The U.S. State Department's coordinator for Iran and North Korea sanctions, Robert Einhorn apparently asked the government on Tuesday to freeze the assets of the Seoul branch of Iran's Bank Mellat, which Washington is targeting under sanctions announced last month. Bank Mellat's only overseas branches are in Korea, Turkey and Armenia. According to the sanctions, American financial institutions are barred from doing business with any entities that have dealings with Bank Mellat.
"The 27 countries of the European Union... adopted a comprehensive, rigorous set of measures affecting the trade, energy, finance, and transportation sectors" of Iran, Einhorn said. "I expect that our close cooperation will continue on these and many other issues, along with our other key allies and partners around the world." Daniel Glaser, deputy assistant secretary terrorist financing, said, "It is absolutely vital that South Korea be a full partner in this effort, both in terms of implementing strong new measures, such as those recently adopted in Europe, and taking targeted action at Iranian entities involved in facilitating its nuclear activities."
The government did not respond immediately to the request. Eighteen major Korean companies operate in Iran, including Doosan Heavy Industries, LG International, GS Engineering and Construction, Samsung Corporation, and SK Networks. Last year alone, Korea exported US$3.92 billion worth of products to Iran and imported $5.75 billion worth, including crude oil. Iran banned imports of Korean products in 2005, when Seoul backed the International Atomic Energy Agency's condemnation of Tehran's nuclear program. That ban lasted until March 2006. At stake for Korea is a market worth almost $10 billion in bilateral trade.
But it would be a contradiction for Seoul to support U.S. sanctions against North Korea, while taking a wait-and-see attitude in terms of sanctions against Iran. Such reticence could impact the level of trust between Seoul and Washington and hinder the cooperation that is needed to tackle North Korea's nuclear program.
Bank Mellat's presence here demonstrates just how much importance Tehran places on relations with Seoul. South Korea's participation in U.S. sanctions against Iran could trigger major repercussions lasting long after the sanctions are lifted. There is no easy solution. The government should closely study the action being taken by the UN, EU, China and Japan and come up with measures to walk in synch with the international community. This will help Korea maintain cooperation with Washington over the North Korean nuclear issue and prepare for a potential backlash from Tehran.