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[Asia Economy Reporter Naju-seok] The Iranian government claimed that the $7 billion (7.64 trillion KRW) frozen funds and the detention of the Korean chemical carrier ship and its crew are unrelated. However, inside Iran, it has been directly and indirectly confirmed that this detention incident has the character of a ‘hostage’ situation to secure the frozen funds. Experts pointed out that resolving this issue requires a clear stance from the United States, not Korea.

On the 10th (local time), Choi Jong-geon, Vice Foreign Minister of Korea, who is visiting Iran, met with Abbas Araghchi, Vice Foreign Minister of Iran. Vice Minister Choi visited Iran to demand the release of the Korean-flagged chemical carrier ship ‘Korea Chemie’ and 20 Korean crew members detained by the Iranian Revolutionary Guard Corps in the Strait of Hormuz area.

[Image source=Yonhap News]

Vice Minister Araghchi denied the claim that Iran is holding the Korean ship and crew hostage because of the $7 billion frozen funds. Instead, he countered by claiming that the Korean government is holding Iran’s funds hostage. According to Iranian state TV and others, Abbas Araghchi told Vice Minister Choi, “(Regarding this incident) we should refrain from politicizing it and propaganda that does not help the outcome, and allow legal procedures to proceed.”

The Iranian government officially claims that Korea Chemie was detained for violating Iran’s environmental regulations. However, the Korean shipping company ‘DM Shipping’ rebutted that there was no movement to conduct an investigation related to environmental regulations before the detention. If environmental pollution was the reason for the detention as Iran claims, an investigation should have been conducted first, but the detention was decided without such measures.

Contrary to the Iranian government’s official claim, circumstances confirming that this matter is related to the $7 billion of Iranian funds frozen in Korean financial institutions are found in various places.

According to the semi-official Iranian Fars News Agency, Vice Minister Araghchi said, “For the past half year, the Bank of Korea has frozen Iran’s funds,” adding, “For us, this is due to Korea’s lack of political will rather than U.S. sanctions.”

One foreign media outlet also cited sources close to Iranian hardliners acknowledging that the detention of Korea Chemie is related to the $7 billion. The source said, “Above all, we (Iran) thought that U.S. generals are busy calming the Republicans and Democrats, so the U.S. would find it difficult to take action,” and “Iran’s decision this time was not to provoke the U.S. but an economic decision to make Korea unfreeze our funds.”

The source added, “Korea must be humiliated. There has been a long debate on this issue but no results have been achieved,” and “Korea should know that Iran’s funds cannot be kept frozen when Iran desperately needs medicines and COVID-19 vaccines.”

He said, “The Korean government should have known that simply saying ‘sorry’ to our emails was not enough,” and “Now that they have come to negotiate with us, we can whisper to them, ‘Where is our money?’”

The problem is that this issue cannot be resolved through negotiations between Korea and Iran. The Korean government stated that it has received U.S. approval to use the frozen funds to enable Iran to purchase vaccines through the joint vaccine procurement and distribution organization COVAX. However, there is deep distrust in Iran regarding this position. They believe that U.S. courts and others could seize Iran’s funds.

Kyle Perrier, a researcher at the Korea-U.S. Economic Institute, said, “The U.S. must explicitly and verbally confirm that using frozen funds for vaccine purchases with Iran and financial institutions does not violate sanctions,” adding, “Korea has no way to solve this problem on its own.”

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