By Kim Bo-eun
South Korea received a waiver from sanctions on oil imports from Iran after Washington re-imposed these on Tehran, Monday.
Seoul was exempted on the condition that it would significantly reduce the scale of the imports, the foreign ministry said the same day.
The allies agreed, however, not to disclose the scale of the reduction.
The waiver will last for six months, but can be extended after this period expires.
A foreign ministry official said the government sought the exemption as “the oil and chemical businesses were key to the nation's economy.”
“If these businesses are hit by sanctions on Iran, they will negatively affect the performance of the nation as a whole,” he told reporters on condition of anonymity.
Receiving the exemption has allowed a stable supply of condensate, which is essential for the domestic oil and chemical businesses, the ministry said.
South Korea is one of Asia's largest importers of Iranian oil. It mainly imports an ultra-light form of crude oil known as condensate, accounting for 74 percent of its imports from Iran.
Meanwhile, the payment system for trade with Iran using an “escrow account” will also be maintained, allowing exports of items not subject to sanctions to the Middle Eastern country, the ministry continued.
The Central Bank of Iran (CBI) has set up a Korean won account at the Industrial Bank of Korea and Woori Bank to make payments for bilateral trade through won. The oil refineries deposit payments for imports to the CBI Korean won account, and the exporting companies receive the payments through the same account.
Sanctions on Iran have been re-imposed as a means to curb the country's nuclear and missile activities, after the U.S. left the Iran nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), in May.
Seoul is among a list of eight countries that received exemptions. The others are China, India, Japan, Italy, Greece, Turkey and Taiwan, U.S. Secretary of State Mike Pompeo said in a press conference.
A day earlier he said despite the waivers, the sanctions have already had a significant impact, and stated the exempted states “need a little bit more time to get to zero.”
Following its withdrawal from the JCPOA, the U.S. stated sanctions on automobiles and the trading of precious metals, steel and software would go into effect Aug. 7.
From Nov. 5, Washington added it would sanction the trade of Iranian oil, oil products and petrochemicals, transactions with Iranian financial institutions and the energy sector.