September 8, 2010 / 6:57 AM / 9 years ago

South Korea imposes new wave of Iran sanctions

SEOUL (Reuters) - South Korea blacklisted on Wednesday 102 companies, including the Seoul branch of Iran’s Bank Mellat, and 24 individuals accused of facilitating Iran’s efforts to develop nuclear weapons.

Signs of Iran's Bank Mellat are seen on a direction board in the lobby of the bank's Seoul branch office September 8, 2010. REUTERS/Jo Yong-Hak

Bank Mellat has been at the heart of U.S. demands for tougher South Korean sanctions, as it has been accused of facilitating hundreds of millions of dollars in transactions for Iranian nuclear, missile and defence entities.

“We based the measures on the need to join in international efforts related to Iran’s nuclear programme,” a government official told reporters.

“Any transactions by Bank Mellat as small as $1 will require government authorisation. It’s our belief that normal transactions by Bank Mellat will be difficult.”

South Korea would also ban investment and construction contracts in Iran related to petroleum resources, he said.

South Korea has agonised for weeks over to whether to back close ally the United States and impose toughened sanctions on Iran, or heed Iran’s warning that new sanctions could risk business deals and endanger oil supplies from a major source.

Iran is the fourth-largest source of crude oil for South Korea, accounting for about 10 percent of its supplies.

Any disruption of shipments would have a big impact on Asia’s fourth-largest economy, which relies on imports for all its energy resources.

The United States has demanded that South Korea adopt new sanctions on Iran in addition to U.S.-authorised measures to punish it for its uranium enrichment programme.

Billions of dollars are at stake in Iranian contracts for South Korean construction firms and shipbuilders.

The U.S. Treasury Department on Tuesday said it had designated an Iranian-owned bank in Germany as facilitating Iran’s efforts to develop nuclear weapons, a move that effectively prevents the firm from doing business with international financial institutions.

The International Atomic Energy Agency (IAEA) said in a report obtained by Reuters on Monday that the Islamic Republic was pushing ahead with its nuclear work in defiance of tougher international sanctions.

Washington, which has spearheaded a new wave of punitive measures imposed on the major oil producer since June, said the latest IAEA report was “troubling”.

The West hopes the new sanctions — including measures that target the oil sector — will persuade the Iranian leadership to back down and halt sensitive activity.

Iran has repeatedly rejected such demands and is sending mixed signals about its readiness to negotiate with the West.

(Writing by Jeremy Laurence; Editing by Jonathan Hopfner)

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