Iran Aims To Submit Funds Frozen In South Korea To Arbitration

Iran’s government has submitted a bill to parliament to approve sending the case of $7 billion frozen by South Korean banks to arbitration.

Media in Tehran published a letter by President Ebrahim Raisi sent to parliament speaker Mohammad Bagher Ghalibaf on Saturday.

The funds were frozen at two Seoul banks after the United States withdrew from the 2015 JCPOA nuclear accord and imposed sanctions on Iran, including its banking sector. South Korea owed the money for oil imports before full US sanctions kicked in in May 2019.

It is not clear why the Iranian government needs a parliamentary vote for sending the dispute to arbitration, except to try to build a stronger case. The letter also does not mention what kind of arbitration Tehran has in mind.

The frozen funds have been the subject of long negotiations between Tehran, Seoul and Washington over the past two years, as the Biden administration launched talks with Iran in April 2021 to revive the JCPOA. Many reports and statements point to possible release of the funds in exchange for several US citizens held hostage in Iran.

Both the nuclear talks and the prisoner release talks have not succeeded in making meaningful progress. However, US officials say that efforts to secure the release of four Americans continue. Apparently, one US condition is to set up a mechanism for the disbursement of the funds for purchasing only non-sanctionable goods by Iran such as food and medicine.

There are similar frozen assets in Iraq, Japan and elsewhere that Iran desperately needs amid a serious economic crisis and continuing sanctions.