Iran frees South Korean ship after promise to release frozen funds

SEOUL – Iran released on Friday a South Korean ship and its captain detained since January after South Korea promised to try to secure the release of Iranian funds frozen in South Korean banks under US sanctions, a South Korean official said.

The move was also seen by experts as reflecting Tehran’s satisfaction with the US stance during the ongoing talks on Vienna about Iranian nuclear deal.

The Iranian foreign ministry said the chemical tanker, Hankuk Chemi, was released after an investigation into environmental pollution and at the request of the South Korean government and its owner, state news agency IRNA reported.

The seizure of the tanker in the Strait of Hormuz off Oman in January had triggered a diplomatic dispute after Iran demanded that South Korea release $7 billion in funds frozen in South Korean banks under US sanctions.

The IRNA report made no mention of the frozen funds, but other Iranian media quoted an unnamed Iranian official as saying Korean officials had given assurances that “they are trying to solve the problem and to strengthen ties.”

The South Korean ministry said in a statement the ship had left Iran after completing administrative procedures. It made no mention of the demand for the release of funds.

“The captain and sailors are in good health,” the ministry said.

A South Korean foreign ministry official told reporters that both sides had agreed the ship and the funds were not related issues but that South Korea promised to help get the money released.

“We have expressed our firm willingness to resolve the fund issue,” said the official, who declined to be identified.

Iranian authorities had accused the tanker of polluting the waters with chemicals, a charge denied by South Korea. The South Korean official said Iran dropped a plan to pursue criminal charges against the shipping company.

Iran agreed to free all of the ship’s 20 crew members except for the captain in February, after a South Korean vice-foreign minister visited Tehran.

Iran has denied allegations that the seizure of the tanker and its crew constituted hostage-taking, saying it was South Korea that was holding Iranian funds hostage.

The freezing of the funds is linked to US sanctions that Washington re-imposed on Tehran in 2018 after then-President Donald Trump withdrew from Iran’s 2015 nuclear deal with world powers.

The release of the ship is also seen as linked to the ongoing indirect talks between Iran and world powers in Vienna over a US return to the nuclear accord.

Envoys from China and Russia to the Iran nuclear talks said on Friday there had been progress in efforts to bring Iran and the United States back into compliance with the 2015 nuclear deal and that all sides would reconvene next week.

“The #JCPOA (Joint Comprehensive Plan of Action) participants took stock of the work done by experts over the last three days and noted with satisfaction the initial progress made,” Mikhail Ulyanov, Russia’s envoy to the UN atomic watchdog, wrote on Twitter.

“The Commission will reconvene next week in order to maintain the positive momentum.”

The United States has recently agreed to allow Iran to use some funds for non-military purposes, an undisclosed amount of which has reportedly been spent on coronavirus vaccines secured via the global COVAX initiative.