Ministry of Foreign Affairs Dispatches Negotiation Team to Iran on 6th... Korea Caught in US-Iran Conflict

Various Interpretations on the $7 Billion Frozen Iranian Funds in South Korea Due to US Sanctions and the Seizure of Ships Targeting the Biden Administration
Speculation on the US Aim for Early Return to the Iran Nuclear Deal

[Image source=Yonhap News]

[Asia Economy Reporter Lim Cheol-young] Various perspectives are emerging regarding the background of the incident in which the Iranian Revolutionary Guard detained a Korean vessel at a time when discussions were underway to expand humanitarian trade between the two countries. Primarily, analyses suggest that the direct cause was the $7 billion (approximately 7.6 trillion KRW) issue of Iran’s central bank funds frozen in Korea, followed by interpretations that the action was aimed at the new U.S. administration under Joe Biden.

On the third day of Iran’s detention of the Korean vessel on the 6th, the situation is becoming increasingly severe. President Moon Jae-in instructed the Blue House’s National Security Office, along with related ministries such as the Ministry of Foreign Affairs and the Ministry of Oceans and Fisheries, to closely coordinate countermeasures and decided to activate a continuous response system centered on inter-ministerial coordinated measures. The Ministry of Foreign Affairs, the main responsible ministry, decided to urgently dispatch a negotiation working-level delegation led by Ko Kyung-seok, Director General of the Africa and Middle East Bureau, to the site on the same day.

From the 10th, First Vice Foreign Minister Choi Jong-geon will visit Iran for a 2-night, 3-day schedule. The purpose of Vice Minister Choi’s visit, planned before this incident, was to discuss expanding humanitarian trade between Korea and Iran. During this visit, Vice Minister Choi will engage in discussions not only on friendly trade but also on the early release of the Korean vessel and crew.

While the Korean government has launched an all-government response, the Iranian government has issued sharp reactions to international criticism accusing it of holding the Korean vessel and crew hostage. Iran has repeatedly emphasized through diplomatic channels with Korea that this detention is a measure to investigate environmental pollution issues related to the “MT-Korea Chemie” ship and is unrelated to the $7 billion of Iranian funds frozen in Korea.

Ali Rabiei, spokesperson for the Iranian government, held the first online press conference since the vessel’s detention on the 5th (local time), stating, “We have been hearing criticism that we are conducting a hostage drama recently,” and claimed, “It is Korea that is holding $7 billion of Iranian funds hostage, and they (Korea) have made no additional efforts to allow the Iranian people access to our funds.”

[Image source=Yonhap News]

Following the official statement by the Iranian government spokesperson, the analysis that the frozen Iranian funds in Korea are the background of this detention incident is expected to gain more weight. In July last year, the Iranian government stated regarding these funds, “If repayment is not made, we will pursue debt repayment through the International Court of Justice,” and criticized, “The U.S. and Korea have a master-servant relationship.” This statement further supports the analysis that the frozen Iranian funds in Korea are the background of the incident.

Previously, the governments of Korea and Iran had been discussing using the frozen Iranian funds in Korea to purchase vaccines. The method involved Korea transferring the frozen funds to the COVAX facility, enabling Iran to receive vaccine supplies. The Ministry of Foreign Affairs reported that it had completed consultations with the U.S. Treasury Department and obtained sanction exemptions, but the Iranian side has not reached a conclusion due to concerns over additional U.S. sanctions.

There is also speculation that this is a calculation to leverage Korea to expedite the U.S. return to the Iran nuclear deal (JCPOA - Joint Comprehensive Plan of Action). The U.S. unilaterally withdrew from the Iran nuclear deal in 2018 and significantly strengthened sanctions against Iran. Given the severe economic difficulties and the importance of securing COVID-19 vaccines, this detention is interpreted as a political move ahead of the inauguration of the Joe Biden administration. Biden pledged during the last presidential election to revive the Iran nuclear deal.

U.S. CNN reported, “Regardless of whether the Korean vessel discharged pollutants, Iran has used this detention to imprint its potential influence over navigation in the Gulf region,” adding, “Korea, which holds Iran’s frozen funds, is a neutral victim caught between the U.S. and Iran.”

[Image source=Yonhap News]

This content was produced with the assistance of AI translation services.