BAKU, Azerbaijan, August 17. The value of Iran's assets frozen in South Korea due to the new sanctions imposed by the US against Iran in 2018 for its nuclear program is gradually decreasing, Trend reports.
After the announcement of the agreement between the US and Iran on the release of Iran's frozen assets abroad, a number of interesting facts have emerged.
So, as a result of sanctions, approximately $7 billion of Iran’s funds obtained from the export of oil and gas condensate to South Korea have been frozen in this country. These funds were kept in two banks in South Korea (Woori Bank and Industrial Bank of Korea) with the country's national currency, the "won".
For about 3–4 years, no income is expected from those funds. A few days ago, the Director General of the Central Bank of Iran, Mohammad Farzin, said that as a result of the depreciation of the South Korean won against the US dollar, the value of Iran's fund assets in South Korea decreased by $1 billion.
According to the rules in South Korea, it is possible to convert a maximum of 500 million won into euros per week. It means this process will last 4-6 weeks. The amount of funds converted into euros will be approximately 5.3 billion euros, or $5.77 billion. It is clear that the mentioned $6 billion has already been reduced to $5.77 billion.
On May 8, 2018, the US announced its withdrawal from the Joint Comprehensive Plan of Action (JCPOA) between Iran and the 5+1 group (Russia, China, the UK, France, the US, and Germany) and imposed new sanctions against Iran as of November 2018.
Over the past period, the sanctions have affected Iranian oil exports and more than 700 banks, companies, and individuals. The sanctions have resulted in the freezing of Iranian assets abroad.
Then, by what mechanism will Iran's assets frozen in South Korea be unblocked?
The funds will later be transferred to the Swiss Central Bank's account in South Korea. After the funds are transferred to the Swiss Central Bank account in Germany, they will be transferred to two bank accounts in Qatar. This is because six private banks in Iran have opened accounts in those two banks in Qatar and will be transferred to those accounts later.
These funds will be used to import products that are not subject to sanctions against Iran, mainly animal feed. Because among the products imported into the country, one of the products on which the most foreign currency is spent is animal feed, It is reported that the funds withdrawn from the block will be insured in Qatar.
According to the statistics of the Islamic Republic of Iran Customs Administration (IRICA), Iran imported corn feed worth $1.29 billion during the first 4 months of the current Iranian year (March 21 through July 22, 2023).
Iran claims that it has great economic resources and that sanctions have no effect on the country's development and economy. It has spent its resources to get back its money, which currently does not reach $6 billion, and spend it on animal feed.
It is clear that Iran is already facing a serious shortage of foreign currency. Sanctions are doing their job. It is not so difficult to predict that Iran will face an even worse situation in the coming years if the sanctions continue. The lifting of sanctions goes along with the solution of the problem related to Iran's nuclear program.
The problem regarding Iran's nuclear program is like an unresolved black box. Although the US side previously showed interest in opening this black box, it currently does not even intend to hold discussions on Iran's nuclear program.
Although Iran has the opportunity to open the black box, it prefers not to. Despite Iran's claims that it is trying to build confidence in its nuclear program, some unknown steps, including the discovery of natural uranium deposits in the Marivan County of Iran’s Kurdistan Province, high-level enrichment of uranium, and so on, indicate that there may be other goals.
Iran is mainly trying to achieve the abolition of sanctions imposed by the US and Western countries, the removal of its funds frozen abroad, and the abolition of the restriction on the export of crude oil. In return, the US and Western countries want Iran not to acquire an atomic bomb, to keep its nuclear program under control, and to reduce the level of uranium enrichment.
---
Follow the author on Twitter:@BaghishovElnur