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(Yonhap Editorial) Adverse impact of sanctions should be minimized
SEOUL, Sept. 8 (Yonhap) -- South Korea's decision to penalize a key Iranian bank and put nearly all financial transactions with Iran under government supervision will likely bring forth retaliatory measures from the Middle Eastern nation. The government would give a "heavy penalty" to the Seoul branch of Iran's Bank Mellat, which is accused of facilitating hundreds of millions of dollars in transactions for Iranian nuclear, missile and defense entities, to join a U.S.-led campaign to censure Tehran over its suspected nuclear program.
The foreign ministry did not elaborate on the "heavy penalty," but sources said the bank would likely face a two-month suspension. Ministry spokesman Kim Young-sun said the government would expand its sanctions blacklist to 102 Iranian entities and 24 individuals to ban foreign exchange dealings with them, strengthen inspections of suspicious cargo to and from Iran, put the blacklisted entities and individuals on the travel ban list, and restrict investments in Iran's gas and oil refinery industries. The blacklisted entities include Bank Mellat, the Islamic Revolutionary Guard Corps and the Islamic Republic of Iran Shipping Lines, the spokesman said.
It is inevitable for the government to join the international efforts to censure Iran's nuclear ambition as the foreign ministry spokesman's comment that South Korea "expects Iran to join the international efforts for nuclear non-proliferation and take steps to faithfully implement its obligations under the U.N. Security Council resolutions."
The announcement of sanctions, however, could anger Tehran, which has warned South Korea of negative consequences to business ties between the two countries if Seoul joined the U.S. sanctions campaign. Iran is South Korea's biggest trade partner in the Middle East and the fourth largest supplier of oil.
Possible negative consequences could include Iran's imposition of high tariffs on South Korean goods and difficulty in importing crude oil from Iran.
A high-level government official said South Korea is "in the process of explaining" the sanctions to Iran, and discussions will continue with the country about how to settle bills in Korean won.
To allow domestic companies to remit money for their normal transactions with Iran, the government plans to try to have a bank account open in South Korea in the name of Iran's central bank.
The government said it will work to minimize the adverse impact on domestic companies by ensuring the operation of normal and legitimate transactions with Iran and continuing with the government assistance for domestic small- and medium-sized export companies," he said.
It is the most urgent task for the government to lower the "level of retaliation" through talks with the Iranian authorities and to diversify the import source of crude oil.
(END)
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