South Korea has begun to allow for intermediary trade of "humanitarian" products with Iran, easing restrictions it has enforced in line with the U.S. sanctions on Tehran's nuclear programs, the finance minister said Tuesday.
The eased restrictions went into effect on Sept. 16 for intermediary trade of food, medication and other goods deemed necessary for humanitarian purposes, Finance Minister Hyun Oh-seok told reporters. He was in Washington to attend the annual meetings of the International Monetary Fund and the World Bank.
"Through continued negotiations with the U.S, we allowed for intermediary trade of food, medical products and other humanitarian items with Iran starting on Sept. 16," he said.
In October 2010, South Korea agreed on Korean won-based transaction settlement arrangements for bilateral trade, mainly out of necessity for oil imports.
The government says that the move does not go against U.S.-led sanctions to punish Iran for its nuclear ambitions, which is banned from dealing with dollar-based financial transactions under the sanctions.
The settlement accounts have been used for direct trade between South Korea and Iran, but intermediary trade -- exporting foreign-produced goods after bringing them to customs-free bonded areas -- has not been allowed for fear that it could be used as a cover for illegal imports and exports.
The move came amid growing concerns that the U.S. sanctions are hurting small and medium-sized Korean companies doing business with Iran.
During a meeting with U.S. Treasury Secretary Jacob Lew in Moscow in July, Finance Minister Hyun expressed concerns over such growing damage that the U.S. sanctions on Iran are having on small Korean companies.