(2nd LD) Iran agrees to S. Korea's proposals on ways to use frozen assets: foreign ministry

(ATTN: UPDATES with report of Tehran spokesman's news conference in para 9)
By Kim Seung-yeon

SEOUL, Feb. 23 (Yonhap) -- Iran has agreed to South Korea's proposals on how to use its assets locked in Seoul, but any release of the money will take place after consultations with the United States, the foreign ministry said Tuesday.

The ministry's comment came after Tehran claimed that it had reached an agreement with Seoul on the transfer and use of about US$7 billion of its funds frozen in South Korean banks. The deal was reached Monday (Tehran time) during the meeting between Iran's Central Bank Gov. Abdolnaser Hemmati and South Korean Ambassador to Iran Ryu Jeong-hyun, it said.

It said that the two sides agreed on the destinations for the transfer and that the Iranian central bank informed Seoul of the amount of the money it wants to be transferred.

Tehran has been pressuring Seoul to unblock the money locked due to U.S. sanctions. Seoul has been in talks with Washington on ways to release the money without violating the sanctions, including expanding humanitarian trade with the Middle Eastern country.

"During the meeting between the ambassador and the Iranian governor, the two sides inched closer on their opinions as the Iran side expressed consent to the proposals we have made," ministry spokesperson Choi Young-sam said in a press briefing, without providing further details of the proposals.

"The actual unfreezing of the assets will be carried out through consultations with related countries, including the United States," the ministry said in a separate message to reporters.

Earlier this month, a foreign ministry official said Seoul was finalizing talks with Washington about using some of the frozen funds to pay Tehran's U.N. dues in arrears, to which the Islamic republic has also agreed.

To facilitate the trade with Iran of humanitarian items, such as medicine and medical equipment, South Korea has been seeking to use a Swiss channel backed by the U.S., known as the Swiss Humanitarian Trade Arrangement (SHTA), to use the money through Swiss companies' sales of goods to Iran.

According to Bloomberg, Iranian government spokesman Ali Rabiei said in a news conference that South Korea will release $1 billion of the frozen money in an "initial step" toward settling the issue, without giving further details on how it will be used.

Despite the denial from Seoul and Tehran, speculation has mounted that Iran's discontent over the frozen funds is related to its recent seizure of a South Korean oil tanker and its crew members in the Persian Gulf early last month.

Early this month, Tehran said it would release the sailors, except for the captain, which coincided with Seoul's confirmation on the progress in the talks with Washington about using the frozen money for the U.N. dues.

elly@yna.co.kr
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