South Korea Expands Economic Sanctions Against Iran Over Nuclear Program

By Eunkyung Seo and Sungwoo Park - Dec 16, 2011 3:20 PM GMT+0700

South Korea said it will expand sanctions against Iran and cautioned companies against importing petrochemicals as the U.S. leads efforts to pressure the country to reverse its suspected atomic weapons program.

South Korea added 99 Iranian groups and six individuals to a list of people and organizations banned from foreign-exchange transactions without approval from the Bank of Korea, the finance ministry said in a statement today.

The U.S. approved additional curbs on Iran’s banking system and oil industry last month and the European Union added 180 Iranian officials and companies to a blacklist this month. The EU is still discussing a possible halt to purchases of crude oil from Iran, which denies it is seeking technology to build nuclear weapons.

“We will ask domestic companies to pay attention to international sanctions when purchasing petrochemical products from Iran,” Eun Sung Soo, a director-general at the finance ministry, told reporters. South Korean companies should be mindful of sanctions imposed by the U.S. government to avoid souring their business with the world’s biggest economy, he said.

Crude oil imports are not affected by today’s curbs on transactions with Iran. Like Japan, which refrained from restricting crude purchases to its list of additional Iranian sanctions announced last week, South Korea imports all its oil.

Petrochemical Imports

South Korea imported about $333 million of petrochemicals from Iran in 2010, accounting for around 2.5 percent of imports of the products, according to the Korea Petrochemical Industry Association and the Korea International Trade Association. The nation exported about $466 million of petrochemicals to Iran in the same year, or 1.3 percent of sales of these products overseas.

Iran is South Korea’s fourth-largest supplier of crude oil and accounted for 8.3 percent of the 870 million barrels imported in 2010, according to state-run Korea National Oil Corp. The nation depends entirely on imports for oil.

South Korea followed UN sanctions last year banning any new investments in Iranian oil, gas and construction projects. It also put 102 Iranian organizations including Tehran-based Bank Mellat and 24 individuals on a list banning financial transactions without central bank approval.

To contact the reporter on this story: Eunkyung Seo in Seoul at eseo3@bloomberg.net;

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net