SEOUL: South Korea and Iran have agreed a way forward that could see billions of dollars of frozen oil money unblocked, Seoul said on Tuesday, but signalled that the agreement was effectively subject to US approval.

Tehran last month seized a South Korean-flagged tanker in sensitive Gulf waters, citing the ship’s “repeated infringement of maritime environmental laws”.

The seizure of the tanker came after Tehran had urged Seoul to release billions of dollars of Iranian assets frozen in South Korea under US sanctions over its nuclear programme.

The South’s foreign ministry said Iran’s central bank governor and Seoul’s ambassador had reached an agreement in Tehran.

“Iran has agreed to our proposals to use the fund,” the ministry said in a statement, without giving details.

There have been suggestions the money could be used to buy coronavirus vaccines, or to pay Iran’s debts at the UN.

But the South Korean ministry added: “Actual lifting of the fund freeze will have to go through consultations with related actors including the US.” The comment suggests Washington — which is insisting Iran move first in the nuclear stand-off — will have a de facto veto on any transfers.

Published in Dawn, February 24th, 2021