Iran frees South Korean tanker as nuclear talks take place in Vienna

Iran has released a South Korea-flagged tanker three months after the elite Revolutionary Guards captured the vessel and raised tensions over US-led sanctions and Tehran’s nuclear programme.

Seoul said on Friday that the Hankuk Chemi departed Iran at 5.50am local time. “The captain and sailors are healthy and the ship and cargo are in good shape,” the foreign ministry said.

Iran’s foreign ministry said on Friday that an order to release the vessel followed an investigation into the Korean vessel’s violation of its laws. It is not clear whether the vessel was freed as a result of negotiations under way in Vienna between Tehran and the remaining signatories of the 2015 nuclear deal from which Donald Trump pulled out in 2018.

Since Tuesday, Iran, the UK, France, Germany, Russia and China have held talks over Iran’s nuclear activities and US sanctions to revive the nuclear deal, known as JCPOA. The US has also had an indirect presence in Vienna.

Tehran has insisted that the South Korean vessel was seized because of alleged environmental violations. However, the incident was broadly viewed as an escalation of a dispute between South Korea and Iran over $7bn in Iranian cash held by South Korean banks.

The cash, held in commercial and central bank accounts in Seoul, was frozen after the Trump administration tightened sanctions on Iranian oil exports. Previously South Korea, which is home to one of the world’s biggest refining industries, imported as much as 15 per cent of its oil from Iran.

On Monday, Saeed Khatibzadeh, Iran’s foreign ministry spokesperson, said he expected the frozen money to be released during a visit to Tehran by South Korean officials in the near future, but added that progress had been “slow”.

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Iran has also said that the partial release of blocked money in overseas banks would not convince it to comply fully with the nuclear accord and roll back its enrichment activities. The Islamic Republic insists that the US should lift all sanctions imposed under the Trump administration before Iran recommits to the deal.

During the negotiations over the ship seizure, South Korean officials argued that Iran’s money could be deployed through the Swiss Humanitarian Trade Arrangement, a funding channel established last year, or via direct assistance of food and medical supplies from South Korea. Iran also requested that South Korea use the funds to provide coronavirus vaccines.

Any such transactions would require approval by US Treasury officials, who police sanctions enforcement, according to people familiar with the discussions.

Woori Bank, one of the two South Korean commercial banks holding Iranian cash, and the South Korean central bank told the Financial Times on Friday that there had been no change regarding the Iranian deposits at their banks.

The US state department could not immediately be reached for comment.

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