The government is apparently planning to announce sanctions against Iran in the near future including an order to halt operations at Iran's Seoul-based Bank Mellat, which the U.S. has linked to Tehran's nuclear activities. The measure would be less severe than freezing the bank's Seoul-based assets and closing it down, as the U.S. has requested.

Seoul is hoping to minimize the fallout for Korea's extensive business interests in Iran by explaining to Iranian officials the reasons behind the sanctions and what lies ahead. "We can't postpone the announcement of sanctions any further since Japan announced its own set of sanctions on Friday," said a high-ranking government official. "A taskforce of officials from the ministries of strategy and finance and foreign affairs and the Financial Supervisory Service is fine-tuning the sanctions."

They are apparently considering a temporary cessation of foreign exchange and other operations at the Seoul branch of Bank Mellat. The most likely duration is two months, but that could change.

Bank Mellat has overseas branches only in Seoul, Turkey and Armenia. The sanctions by Seoul would be the first affecting an overseas branch of the Iranian lender.