Lee Yeon-woo is a financial journalist at The Korea Times. Her wide range of reporting includes policies, macroeconomics, stock market, companies and even crypto. She is passionate about connecting the dots in Korean finance and making it easier for foreign nationals to understand. Based on her previous experience as a national reporter, she also has a keen interest in social issues within the sector, including gender equality and ESG. Your tips and insights are always appreciated. You can send them to yanu@koreatimes.co.kr.
Korean banks say Iran's compensation claim is gov't issue
A woman pass by a mural painting of an Iranian flag in Tehran, Iran, Friday. EPA-Yonhap
By Lee Yeon-woo
Iran is seeking compensation for losses incurred on the $6 billion in funds that were held in Korea, following the lifting of the U.S.-led sanctions that saw the funds frozen. The Middle Eastern country is reportedly undergoing a legal review with a view to recovering interest and the foreign exchange losses.
"Those governments must be held to account for their unjustified move to comply with the illegal demands of the U.S. government, the financial losses inflicted on Iran as a result of the long-term freezing of Iranian assets," stated Iran's foreign ministry in a release on Tuesday (local time).
Following the statement, the Islamic Republic News Agency (IRNA), Iran's official news agency, reported on Wednesday that Tehran is currently in the process of reviewing its legal stance to claim losses from the exchange rate. Iran alleges that due to the decline in the value of the Korean won during the sanction period, they experienced a $1 billion loss.
"If international lawyers and experts conclude that Iran is entitled to receive (the amount), we will pursue it," stated Mohammad Dehghan, the vice president for legal affairs.
The Iranian government is also conducting a legal review to recover interest on the funds that were frozen and deposited in domestic banks over the past four years.
Related Korean banks, namely Woori Bank, Industrial Bank of Korea, and the Bank of Korea are refraining from making any comments about Iran's actions that could place them in a precarious position. Officials contacted by The Korea Times said that they are in no position to comment on the issue since the matter primarily involves the Iranian and Korean governments and any decision on the issue will come from the governments themselves.
In response to Iran's widely publicized demands, the Korean government drew a line, asserting that "requesting additional compensation does not align with the agreements made between the concerned countries."
Last month, the U.S. reached an agreement with Iran on a prisoner exchange and subsequently released $6 billion in assets that had been frozen in Korean banks. These funds were routed through Switzerland before being transferred to Iranian accounts at two Qatari banks.