News Column

South Korea to make oil payments

February 13, 2014



Seoul is to make payments to Tehran for oil imports following an interim nuclear agreement clinched between Iran and the six major world powers in the Swiss city of Geneva.

South Korea is set to become the second Asian nation to make a payment to Iran for crude imports under the Geneva deal that has provided Tehran with some sanctions relief, a banking source told Reuters on Wednesday.

The Central Bank of Iran has a total of about $4.7 billion to $5.6 billion in South Korea in two won-denominated accounts, one at Woori Bank and the other at Industrial Bank of Korea as of late 2013, according to a second source.

The two sources declined to be named as the issue is sensitive. The first source said the payment to Tehran was expected to be made in early March, but did not specify the amount.

This comes as Bank of Korea and South Korean Finance Ministry officials contacted by Reuters said no decisions had been made about money transfers to Iran.

Last month, Japan became the first of Iran's oil buyers to make a payment for crude imports following the Geneva deal.

One source confirmed the Japanese payment was $550 million released to the Central Bank of Iran account in Switzerland from an account registered under the Bank of Japan.

Iran and the five permanent members of the UN Security Council-the US, Britain, France, Russia and China-plus Germany signed the Geneva deal on November 24, 2013. The two sides started to implement the agreement on January 20 and aim to continue negotiations for a final comprehensive deal.

Under the Geneva agreement, the Sextet agreed to provide Iran with some sanctions relief in exchange for Tehran agreeing to limit certain aspects of its nuclear activities during a six-month period. It was also agreed that no nuclear-related sanctions would be imposed on Iran within the same timeframe.

The sanctions relief for Iran includes access to $4.2 billion of its oil revenues frozen abroad by eight money-transfer schedules through July.


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Source: Iran Daily


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