Iran Says S.Korea To Release $1BN Of Its Frozen Funds After Tanker Seizure

Iran and South Korea have been engaged for the past two months in intense crisis meetings triggered by the Jan.4 Iranian seizure of the South Korean-flagged tanker MT Hankuk Chemi off the Islamic Republic’s southern waters. From the start of the IRGC’s capturing the vessel and detaining its crew, Tehran pointed to $7 billion to $10 billion in Iranian assets in Korean banks previously frozen by Seoul in compliance with US-led sanctions. The clear message has been that the tanker can be released when the funds are released, despite the official Iranian claim that the Hankuk Chemi violated ‘environmental protocols’.

And now Iran’s Central Bank says Seoul has agreed to release some of these funds. It’s expected that $1 billion cash will be unfrozen in the first phase. “In the meeting with the South Korean envoy, we stressed how Iran could use its resources,” Governor of the Central Bank of Iran (CBI) Abdolnaser Hemmati told state media on Wednesday.

“Great damage has been incurred on the Islamic Republic. It was Koreans themselves who asked and [came] to say that they are seeking to pay Iran’s assets and we showed them how to do so,” the Iranian bank official added.

Ironically it had been Tehran officials that charged Seoul with “hostage taking” – in the form of badly needed funds at a moment the Iranian economy is being strangled by Washington sanctions.

While the release of the 19-person crew was already accomplished in early February, it appears Iran is still holding the oil tanker itself. South Korea’s Ministry of Foreign Affairs had said of the crew’s release at the time: 

“The two sides… shared the view that the release of the sailors was an important first step to restore trust between the two countries and they will work to resolve the issue of frozen Iranian assets in South Korean banks,” according to The Hill.

At this point there hasn’t been clear confirmation from the South Korean side that it’s unfreezing $1 billion as touted in Iranian sources. However, it’s clear that intensive talks have been ongoing, with South Korea previously scrambling to send diplomatic teams to Tehran over the tanker issue.