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( Source of the document: ICC Digital Library )
South Korea is reviewing measures that may enable it to sustain its substantial business links with Iran. The measures aim to enable Korea to continue trading with the Islamic republic, despite the difficulties in doing so now that letters of credit for Iran are so hard to come by due to sanctions imposed by Washington.
South Korea was mulling the idea of indirect money transfers between Middle Eastern banks and South Korean enterprises doing business in Iran. This would involve telegraphic transfers of money from Iranian business entities to Middle Eastern banks outside Iran, which would then forward the money to South Korean banks.
"Trading with Iran through a L/C transaction has become virtually impossible since the US imposed financial sanctions against Iran," an unnamed government official told local media. "We are reviewing the telegraphic transfer method that transfers money to banks in another Middle Eastern country," he added.
The official also pointed out that the South Korean government is hoping such a measure can be implemented in a way that preserves Seoul's relations with Washington, which is pressing South Korea to support sanctions against Iran's nuclear program. Iran is South Korea's biggest Middle Eastern trading partner, and many businesses have reportedly been adversely impacted by US sanctions on Iran.
The sanctions were first set out in essence in The Iran Sanctions Act (ISA). Since it was first enacted, it has had a substantial impact because it authorizes penalties against foreign firms, many of which are incorporated in countries, like South Korea, that are US allies. American companies are restricted from trading with or investing in Iran under separate US executive measures.
The ISA was amended in 2010 to try to curtail additional types of activity, such as selling gasoline and gasoline production-related equipment and services to Iran, and to restrict international banking relationships with the country.