Financial transactions between Seoul and Tehran for shipments of food and medical items became effectively impossible after Washington toughened sanctions against the Central Bank of Iran (CBI) in September, requiring third countries to provide information on trade with the Middle Eastern nation.
A local daily reported on Saturday that Tehran called in the South Korean ambassador to Iran to lodge a complaint, urging Seoul to resume humanitarian trade with the country.
"The Iranian side expressed its position that it hopes for the humanitarian trade to be resumed and is discussing the matter with us," a South Korean Foreign Ministry official said. "We are in talks with Iran and the US frequently so that the shipments of humanitarian goods like medical supplies can be resumed using the won-based transaction system."
Iran has denounced the tough US sanctions as "inhumane and cruel," calling for this kind of trade to be exempted from the sanctions.
Officials from the foreign, finance and industry ministries in South Korea reportedly visited Washington last week and held talks with US officials over the issue, according to sources familiar with the matter.
In June, Seoul officials visited Washington to ask for US cooperation on the export of humanitarian goods to Iran.
The US decided in April this year to end sanctions waivers for imports of Iranian oil by South Korea and other countries. Since then, South Korean companies have faced difficulties in selling medicine, medical equipment and other humanitarian products to Iran through a bilateral transaction system using the Korean currency, the won.
The CBI has won-based accounts at Woori Bank and the Industrial Bank of Korea in Seoul for payments of not just oil imports but also products that are not subject to sanctions.
South Korea’s Chosun Ilbo newspaper said Iran’s Foreign Ministry called in the South Korean ambassador last month to demand payment of 7 trillion won ($6 billion) for oil it sold to the Asian country.
Iran expressed “strong regret” over Seoul’s failure to complete the payment, which has been deposited at two South Korean banks without being transferred to Iran’s central bank for years due to US sanctions, the daily said. It added that other Iranian authorities including the central bank also complained.
South Korea sent a delegation to the Iran late last month and explained that the country will cooperate with the US to successfully complete transfer of the payment, it added.
Yonhap and Bloomberg contributed to this story.