South Korea today said it would restrict the Seoul operations of an Iranian bank accused of facilitating Tehran's efforts to develop nuclear weapons.
“The government will restrict foreign exchange transactions of 102 institutions ... including Bank Mellat, and 24 individuals ...without the approval of the Bank of Korea," a government statement said.
Bank Mellat has been at the heart of US demands for tougher South Korean sanctions, as it has been accused of facilitating hundreds of millions of dollars in transactions for Iranian nuclear, missile and defence entities.
"We based the measures on the need to join in international efforts related to Iran's nuclear programme," a government official told reporters. "Any transactions by Bank Mellat as small as $1 will require government authorisation. It's our belief that normal transactions by Bank Mellat will be difficult."
South Korea would also ban investment and construction contracts in Iran related to petroleum resources, he said.
Iran is the fourth-largest source of crude oil for South Korea, accounting for about 10 per cent of its supplies.
Any disruption of shipments would have a big impact on Asia's fourth-largest economy, which relies on imports for all its energy resources.
The United States has demanded that South Korea adopt new sanctions on Iran in addition to US-authorised measures to punish it for its uranium enrichment programme.
Reuters