports of oil from and exports to Iran. Those accounts were also frozen after the Trump administration tightened sanctions on Iran’s oil exports in 2019. 

 

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