South Korea has set restrictions on exports to Iran out of concern that an embargo on Iranian oil may lead Iran to default on its payments.
Reuters reports that the restrictions, mainly concerning steel, cars and electronics, came into effect this week, putting severe limits on Iran’s dealings with the fourth-largest economy in Asia. The report indicates that in the first three months of the current year, South Korean exports to Iran added up to $1.7 billion.
The Korean International Trade Association (KITA) said on its website that new export deals will be approved only if their payment period is within 180 days, adding: “This is a temporary measure to prepare for a situation in which Iranian crude imports do not happen smoothly, and [the restrictions] will be lifted if trade conditions with Iran improve sharply.”
The West is concerned that Iran may be trying to build nuclear weapons and, therefore, it has stepped up sanctions against Iran to convince it to give up on its nuclear activities.
Iran, on the other hand, rejects the allegations and says all of its nuclear activities are peaceful and allowed under the Non-Proliferation Treaty.
South Korea, which is a major consumer of Iranian oil exports, managed to reduce its oil dealings with Iran enough to get an exemption from U.S. sanctions, which go into effect later this month and target major buyers of Iranian crude.