Another Chance for Korea
On January 16, the International Atomic Energy Agency (IAEA) confirmed that Iran fulfilled its obligation to curb its nuclear programs in accordance with the Joint Comprehensive Plan of Action (JCPOA) of last year. Under the circumstances, the international community is expected to lift economic sanctions on the country, meaning Korean companies can find a lot of new business opportunities there.
In this regard, the Korean government announced on January 17 that the export and import bans applied to Iran were repealed with regard to almost all items, excluding strategic ones related to weapons of mass destruction. At the same time, its guidelines on trade with and investment in Iran were rescinded immediately, too. This means the trade of petrochemical products, automobiles, ships, jewelry and the like is allowed from now on.
“The limit on the amount of crude oil import from Iran is released as well, and thus Korean oil companies can make decisions on their own in view of the domestic demand,” the government explained, adding, “This year, the total exports from Korea to Iran are estimated to reach US$6.267 billion, close to the all-time high recorded in 2012.”
At present, Korea’s top export item in its trade with Iran is transport machinery. Last year, Korea exported transport machinery worth US$618 million to Iran. This item was followed by consumer electronics (US$584 million) and petrochemical products (US$479 million).
Capital transactions with Iran, including remittance for investment purposes, have been allowed as well, but the Korean currency has to be used for the time being because the use of the U.S. dollar for the purpose is in violation of the law of the United States as of now. The Korean government is planning to discuss this issue with the U.S. and Iranian governments so that the other international currencies can be used to the same end.