Last update: May 23, 2024 00:53

Newsroom logo

Iran, South Korea Hold Talks on Frozen Funds

By Nargiz Mammadli September 5, 2023

None

South Korean Foreign Minister Park Jin held talks with his Iranian counterpart Hossein Amir-Abdollahian over Tehran's frozen funds in Seoul, on September 4, 2023. / Al Arabiya

Iranian Foreign Minister Hossein Amir-Abdollahian and his South Korean counterpart Park Jin held consultations over the handling of Tehran's frozen funds in Seoul and the strengthening of bilateral ties.

"Seoul was making efforts for the transfer of frozen Tehran funds with a clear understanding that the assets in question belong to the people of Iran", South Korean Minister said in a phone conversation on September 4, according to Yonhap News Agency.

Park added that South Korea was moving forward to resolve the pending issue through close communications with relevant nations.

He also said both countries should expand cooperation in various areas, including academia, science, sports and culture.

The Iranian minister emphasized Tehran's strong focus on relations with Asia and expressed his government's wish to enhance ties with South Korea.

The comments came after Iran announced on August 10 that it had reached a deal with the US to free five American citizens in return for the release of several jailed Iranians and access to assets blocked in South Korea.

Bilateral relations have remained frayed over the reportedly $6 billion Iranian funds that had been frozen under US sanctions — re-imposed after former President Donald Trump withdrew from the 2015 nuclear deal in 2018. Due to US sanctions, Iran has billions of dollars worth of assets frozen in several countries, including Iraq, China and Japan.

The New York Times, citing informed sources, reported earlier that the funds, estimated at $6 billion, would be transferred to an account in Qatar and could only be accessed for humanitarian purchases, such as food and medicine.

The US government confirmed earlier that five American citizens were released from Tehran's Evin Prison, and placed under house arrest. Mohammad Jamshidi, Iranian President's Deputy Chief of Staff, said the Americans will be allowed to leave Iran once funds are transferred out of South Korea.

Three of the prisoners — Emad Sharqi, Morad Tahbaz, and Siamak Namazi — are dual Iranian-American citizens. The identities of the other two prisoners were not made public.

On August 12, Central Bank of Iran (CBI) Chief Mohammad-Reza Farzin said that government funds frozen in South Korea have been released and will be used for unsanctioned goods.

"All of Iran's seized currency resources in South Korea were released and the costs of converting the currency from Won to Euro were undertaken by a third country. Accordingly, all these Euro resources will soon be deposited into the accounts of six Iranian banks in Qatar and be used as bank payments to buy unsanctioned goods," Farzin added.

The bank chief predicted that the effect of the funds' release would soon show in the market and stock exchanges.

Western media previously reported that Tehran's use of the funds would be restricted to humanitarian purchases, while Iran's Foreign Ministry insisted that the country would be able to use the funds as it saw fit.

The assets frozen in South Korea were transferred to Switzerland's central bank in August for exchange and transfer to Iran.

In 2021, the United Nations deprived Iran of its voting rights for failing to pay its dues. The US agreed to enable Tehran to use some of the funds held in a South Korean bank to pay a minimum fee for the year and restore its voting power. Iran’s voting rights in the UN have been restored since January 24, 2022, after South Korea paid Tehran’s debts of more than $18 million to the organization.