South Korea denies deal to release Iranian funds frozen by U.S. sanctions

South Korean officials are denying claims by Iran that they have released billions of dollars in frozen Iranian oil sale revenues as the two sides negotiate the fate of a Korean oil tanker seized by Tehran last month.

Iranian press accounts, citing Central Bank of Iran Gov. Abdolnasser Hemmati, claimed talks in Tehran had resulted in a deal Monday to release some $7 billion in bank deposits, which has been held in South Korea for nearly two years because of sanctions re-imposed by the Trump administration after it renounced the 2015 Iran nuclear deal.

But South Korea’s Foreign Ministry said in a statement Tuesday that talk of an agreement was premature and that Seoul was still waiting for word from the new Biden administration on how to handle the funds.

“While the two countries agreed on the ways and detailed [mechanism] on how to transfer the assets, the actual release requires consultation with the U.S. and its approval,” the South Korean government statement said.

Iran is still detaining the South Korean-flagged MT Hankuk Chemi oil tanker and its captain, claiming the tanker was seized over violations of international pollution laws.

But many analysts see the seizure as part of a campaign by Iran to free up money and assets frozen overseas because of the American sanctions and to pressure the Biden administration as it tries to bring Washington back into the 2015 deal.

South Korean press reports say Seoul and Tehran have reached a tentative understanding to release the Iranian funds and apply them to Iran’s past-due United Nations membership fees. But South Korean officials insisted Tuesday no final agreement had been reached.