US grants Iran sanctions exemption to South Korea

The US has granted South Korea a license to pay damages owed to an Iranian company, possibly a gesture from the US to Iran to move nuclear talks forward.

 KAZEM GHARIB ABADI, Iran’s permanent representative to the International Atomic Energy Agency, leaves a meeting in Vienna on following up the Iran nuclear agreement. (photo credit: Leonhard Foeger/Reuters)
KAZEM GHARIB ABADI, Iran’s permanent representative to the International Atomic Energy Agency, leaves a meeting in Vienna on following up the Iran nuclear agreement.
(photo credit: Leonhard Foeger/Reuters)

The US permitted South Korea to pay damages owed to an Iranian company, in an exemption to sanctions on Tehran that can be viewed as a trust-building step in the ongoing nuclear talks.

The US Treasury Department Office of Foreign Assets Control granted South Korea a “specific license” earlier this week to pay Dayyani Holdings, which is linked to the Iranian government. The amount has not been determined, but Seoul owes the company $63 million since 2018, which was not paid due to US sanctions on Iran.

The move came days after South Korean Vice Foreign Minister Choi Jong-kun met with US Special Envoy for Iran Robert Malley, as well as the Iranian and European delegations to the Vienna talks.

Iran says South Korea owes about $7 billion for oil cargo, which it has not paid after then-US president Donald Trump left the Iran deal in 2018 and imposed “maximum pressure” sanctions.

The negotiations in Vienna, which are in their eighth round, are for the US and Iran to return to the 2015 Joint Comprehensive Plan of Action, which restricted Iran’s nuclear program in exchange for the gradual lifting of sanctions until 2030.

 Missiles are launched during a joint exercise called the 'Great Prophet 17', in the southwest of Iran, December 24, 2021. Picture taken December 24, 2021.  (credit: SAEED SAJJADI/FARS NEWS/WANA (WEST ASIA NEWS AGENCY)VIA REUTERS) Missiles are launched during a joint exercise called the 'Great Prophet 17', in the southwest of Iran, December 24, 2021. Picture taken December 24, 2021. (credit: SAEED SAJJADI/FARS NEWS/WANA (WEST ASIA NEWS AGENCY)VIA REUTERS)

Western parties to the deal have expressed frustration at the slow movement in the talks, while saying there has been some progress.

The sanctions exemption for South Korea could be a gesture by the US to Iran in order to move the negotiations forward.

French Foreign Minister Jean-Yves Le Drian said Iran and world powers are still far from any agreement.

“The discussions are ongoing. They are slow, too slow and that creates a gap that jeopardizes the chance of finding a solution that respects the interests of all sides,” Jean-Yves Le Drian told a parliamentary hearing.

“Bits of progress were made at the end of December, but we are still far from concluding this negotiation.”

Jerusalem is especially opposed to lifting sanctions out of a concern borne out from experience with the JCPOA that the funds will be funneled to Iranian proxies on Israel’s borders.

Negotiations in Vienna in recent days focused on Iran’s demands for verification of sanctions removal, as well as a guarantee from the US that the next president would honor the agreement, the Iranian Tasnim news agency reported.

However, US President Joe Biden cannot legally guarantee what his successor will do.

Since the US left the nuclear deal, Iran has repeatedly breached it, developing uranium metal and recently reaching 60% uranium enrichment, moves that have no credible civilian use.

World powers involved in the Iran deal seek to stop the Islamic Republic from enriching uranium to 90%, which is weapons-grade. American sources have said they would likely invoke the JCPOA “snapback” mechanism, reinstating all pre-2015 UN sanctions on Iran, if Iran’s nuclear program reaches that point. 

The European parties to the deal would be more likely to honor that than the Trump administration’s call for snapback sanctions in 2020, which the UN Security Council voted to ignore.

Reuters contributed to this report.