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Seoul to request exception from U.S.’ Iran sanctions

Seoul will request that the U.S. make an exception for Korea in the application of the National Defense Authorization Act for Fiscal Year 2012 that calls for stronger measures against Iran, sources said Monday.

“There is a need for the government to visit the U.S. at an appropriate time to hold discussions regarding the National Defense Authorization Act,” an unnamed government official was quoted as saying by a local news agency.

In addition, the Ministry of Foreign Affairs and Trade is reported to be planning to discuss the issue with U.S. Assistant Secretary of State for East Asian and Pacific Affairs Kurt Campbell when he comes to Korea on Wednesday.

The National Defense Authorization Act for this year, signed by U.S. President Barack Obama on Dec. 31, includes the so-called Kirk-Menendez amendment designed to cut off international transactions with Iran’s central bank.

Under the law, economic entities that have transactions with the Iranian central bank are unable to have dealings with U.S.-based financial institutions.

In light of the scope of the U.S. financial market, the measure is considered an effective ban on buying crude oil from Iran.

Since September 2010, South Korea’s crude oil trade with Iran has been conducted through Iranian central bank accounts set up with Industrial Bank of Korea and Woori Bank.

With Iranian oil accounting for a considerable portion of Korea’s oil imports, such developments are likely to have significant implications for the country’s economy.

About 10 percent of Korea’s crude oil imports are from Iran, the world’s fifth largest oil producer, and Iranian crude oil accounts for as much as 20 percent of the volume supplied to some local refiners.

By Choi He-suk (cheesuk@heraldcorp.com)
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