The government is suspending business at the Seoul branch of Iran's Bank Mellat under a package of U.S.-led sanctions that caused officials some headaches given Korea's substantial business interests in the Islamic Republic. The package consists of 16 measures that include a ban on unauthorized financial transactions and new investment in Iran's oil and gas sector.
The government on Wednesday said it will suspend the Bank Mellat branch for two months for violating foreign exchange transactions regulations. The decision is considered a compromise after a U.S. request to freeze the bank's assets and close it down.
Financial transactions with altogether 102 Iranian organizations and 24 individuals will need approval from the Bank of Korea. This adds to 40 organizations and one individual already blacklisted by the UN Security Council. The list was compiled after studying the U.S. Comprehensive Iran Sanctions, Accountability, and Divestment Act, and similar sanctions programs by the EU and Japan.
The program also requires prior approval for deals worth more than 40,000 euros with any Iranian organizations, even those not on the blacklist, while transactions worth more than 10,000 euros have to be reported to the authorities.
A senior government official said the sanctions were announced "to keep pace with the international community due to the correlation between the Iranian and North Korean nuclear issues."