SEOUL - South Korea has imposed limits on its exports to Iran - mainly steel, cars and electronics - to reduce its risk of payment defaults as western sanctions disrupt Iranian oil exports, the Korea International Trade Association (KITA) said.

The KITA statement confirms an earlier Reuters report that Asia's fourth-largest economy, which sold $1.7 billion of goods in Iran in the first quarter of this year, would seek to impose export limits.

"A self-imposed export control including setting settlement ceilings for exports to Iran starts from June 12 for those exporters who receive payments from the Iranian central bank's won-denominated accounts at local banks," South Korea's representative trade body said on its web site (www.kita.net) in a statement dated June 12.

KITA said the measure had been taken in advance of planned European Union sanctions on insuring Iranian oil tankers. It also came as South Korea won an exemption from US sanctions thanks to its cuts in oil imports from Iran.

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