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Seoul limits exports to Iran: trade body

SEOUL -- South Korea has imposed limits on its exports to Iran — mainly steel, cars and electronics — to reduce its risk of payment defaults as western sanctions disrupt Iranian oil exports, the Korea International Trade Association (KITA) said.

The KITA statement confirms an earlier Reuters report that Asia's fourth-largest economy, which sold US$1.7 billion of goods in Iran in the first quarter of this year, would seek to impose export limits.

“A self-imposed export control including setting settlement ceilings for exports to Iran starts from June 12 for those exporters who receive payments from the Iranian central bank's won-denominated accounts at local banks,” South Korea's representative trade body said on its website in a statement dated June 12.

KITA said the measure had been taken in advance of planned European Union sanctions on insuring Iranian oil tankers. It also came as South Korea won an exemption from U.S. sanctions thanks to its cuts in oil imports from Iran.

“Details such as what each firm's payment ceiling is, when and how the ceiling will be given will be finalized once there is confirmation on whether or not the European Union will extend their shipment insurance and reinsurance.”

KITA is the largest business organization in Korea with over 71,000 member companies.

Fresh export deals to Iran will be approved only if their payment period is within 180 days to reduce uncertainty in payment settlement, it said.

“This is temporary to prepare for the situation that Iranian crude imports do not go smoothly, and it will be lifted if the trading condition with Iran improves sharply,” KITA also said.

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